Global Society, Vol. 21, No.

1, January, 2007

Risk Assessment and State Failure

DAVID CARMENT, JOHN J. GAZO and STEWART PREST

This article examines emerging linkages between current policies and state failure, and
assesses the potential for including risk analysis and early warning in emerging wholeof-government approaches to the problem of state failure. The article argues that
current aid policies have focused primarily on good performers and that the relevant
tools therefore tend to be tilted towards the key features of these kinds of states, primarily in the macroeconomic domain and the governance sector. Only recently, with the shift
towards state failure and the presumed linkage with regional and global security, have
policies focused on a much broader array of factorsincluding organised crime and
drug trafficking. These new elements, many of which are transnational in scope, are
specified in the 2004 High Level Report on UN Reform and are now becoming visible
in the various frameworks being developed by aid, diplomatic and defence departments.
The article argues that these analytical frameworks should adopt a methodology of operational net assessment which evaluates both the intended and unintended consequences
of aid impact in the fragile- or failed-state domain, as well as the various nodes of activity
towards which aid is directed.

Why State Failure and Why Now?1

With the passing of the Cold War as the primary threat to international order,
failed and fragile states have emerged as perhaps the greatest concern in the
21st century. Although estimates vary, there are believed to be anywhere from
25 to 50 states that have currently effectively failed or are at a high risk of
failing in the near future. Michael Ignatieff identifies weak and collapsing states
as the chief source of human rights abuses in the post-Cold War world.2
Notable policy makers have claimed a direct relationship between poverty, terrorism and state failure. For example, James Wolfensohn, formerly of the World Bank,
calls for a global strategy that includes measures designed to address the root
causes of terrorism: those of economic exclusion, poverty and under-development.3 Others have noted the mutually reinforcing nature of governance,
poverty and state failureweak governments deprive the poor of the basic
1. The authors would like to thank the Canadian International Development Agency (CIDA) of the
Government of Canada for its support in this research. Information regarding the work of CIFP can be
found at: <www.carleton.ca/cifp>.
2. Michael Ignatieff, Intervention and State Failure, Dissent, Vol. 49, No. 1 (2002), p. 115.
3. James Wolfensohn, Making the World a Better and Safer Place: The Time for Action is Now,
Politics, Vol. 22, No. 2 (2002), p. 118.
ISSN 1360-0826 print=ISSN 1469-798X online/07=01004723 # 2007 University of Kent
DOI: 10.1080=13600820601116526

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D. Carment et al.

means of survival, even as the desperately poor are forced to engage in illicit
activities such as drug production in order to survive.4
The events of 11 September 2001 fundamentally altered Western states
approach to failed states. Disengagement disappeared as an option as Western
states in general, and the United States in particular, came to equate their own
national security with stability and order in the worlds poorest, and poorest
governed, regions. The goal of good governance would no longer be purely
developmental, but also related to security, not just locally within the state,
but regionally and globally as well.5 This article will argue that any failedand fragile-state policy must incorporate two fundamental elements. The first
is sound risk assessment and early warning. Given the enormous difficulties
associated with programming in failed-state environments, policy must be
grounded in a continuing process of risk assessment and monitoring capable
of identifying countries at risk of impending crisis and providing guidance as
to the type of intervention required either to stave off or mitigate that crisis.
That assessment must draw on the widest range of possible sources of instability.
To focus on a single factor such as governance is to invite incomplete analysis of
the problem, and ineffective intervention as a result. Timely intervention also
requires some type of early warning to allow for policy deliberation and
resource mobilisation. Second, a whole-of-government response will be
necessary to overcome the particular difficulties faced by failed and fragile
states. Development alone cannot succeed in stabilising a failed or fragile
state, any more than a military intervention can rebuild destroyed political infrastructures. Defence and development must work towards a common end, and
that common end must be coordinated with other diplomatic international
efforts in a given fragile state. Outside involvement must therefore be coordinated at the strategic level.

State Failure Terminology

Although the concept of state failure as policy is relatively new, it has quickly
established itself as an indispensable part of the international lexicon. Variously
characterised as difficult partners,6 difficult environments,7 fragile states,8 Low
4. Jessica West, Concept Paper: Fragile States and Poverty, Unpublished research paper for CIDA
(February 2005).
5. See, for example, the policy of the US government: The National Security Strategy of the United
States of America (Washington, DC: White House, 2002), available: <http://www.whitehouse.gov/
nsc/nss.html>. Some recent research suggests that aid decisions have become even more politicised
since 11 September 2001. See, for instance, Mark McGillivray, Aid Allocation and Fragile States, Background Paper for the Senior Level Forum on Development Effectiveness in Fragile States, 13 14
January 2005, available: <www.oecd.org/dataoecd/32/43/34256890.pdf>.
6. OECD, Poor Performers: Basic Approaches for Supporting Development in Difficult PartnershipsNote
by the Secretariat, OECD DAC (November 2001), available: <www.oecd.org/dataoecd/26/56/
21684456.pdf>.
7. Magui Moreno Torres and Michael Anderson, Fragile States: Defining Difficult Environments for
Poverty Reduction, PRDE Working Paper No. 1 (August 2004), available: <www.oecd.org/dataoecd/
26/56/21684456.pdf>.
8. Jack Goldstone et al., State Failure Task Force Report: Phase III Findings (McLean, VA: Science
Applications International Corporation (SAIC), 2000), available: <http://www.cidcm.umd.edu/
inscr/stfail/>.

Risk Assessment and State Failure

49

Income Countries Under Stress (LICUS),9 poor performers,10 weak performers,11

failing or failed states,12 and countries at risk of instability,13 the phrase encompasses a number of partially overlapping, yet analytically distinct, concepts
regarding vulnerability. In this article, the following definitions will be used to
clarify analysis. Fragile states lack the functional authority to provide basic security within their borders, the institutional capacity to provide basic social needs
for their populations, or the political legitimacy effectively to represent their citizens at home and abroad. Weak states are susceptible to fragility or failure
because of limited governance capacity, economic stagnation, or an inability to
ensure the security of their borders and sovereign domestic territory.
Failing states exhibit key elements of fragility, and are experiencing organised
political violence. Peace processes are weak or non-existent. Failed states are
characterised by conflict, humanitarian crises, and economic collapse. Government authority, legitimacy, and capacity no longer extend throughout the
state, but instead are limited either to specific regions or groups. Collapsed
states possess no meaningful central governments. These countries exist purely
as geographical expressions, lacking any characteristics of state authority, legitimacy or capacity. Finally, recovering states exhibit key elements of fragility, but are
states in which substantial and at least partially successful nation-building
efforts are present.
Operationalisation issues are always problematic when dealing with a class
of events that are relatively rare, politically sensitive, ill-defined, and poorly
understood. State failure, the overarching concept, is defined by the Political
Instability Failure Task Force (formerly State Failure Task Force) as the collapse of authority of the central government to impose order in situations
of civil war, revolutionary war, genocide, politicide and adverse or disruptive
regime transition.14
While the Task Force definition is predominant, it is not the only one. Rotberg
characterises failed states as unable to provide basic political goodsespecially
security, dispute resolution and norm regulation, and political participationto
many, if not most, of their citizens.15 Capturing the diversity of failed-state
environments, Jean-Germain Gros specifies a detailed taxonomy of five different
failed state typeschaotic, phantom, anaemic, captured, and aborted. The
various types derive their dysfunction from different sources, both internal and
9. World Bank, World Bank Group Work in Low-income Countries under Stress: A Task Force Report,
World Bank LICUS Task Force (Washington, DC: World Bank, September 2002), available:
<www1.worldbank.org/operations/licus/documents/licus.pdf>.
10. AUSAid, Australian Aid: Investing in Growth, Stability and Prosperity, AUSAid (September 2002),
available: <http://www.ausaid.gov.au/publications/pubout.cfm?Id6624_6294_3682_4822_1275>.
11. Asian Development Bank, ADBs Approach to Weakly-performing Developing Member Countries,
Discussion Paper for the Asian Development Fund (ADF) IX Donors Meeting (March 2004), available:
<www.adb.org/Documents/Reports/ADF/IX/weakly_performing.pdf>.
12. Robert Rotberg (ed.), When States Fail: Causes and Consequences (Princeton, NJ: Princeton University Press, 2004).
13. Prime Ministers Strategy Unit, Investing in Prevention: An International Strategy to Manage Risks
of Instability and Improve Crisis Response, Prime Ministers Strategy Unit Report to the Government of the
UK (February 2005), available: <www.strategy.gov.uk/work_areas/ countries_at_risk/index.asp>.
14. The State Failure Task Force is perhaps the worlds most famous survey of the problem, and
information about it is available at: <www.cidcm.umd.edu/inscr/stfail/sfcodebk.htm>.
15. Robert Rotberg, The Failure and Collapse of Nation-states: Breakdown, Prevention, and
Repair, in Rotberg (ed.), op. cit., pp. 510.

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D. Carment et al.

external, and receive different policy prescriptions as a result.16 In this paper we

refer to failed states and fragile states (as defined above) as related but distinct
types.
Focusing on development issues, the Organisation for Economic Cooperation
and Development (OECD) defines fragile states as countries where there is a
lack of political commitment and insufficient capacity to develop and implement
pro-poor policies.17 The British Department for International Development
(DfID) defines state weakness in broadly similar terms, focusing on states in
which the government cannot, or will not, deliver core functions to the majority
of its people, including the poor.18 The German governments Action Plan on
Civilian Conflict Prevention, Conflict Resolution, and Post-conflict Peace-building describes failed and failing states as being characterized by a gradual collapse of state structures and a lack of good governance.19
There is an inevitable tension between the inclusiveness found in the German
definition and the specificity of the Instability Task Force definition. While the
latter may possess greater analytical power, the former may be of greater political
utility. One element that appears in all of the definitions is that failed states are
qualitatively different from other types of developing states, with unique problems that require novel policy responses. Moreover, as Gros points out, each
failed state environment is itself unique, facing challenges unseen in other
failed states. Ultimately, business as usual has not worked, and will not work;
current development, security, and diplomatic tools have proved insufficient to
the task of stabilising and rehabilitating these failed states.

Different Problems, Different Solutions

In developing policies towards state failure and fragility, there are at least three
critical elements that guide the deliberations of decision makers. The first is a
proper understanding of the problem, then the process of selecting the proper
objectives, and finally assessing the likelihood of achieving the chosen objectives
if pursued with the means available applied in appropriate and realistic ways.
Two basic policies have come to dominate responses, each driven by a different
motivation and policy recommendations.
USAID and the US National Security Strategy typify the first. It begins with the
assumption that failed and fragile states are a threat to individual countries
national security and to international order.20 The US presidents National Security Strategy (NSS), promulgated one year after 11 September 2001, identified the
16. Jean-Germain Gros, Towards a Taxonomy of Failed States in the New World Order: Decaying
Somalia, Liberia, Rwanda and Haiti, Third World Quarterly, Vol. 17, No. 3 (1996), pp. 461 548.
17. Karim Morcos, Chairs Summary, Senior Level Forum on Development Effectiveness in
Fragile States, London, 1314 January 2005 (January 2005), available: <http://www.oecd.org/
dataoecd/60/37/34401185.pdf>.
18. DfID, Why We Need to Work More Effectively in Fragile States, DfID (January 2005), available:
<www.dfid.gov.uk/pubs/files/fragilestates-paper.pdf>.
19. German Federal Government, Action Plan: Civilian Crisis Prevention, Conflict Resolution and
Post-conflict Peace-building (2004), available: <http://www.auswaertiges-amt.de/www/en/infoservice/download/pdf/friedenspolitik/AP%20EN.pdf>.
20. USAID, Fragile States Strategy, USAID (January 2005), available: <www.usaid.gov/policy/
2005_fragile_states_strategy.pdf>.

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51

main threat to the United States as failing states and discounted deterrence and
containment as being ineffective in a world of amorphous and ill-defined terrorist
networks. The threats in the world are so dangerous that the United States should
not hesitate to act alone, if necessary, to exercise [its] right of self-defense by
acting pre-emptively.21 The strategy also states that the United States aims to
create a new world order that favours democracy and defeats terror at the same
time. The NSS document is praiseworthy in recognising the importance of addressing state failure as an immense structural and global problem that is unlikely to
go away in the short run. The list of failing states is extensive and growing, and all
regions of the world are affected by the multiple consequences of these failures.
State failures serve as the potential breeding ground for extremist groups and
most contemporary wars are fought either within states or between states and
non-state actors.
In the immediate aftermath of 11 September 2001, media reports indicated that
the primary countries harbouring terrorists included Afghanistan, Sudan, and
Algeria. However, dismantling the al-Qaeda network now involves intelligence
and law enforcement efforts in over 30 countries where the terrorist network is
believed to have cells. To be sure, the Bush governments efforts to address
threats abroad do take other forms beyond military intervention. Continuities in
US foreign policy exist, including training for armies and police forces trying to
deal with terrorism, such as in the Philippines, Pakistan and Yemen; enhanced
American participation in multilateral aid programmes, where aid is increasingly
tied to good governance by recipient countries; and the pursuit of integration,
which has the United States directing many of its policies towards helping
countries to join the international flow of trade and finance.22
The second approach, grounded in the development literature, is most concerned with the significant challenge represented by state failure with respect to
alleviating poverty and achieving the Millennium Development Goals
(MDGs).23 Examples of this second approach include the OECD Learning Advisory Process on Difficult Partnerships (LAP), and the Fragile State Strategy
released by DfID in the United Kingdom.24
Thus, the two approaches are driven by divergent imperatives and arrive at
different policy prescriptions as a result. Failed- and fragile-state policies most
concerned with national and international security will tend to encourage strategies that provide immediate stability, such as strengthening domestic military
and police forces, limiting opportunities for international terrorist activities, and
suppressing transnational crime. Policies most concerned with achieving the
MDGs will focus on programmes that enhance opportunities for education and
employment and that reduce disease and malnutrition. At best, these two
dominant perspectives result in policy approaches that are only partially
21. US government, National Security Strategy, op. cit., p. 6.
22. Some writers also identify a third formulation, driven primarily by current inadequacies in the
provision of aid in fragile-state environments. See, for instance, Torres and Anderson, op. cit. However,
the latter two streams have become closely linked in both theory and policy.
23. United Nations General Assembly, United Nations Millennium Declaration, Resolution
A/55/L.2, 18 September 2000, available: <http://www.un.org/millenniumgoals/>.
24. OECD DAC, Principles for Good International Engagement in Fragile States, DAC Learning and
Advisory Process on Difficult Partnerships (LAP) High Level Meeting, 3 March 2005, available:
<www.oecd.org/dataoecd/59/55/34700989.pdf>; DfID, Why We Need to Work More Effectively in
Fragile States, DfID (January 2005), available: <www.dfid.gov.uk/pubs/files/fragilestates-paper.pdf>.

52

D. Carment et al.

complementary. They define failed states differently, generate different lists of

unstable states and prescribe different policy approaches. Crucially, they require
close coordination to ensure that the pursuit of one does not undermine the
efforts of the other.25
Efforts to synthesise or reconcile the two approaches have thus far made limited
progress. For instance, although the recent document Principles for Good International Engagement in Fragile States, produced as part of the OECDs LAP,
acknowledges that a secure environment is a necessary prerequisite of effective
aid, the document gives very little indication of how this might be achieved.26
Although the LAP has made considerable progress towards harmonising and
aligning donor agency actions in failed-state environments, there is no similar
process in place to enhance coordination between development agencies and
security forces operating in the same theatre. All such efforts are left to individual
governments, with inconsistent results. Conversely, USAIDs policy clearly places
poverty reduction within the context of the overall US NSS, with the former
ultimately subordinate to the latter.27
There are, of course, a number of other important concerns emanating from
failed-state environments. While not always included in the fragile-states literature, the recent report A More Secure World: Our Shared Responsibility, drafted by
the UNs High Level Panel on Threats, Challenges, and Change offers perhaps
the most complete justification currently extant for international engagement in
failed and failing states. In its account of the most pressing threats to national
and international security, the panel goes beyond traditional concerns of interstate conflict, and includes economic and social threats, including poverty, infectious disease and environmental degradation; internal conflict, including civil
war, genocide and other large-scale atrocities; nuclear, radiological, chemical
and biological weapons proliferation; terrorism; and transnational organized
crime.28 All of these threats are particularly likely to emerge in failed-state
environments and any truly comprehensive failed-state strategy must take them
all into account. Although many states policies mention these other important

25. To cite just one example, efforts to suppress terrorism and crime in Afghanistan included campaigns to eradicate poppies, thereby removing a source of income for transnational criminals and terrorists alike. Unfortunately, the poppies also provided much of the income for Afghanis in the poorest
parts of the country. The UNs Afghanistan Opium Survey 2004 estimates that the opium economy is
worth 60% of the countrys total licit GDP, making opium production the dominant engine of growth.
Clearly, this is a complicated issue in which efforts to combat drug production will inevitably have
drastic consequences for economic development over a significant area of the country. See UN Office
on Drugs and Crime (UNODC), Afghanistan Opium Survey 2004, UNODC (November 2004), available:
<http://www.unodc.org:80/pdf/afg/afghanistan_opium_survey_2004.pdf>.
26. OECD DAC, Principles for Good International Engagement in Fragile States, DAC Learning and
Advisory Process on Difficult Partnerships (LAP) High Level Meeting, 3 March 2005, available:
<www.oecd.org/dataoecd/59/55/34700989.pdf>.
27. USAID, Fragile States Strategy. Tellingly, the first footnote in the USAID Fragile State Strategy
refers to the US National Security Strategy. The document also draws on another USAID report, entitled
Aid in the National Interest: Promoting Freedom, Security, and Opportunity, which stresses the need for aid
to align with American national strategic priorities. See Aid in the National Interest: Promoting Freedom,
Security, and Opportunity, USAID Task Force Report (2002), available: <www.usaid.gov/fani/
Full_Report Foreign_Aid_in_the_National_Interest.pdf>.
28. High Level Panel on Threats, Challenges, and Change, A More Secure World: Our Shared Responsibility, UN (2004), 2, 14 16, available:<www.un.org/secureworld>.

Risk Assessment and State Failure

53

considerations in failing- and failed-state environments, few specify how such

factors could be incorporated into fragile-state analysis and policy.
To be sure, failed and fragile states are risky, but in a myriad of ways. They are a
risk to their people because they lack capacity, resulting in a lack of basic security.
They lack governance, resulting in the inefficient and inequitable distribution of
public goods. They lack control over violence within their territory, resulting in
further division and weakness and the diffusion of conflict from other jurisdictions. Failed and fragile states are vectors for transnational threats and global problems because they lack capacity to prevent the transmission of diseases such as
avian flu. They are unable to control the transmission of AIDS. They host basecamps for transnational criminal networks. Their weak border control provides
opportunities for human and drug trafficking as well as other forms of smuggling.
Their internal conflicts create refugee flows that upset the demographic balance of
neighbouring states.
Failed and fragile states are also regional and international risks because they
are more likely to engage in risky behaviour in violation of international laws,
rules and principles. They may provide support for the diffusion of weapons of
mass destruction. They engage in hostile interactions with their neighbours.
Their weakness attracts foreign intervention. Their diaspora groups may
become conduits of conflict diffusion and contagion. Terrorism and failure are
related, but indirectly. There are a few states that are thought directly to
harbour and support terrorist activity. There are many more failed or fragile
states that provide assistance for terrorist groups in other states through training,
material support and humanitarian assistance. Failed and fragile states experiencing extreme violence can become a source of recruitment from divided and
hardened groups.
There are also issues surrounding the focus on government legitimacy and
democratisation in fragile-state policies.29 There is an overabundance of academic literature advocating or discounting the link between peace and democracy or trade, or a combination of the two. The effect is not as simplistic as
most academics, many of them American, formulate.30 Several recent studies
have suggested that democracys relationship to peace is, in fact, non-linear.
Poor countries that make the transition to democracy are actually more
likely to engage in conflict, either civil or inter-state, in the years immediately
following the transition.31 Early research on state failure clearly indicates that
elections and regime change, whether legitimate or not, are often trigger
29. USAID, Fragile State Strategy, op. cit.
30. The literature on the democratic peace is extensive, beginning with Doyles seminal articles in
1983. More recently, writers have explored the linkages between economic factors and inter-state peace;
see, for instance, M. Mousseau, H. Hegre and J.R. Oneal, How the Wealth of Nations Conditions the
Liberal Peace, European Journal of International Relations, Vol. 9, No. 2 (June 2003), pp. 277314. The
State Failure Task Force exhaustively documents data exploring the linkages between, among other
things, regime type, economic performance, and state failure. See Michael Doyle, Kant, Liberal
Legacies, and Foreign Affairs, Philosophy and Public Affairs, Vol. 12, No. 3 (1983), pp. 205 235; and
Goldstone et al., op. cit.
31. For articles regarding democratisation and civil violence, see Helen Fein, More Murder in the
Middle: Life-integrity Violations and Democracy in the World, 1987, Human Rights Quarterly, Vol. 17,
No. 1 (February 1995), pp. 170 191; Scott Gartner and Patrick Regan, Threat and Repression: The Nonlinear Relationship between Government and Opposition Violence, Journal of Peace Research, Vol. 33,
No. 3 (1996), pp. 273287.

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D. Carment et al.

events for instability.32 Although democracy and trade may create peaceful
states over the long term, fragile states often have short-term vulnerabilities
that make transition to effective democratic governance extremely problematic,
and even destabilising. Thus, any failed-state strategy advocating democratisation, good governance and economic modernisation must take into account
the possibility that such efforts may themselves trigger conflict and possibly
even state failure in the short term, ultimately denying the promise of longterm democratic stability.
In addition, by itself poverty is not a good indicator of failure. Poverty is usually
a symptom of a host of causal factors related to a states authority, capacity and
legitimacy. It is true that many failed and fragile states are poor but they also
suffer from unequal distribution and weak governance among many other problems. There is a strong link between a countrys gross domestic product (GDP)
per capita and the negative effect this has on neighbouring states. It is important
to understand how a state is performing in a regional comparative context and not
just in absolute terms.
Unfortunately, donor policy has lagged behind such basic findings. For
example, donor assistance may have a stabilising effect on failed and failing
states, as Wolfensohn and others suggest, but the answer depends on whether
the country has the absorptive capacity to direct aid towards poverty reduction
and good governance.33 Conditional aid that does not take into account the
absorptive capacity of a state rarely induces desired changes. Although aid can
have an indirect effect on patterns of governance and poverty reduction in recipient governments, without strong domestic leadership the effect is relatively weak
and even somewhat ambiguous. The high level of fungibility associated with most
development financing ensures that uncooperative recipient governments will be
able to arrogate targeted support, regardless of the conditions placed on it.34 The
answer to this problem, according to Collier and Dollar, is to make selectivity a
core part of effective aid policy.35 Current examples of aid policies incorporating
selectivity, in which the donor countries factor the strength of potential recipients
policy frameworks into their decision-making processes, include Canadas
Strengthening Aid Effectiveness (SAE) effort and the US Millennium Challenge
32. For more on the role of accelerators and triggers in the onset of crises and state failure, see
Barbara Harff, Early Warning of Humanitarian Crises: Sequential Models and the Role of Accelerators, in John L. Davies and Ted Robert Gurr (eds.), Preventive Measures: Building Risk Assessment and
Crisis Early Warning Systems (Oxford: Rowman & Littlefield, 1998), pp. 7094.
33. Although the idea had been around for some time, the concept of aid effectiveness being dependent on a sound policy framework became truly entrenched in the literature through David Dollar and
Lant Pritchett, Assessing Aid: What Works, What Doesnt, and Why, World Bank Policy Research Report
(New York: Oxford University Press for the World Bank, 1998). Other significant contributions
include J. Isham and D. Kaufmann, The Forgotten Rationale for Policy Reform: The Impact on Projects, Quarterly Journal of Economics, Vol. 114, No. 1 (1999), pp. 149184; Craig Burnside and David
Dollar, Aid, Policies, and Growth, American Economic Review, Vol. 90, No. 4 (2000), pp. 847 868;
Paul Collier and Anke Hoeffler, Aid, Policy and Growth in Post-conflict Societies, European Economic
Review, Vol. 48, No. 5 (2004), pp. 11251145.
34. Dollar and Pritchett, op. cit.
35. Paul Collier and David Dollar, Aid Allocation and Poverty Reduction, European Economic
Review, Vol. 46, No. 8 (2002), pp. 14751500. David Dollar and Victoria Levin provide evidence that
countries have been practising increasing selectivity over the last 20 years. See The Increasing Selectivity
of Foreign Aid, 19842002, World Bank Policy Research Working Paper No. 3299 (Washington, DC:
World Bank, 2004).

Risk Assessment and State Failure

55

Fund.36 Such considerations are broadly reflected in the Monterrey consensus as

well.37 However, selectivity is a large part of the reason why failed and fragile
states received small and extremely volatile amounts of aid.
The latter half of the 1990s was witness to a wide, and in some cases growing,
inequality in aid allocation. Levin and Dollar confirm that aid flows to OECD difficult partnership countries (DPC) have been and continue to be both smaller and
more volatile than other countries in broadly similar circumstances.38 McGillivray
shows that fragile states are under-aided even when taking their limited absorptive capacity into account.39 Using the poverty-efficient allocation benchmark
developed by Collier and Dollar, the authors found that fragile states receive at
least 40% less aid than their levels of poverty, population and policy effectiveness,
as measured by the World Bank Country Policy and Institutional Assessment
(CPIA), would justify.40
Even when taking donor responses to rapidly changing situations into account,
aid flows to failing or fragile states are nearly twice as volatile as to other developing countries. Levin and Dollar also highlight the growing presence of aid darlings and orphans among fragile and failed states, whereby the darlings
generally states emerging from conflict or otherwise considered strategically
importantreceive far more aid than one would otherwise expect. The
orphanstypically very large or very small countries, or those considered strategically insignificantreceive comparably smaller amounts of aid.41
Other research begins to quantify some of the costs associated with total disengagement from failed states. For instance, Chauvet and Collier provide a calculation of costs associated with failed states. Their analysis incorporates direct
costs such as investment in post-conflict reconstruction, as well as indirect costs
like regional destabilisation and the ills associated with endemic poverty,
disease and famine. The results indicate that the total costs of state failure are prohibitive at national, regional, and global levels.42 When combined with concerns
of national security emanating from failed states since 11 September 2001, such
studies provide compelling evidence that the price of disengagement is simply
too high to be contemplated as a serious policy alternative.43 Moreover, the
36. Current policy examples include CIDA, Policy Statement on Strengthening Aid Effectiveness, CIDA
(September 2002), available: <http://www.acdi-cida.gc.ca/aideffectiveness>; and USAID, Millennium
Challenge Account, USAID (January 2004), available: <http://www.mca.gov>.
37. See UN, Report of the International Conference on Financing for Development, UN (March 2002),
available: <www.un.org/esa/ffd/aconf198-11.pdf>.
38. Victoria Levin and David Dollar, The Forgotten States: Aid Volumes and Volatility in Difficult Partnership Countries, Summary Paper Prepared for the DAC Learning and Advisory Process (LAP)
(January 2005), available: <www.oecd.org/dataoecd/32/44/34687926.pdf>.
39. Mark McGillivray, Aid Allocation and Fragile States, Background Paper for the Senior Level
Forum on Development Effectiveness in Fragile States, 1314 January 2005, Lancaster House,
London (January 2005), available: <www.oecd.org/dataoecd/32/43/34256890.pdf>.
40. Ibid.; Levin and Dollar, op. cit.
41. Levin and Dollar, op. cit., pp. 1422.
42. Lisa Chauvet and Paul Collier, Development Effectiveness in Fragile States: Spillovers and Turnarounds (Oxford: Centre for the Study of African Economies, Department of Economics, University
of Oxford, January 2004), available: <www.oecd.org/dataoecd/32/59/34255628.pdf>.
43. For a clear argument on the dangers of disengagement from an American national security perspective, see Jeremy M. Weinstein, John Edward Porter and Stuart E. Eizenstat, On the Brink: Weak States
and US National Security, Report of the Commission on Weak States and US National Security, Center for
Global Development (CGD) (June 2004), available: <www.cgdev.org/docs/Full_Report.pdf>.

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D. Carment et al.

suggestion that state failure can be reversed or ameliorated through conventional

donor assistance programmes is flawed. At best such efforts may prove ineffective
and at worst counterproductive.
For governments and multilateral institutions, policy coordination has emerged
as one of the key obstacles to creating an effective international response to fragile
states. Much recent work in the donor community has focused on overcoming
such problems in the context of aid allocation. The Principles of Engagement,
for instance, were developed and agreed to by the OECD/DAC, UNDP, World
Bank, European Commission and several bilateral aid agencies working collaboratively.44 This inter-agency collaboration represents a concerted effort by a
large part of the development community to coordinate problem-solving efforts
and to combine research programmes rather than focusing on independent
agendas. This is clearly a positive development with respect to problems such
as development harmonisation and alignment, as consensus, and therefore
coordination, is achieved during the research and analysis phases, rather than
negotiated afterwards.
Unfortunately, such coordination represents only one facet of a much larger
problem, one that cannot be addressed completely, or even primarily, within the
confines of the international donor community. Picciotto et al. identify four different levels of coordination in fragile-state policy.45 The first, intra-departmental
coordination, calls for coordination of all development programmes targeting a
given country within each donor department. The second, known as whole-ofgovernment coherence, denotes coordination between aid and non-aid agencies
within individual donor governments. The third, harmonisation, refers to coordination between both aid and non-aid agencies across donor governments and
the fourth, alignment coordination, describes activities to coordinate the efforts
of various external actors with the needs and priorities of the recipient governments own strategic priorities. Each of these levels has both national and international dimensions.
Taken together, they represent an almost unprecedented international challenge
in international policy coordination. Several states are engaging in various types
of coordination efforts, with varying degrees of commitment and success.
Examples include Germanys action plan on Civilian Crisis Prevention, Conflict
Resolution and Post-conflict Peace-building, which provides a policy based on the
countrys extended security concept.46 With its focus on civilian efforts,
however, the German policy stops short of a true whole-of-government
approach, limiting itself instead to ensuring that the interface between military
and civilian crisis prevention be taken into account.47 The British government
has created two Conflict Prevention Pools (CPPs), one for sub-Saharan Africa
(ACPP) and one for outside Africa (Global CPP or GCPP), to improve department
44. High Level Forum, Paris Declaration on Aid Effectiveness: Ownership, Harmonisation, Alignment,
Results and Mutual Accountability, High Level Forum, Paris, 28 February2 March 2005, available:
<www1.worldbank.org/harmonization/Paris/FINALPARISDECLARATION.pdf>.
45. Robert Picciotto, Charles Alao, Eka Ikpe, Martin Kimani and Roger Slade, Striking a New Balance:
Donor Policy Coherence and Development Cooperation in Difficult Environments, Background Paper for the
Senior Level Forum on Development Effectiveness in Fragile States, 1314 January 2005, Lancaster
House, London (January 2005), available: <www.oecd.org/dataoecd/31/62/34252747.pdf>.
46. German Federal Government, op. cit.
47. Ibid., p. 2.

Risk Assessment and State Failure

57

coordination and priority setting. The CPPs are jointly funded and administered
by three departments of statethe Ministry of Defence (MOD), DfID and the
Foreign and Commonwealth Office (FCO).48
USAIDs recent Fragile States Policy suggests that the method and level of interagency coordination for a given fragile state is likely to depend on the countrys
strategic importance to American security interests.49 Areas of key concern to
US national security are coordinated through the Defense and State Departments,
while high priorities not involving military assets are to be coordinated through
the newly created Office of the Coordinator for Reconstruction and Stabilization
at the Department of State. Efforts in less strategic areas may be coordinated
through an inter-agency administrative council.
In all of these models, inter-agency cooperation depends on agreement between
the various arms of government on a number of different areas. First, they must
have a mechanism for shared assessment and early warning to determine
which countries to intervene in, and when. Having intervened, they must share
a general conceptualisation of the problem, including the primary sources of
instability in the country, a strategy on how best to intervene, specifying both
short-term priorities for action and long-term goals for the national effort, a
common pool of resources, ensuring that funding flows to the true priority
areas in the country and an integrated administration and decision-making structure, to ensure that the efforts of each government department do not impede, or
even actively undermine, the efforts of the others. Clearly, no country has yet
demonstrated the ability to sustain such a high level of coordination over an
extended period of time.50

Whole-of-government Approaches
There are a number of rationales behind the emerging focus on failed states; while
the Americans view state failure through a national security lens,51 the British
have adopted a development-oriented perspective.52 The Germans, largely
in line with the British approach, emphasise the environmental elements of
48. The main new organisational additions are an inter-departmental steering mechanism and a
process for joint priority-setting for each conflict. Once established, the CPPs brought together
budgets for programme spending and peacekeeping costs. Although still in development, this coordinated effort is an example of a commitment to cooperation between departments to ensure an effort that
includes all aspects of reconstruction, from security to economics, participation and social development.
49. USAID, Fragile States Strategy, op. cit., pp. 13.
50. Over the last decade various research programmes have documented both the decline of organised political violence and the reasons for it. As early as seven years ago, reports from the Centre for
International Development and Conflict Management, the Stockholm International Peace Research
Institute, and the Peace Research Institute of Oslo, showed that large-scale violence was in decline.
However, the majority of sub-Saharan African states still have only limited capacity and authority
effectively to address threats to individuals. In addition to organised violence, these efforts are consistently undermined by a host of domestic political and governance factors, weak international linkages,
demographic instability, poor economic growth, environmental degradation and low human development. Failing the identification of a fundamental set of causal factors that generate human insecurity,
donor countries and international organisations will remain divided on how to address fragile and
failing states such as those in sub-Saharan Africa.
51. Ibid.
52. DfID, Why We Need to Work More Effectively in Fragile States, op. cit.

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D. Carment et al.

instability.53 Despite these differences, there are a number of common themes that
thread themselves through the various approaches to state failure. First, as already
mentioned, there is a shared understanding of the need to improve coordination
among donor government aid programmes. A more important step is to improve
coordination between all the relevant arms of government.54 This is variously
referred to as the whole-of-government or 3DDefence, Development, and
Diplomacyapproach.55
Second, there is agreement on the necessity of improving the analysis that
underpins efforts to respond to fragile states.56 There is so much that is
implied in government polices regarding the causes and manifestations of
state failure that these points need to be clarified in two ways. On the one
hand, the theories we choose to explain the causes of state failure have implications for policy development. If one emphasises root causes (e.g. relative
deprivation or intra-elite competition), then we should be able to comment
satisfactorily on the implications that findings have for policy implementation.
Alternatively, if one emphasises dynamic interactions within a given state,
then the contending theoretical explanations stressing environmental constraints and opportunities must be considered and subsequent policy
choices will focus on stakeholder interests, events-based analysis and exogenous factors that serve as catalysts to crises.
On the other hand, even though the choice of policy responses to state failure
depends on the explanations we accept for their onset, decay and collapse, to be
policy relevant those responses must be matched to the needs of decision
makers who are in a position to act. This means that analysis must mesh with
the existing capabilities of state institutions. What is required is what former
State Department official Bruce Jentleson has called the Realism of Preventive
Statecraft.57 Warning must come several years in advance to permit a strategic
response to structural problems (development, institution building, establishment
of infrastructure) but a year (or less) when escalation is imminent and when the
tasks are to engage in fact finding, stabilisation, preventive diplomacy, dialogue
and mediation. For military forces, long-term projections are required in order
to develop appropriate weapons capabilities, communications technologies and
organisational structures.
The obvious advantage in providing a sound analysis of structural indicators
and adequate forewarning is that the range of response options, both structural
and operational, may be much broader as a result. Advance warning permits
53. German Federal Government, op. cit.
54. Picciotto et al., op. cit.
55. OECD DAC, Principles for Good International Engagement in Fragile States, op. cit., p. 3.
According to the OECD DAC, the whole-of-government approach is intended to promote policy
coherence within the administration of each international actor. 3DDefence, Development, Diplomacyis the term applied to the approach of pursuing coherence among the international efforts of
the Canadian government.
56. DfID, Why We Need to Work More Effectively in Fragile States, op. cit., p. 14. USAID, Fragile States
Strategy, op. cit., pp. 35. At the 8th Annual Peacebuilding and Human Security Consultations, Ambassador Carlos Pascual, the coordinator of the US State Departments newly created Office of Reconstruction and Stabilization, issued a call for improved analysis to support his organisations efforts to
respond to failing states.
57. See Bruce Jentleson, The Realism of Preventive Statecraft, in David Carment and Albrecht
Schnabel, Conflict Prevention: Path to Peace or Grand Illusion? (Tokyo: UNU Press, 2003).

Risk Assessment and State Failure

59

an optimal combination of interest and capacity.58 Unfortunately, knowing when,

where and how to respond is not easily determined and only few efforts have been
made to provide the kind of forecasting necessary for long-term response.59 There
is the related analytical challenge of identifying the independent effects of specific
causal mechanisms that give rise to state failure. As noted above, there are often
contending and conflicting interpretations of the causes of state failure and
fragilityinequality, insecurity, private incentives and perceptions being key
elements. International neglect, in both its political and economic forms, is also
touted as a contributing factor to state failure.
With respect to policy implications, one of the key criticisms directed towards
the preventive forecasting literature in general is how poorly it translates into
meaningful policy-related results. In this regard the central deficiency is the
under-specification of how risk assessment results can be rendered meaningful
to policy analysts as a complementary tool in their strategic arsenal. While part
of this dilemma relates to the need for enhanced organisational resources
(human, diplomatic and budgetary), it also involves the fact that risk assessment
and early warning are not properly utilised within existing government structures. The reasons for this include the traditional governmental separation
between analysis and intelligence as well as between policy and operations.
Added to this is the difficulty of planning multi-sectoral responses to complex
causes of conflict and the dilemma that dealing with immediate operations
tends to crowd out strategic consideration of future issues and potential problems.
Moreover, the lack of a structured model for systematic, rather than ad hoc, early
warning and risk analysis, deficiencies in the manner in which warnings are transmitted to decision makers, and the consequent difficulty in deriving assessments
of the operational implications of these warnings all have their role to play in
bringing about a lack of proper utilisation.60
To confront these analytical challenges, states need to determine how their existing institutional analytical mechanisms and the associated tool-box of responses
can be developed to produce effective, long-lasting and mutually reinforcing
changes. To meet this objective, methodologies of risk assessment need to be practicable, standardised and accessible. Some of this work is provided by think tanks,
academic organisations and the private sector working closely in consultation
with local NGOs in zones of conflict, while other work is being designed
in-house by conflict prevention secretariats.
Responding to states in the midst of collapse (as opposed to those that have
already failed) can be significantly more complex and will, out of experience,
58. Long-term conflict prevention is associated with structural transformations and developmental
aid and faces a time lag of approximately 20 30 years before results are easily visible. Positive change
can be achieved through partnerships and linkages that emphasise clear, comprehensive strategic plans
for high-risk regions and priority areas of concern within them.
59. For applications of the Country Indicators for Foreign Policy (CIFP) template see: <www.carleton.ca/cifp>: Conflict Risk Assessment Report: Cambodia, Indonesia, Philippines (1 January 2002); Conflict
Risk Assessment Report: West Africa: Mano River Union and Senegambia (1 April 2002); Conflict Risk Assessment
Report Sub-Sahara Africa (4 November 2002); Conflict Risk Assessment Report African Great Lakes (6 September
2003); Conflict Risk Assessment Report: Bulgaria, Romania, Slovakia, and Ukraine (8 November 2002).
60. Ruddy Doom and Koen Vlassenroot, Early Warning and Conflict Prevention: Minervas
Wisdom?, Journal of Humanitarian Assistance (July 1997), available: <www-jha.sps.cam.ac.uk>; Alexander
L. George and Jane E. Holl, The WarningResponse Problem and Missed Opportunities in Preventive Diplomacy
(Washington, DC: Carnegie Commission on Preventing Deadly Conflict, 1997), pp. 1012.

D. Carment et al.

60

require a more multi-faceted and potentially more risky approach. In strategic

terms, forestalling a failing state requires long-term structural techniques. The
goal is to encourage behavioural change, which can be induced by the promotion
of sustainable development, support for human rights, arms control mechanisms,
membership in international organisations, security pacts, and local participation
in political decisions. In order to respond to failing states and take an active role,
there must be a detailed risk analysis. All relevant departments must complete
risk analyses, preferably in conjunction and consultation with one another.
It is also necessary to consider whether the country is amenable to outside involvement. An assessment of the opportunity structures for effective intervention
will be required. In this sense donor states must use a risk calculation that first
looks to the potential for conflict and its gravity or consequences, as noted
above. A second risk calculation then determines the costs of pursuing outside
involvement, including whether or not a third party would be at all effective
given the array of opportunity structures within the country.
This risk calculation must be derived from the feasibility of preventing the outbreak of violent conflict and potential collapse. Country selection would be based
on those failing states that are amenable to third-party influence. However, one
must question whether there is space in policy formation for such a process.61
The relative significance of process opportunities cannot be underestimated. Conceivably, one process area may be of greater salience or importance relative to the
potential outbreak of violent conflict than another area within a given country and
across countries. Similarly, some pressure points may be more salient than others
and may be more malleable to outside influence. The following process opportunities and pressure points are important:
.
.
.
.
.
.
.

the
the
the
the
the
the
the

extent to which the state is repressive or totalitarian;

percentage of moderate politicians operating in the country;
number of receptive ministries;
extent to which civil society exists in the country;
degree of development work and donor involvement that has gone on;
extent of strong spoiler or veto groups; and
degree of regional stability.

It is also important to reflect on how complementary analyses (e.g. structural

data, events data, country surveys and local reports) can be integrated into a
dynamic exchange of information. Such an approach might provide a more comprehensive and more accurate picture than would any single methodology. Ultimately, these common elements flow from the nature of failed states. The wideranging and varied challenges dictate the necessity of employing an equally
multi-faceted analytical framework when identifying, monitoring, assessing,
and responding to instances of fragility and instability.
61. There is also the danger that emphasis will be placed on immediate military solutions, while the
longer term prevention of emergent threats is a lesser priority. As a consequence, making the domestic
military a preferred partner of cooperation may upset civilmilitary relations in various countries
(e.g. Pakistan, Philippines, Colombia). The implications for countries with weak, fragile or emerging
democracies are serious. Hard-won civilian control over the military may be compromised, and
progress towards democracy and regional integration could be lost.

Risk Assessment and State Failure

61

Any quantitative or qualitative risk analysis tool that expects to be policy relevant must do three things. First, it must specify which elements of its models
are the most effective in order to assist policy makers to design more effective policies. Second, it must aid policy by helping decision makers to think through or
analyse problems in a manner that is better than that which they would have
used otherwise. Third, it should identify systematic deviations from optimal
decision making and the identification of certain correcting principles.
In each of these areas there has been some progress. Political science and econometric ideas regarding state failure permeate Washington and, to a lesser extent,
Ottawa and the decision-making centres of other Western countries. Government
institutions have staff who understand theories from political science and economics and the findings derived from them. Some use these theories implicitly to
evaluate proposals and model outcomes, but they are rarely, if ever, employed
explicitly and consistently by those devising policy options. In many instances
such behaviour is understandable given that theories and models without clear
policy implications or actionable forecasts are just not useful to policy makers
on a day-to-day basis.

The Country Indicators for Foreign Policy (CIFP) Approach

This section outlines a methodological framework for conducting operational
net assessment of state failure. The net element denotes the intention of
assessing the intended and unintended consequences of policy impacts in a
failing or failed state as well as the various nodes of activity towards
which such efforts are directed. This type of assessment is essential when
seeking to evaluate the various factors that contribute to the potential and
incidence of state failure and the interplay between policy prescription and
instability. To be effective, a net assessment approach must be comprehensive
and draw on quantitative and qualitative sources as well as data- and judgement-based analytical frameworks. It involves casting as wide a net as practicable in order to capture, to the greatest degree possible, the complex
nature of state weakness, failure and collapse.62
Before outlining the net assessment methodology, it is useful to examine how
others in the field are tackling the issue. Three studies are prominent. In the
United States, USAID has taken the lead in preparing the countrys strategy on
fragile states, including analysis and monitoring.63 However, the focus is on the
intended result of the monitoring and assessment to be undertaken, with
primary attention being given to a states political legitimacy and effectiveness
in extracting and distributing resources.64 On a positive note, the document
expresses USAIDs intention to continue to improve its analytical framework.65
62. The methodological framework presented below was developed by the Country Indicators for
Foreign Policy (CIFP) project at Carleton University, Ottawa, in part to respond to the specific needs of
the Canadian International Development Agency (CIDA), and those of the Government of Canada as a
whole, to meet the challenges posed by failed and fragile states in an analysis-led and policy-coherent
manner. However, like any robust methodology, the framework is flexible and can be generalised and
adopted by other donor governments interested in implementing a more analytical and integrated
approach to fragility.
63. USAID, Fragile States Strategy, op. cit., pp. 35.

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D. Carment et al.

In the United Kingdom, both DfID and the Prime Ministers Strategy Unit (SU)
have released policy and strategy documents in response to the growing concern
over state failure. While the DfID statement is largely policy oriented and focuses
on the development- and aid-related aspects of state failure, it does contain a call
for closer cooperation between the branches of the UK government.66 The DfID
document also identifies a need for improved early warning and better analysis,
but says nothing on the mechanics for assessing instability. From a methodological
perspective, a more comprehensive framework for responding to fragile states has
been developed by the Prime Ministers SU.67 The SU documents outline a
detailed process for formulating better prevention and response strategies for
countries at risk of instability. The assessment model specifies a process for
incorporating endogenous and exogenous (de)stabilising factors, country
capacity, and potential shocks into the analysis of stability.68 The response strategy
also contains a component for the identification and assessment of British interests
in intervention and the potential impact of (in)action.69
Another comprehensive framework has been prepared by the Conflict Research
Unit of the Netherlands Institute of Foreign Affairs (Clingendael) for the Dutch
Ministry of Foreign Affairs.70 At the core of the Clingendael methodology is the
Stability Assessment Framework (SAF).71 The SAF integrates a number of
elements into the analysis such as macro-level structural indicators, institutional
capacity, political actors and policy interventions. In addition, the assessment
process incorporates a workshop component to bring together policy makers,
staff members, and local partners.72 The workshop is intended to provide an
opportunity for dialogue, information sharing and consensus building. It serves
to consolidate the stability assessment and constitutes a forum in which to
explore options for international policy intervention.
The strength of these assessment methodologies is their reliance on multiple
sources of data and a variety of analytical approaches. This type of approach
was developed by the London-based Forum on Early Warning and Early
Response (FEWER), working in partnership with research organisations and
NGOs in the conflict prevention field. FEWER promoted a highly integrated
and comprehensive framework, combining risk assessment and early warning.
Not surprisingly, the FEWER framework continues on in slightly different
guises at Clingendael and DfID, both of which contributed to FEWERs analytical
64. There are a number of references to the intention to draw on multiple and external sources of
information, but no specifics on the manner in which the various sources of information and analysis
are to be integrated into a coherent, comprehensive assessment. The USAID website is equally unrevealing.
65. USAID, Fragile State Strategy, op. cit., p. 4.
66. DfID, Why We Need to Work More Effectively in Fragile States, op. cit., p. 16.
67. Prime Ministers Strategy Unit, Investing in Prevention: A Prime Ministers Strategy Unit Report to
the Government. An International Strategy to Manage Risks of Instability and Improve Crisis Response, available: <http://www.strategy.gov.uk/work_areas/countries_at_risk/index.asp>.
68. Ibid., pp. 1639.
69. Ibid., pp. 4246.
70. Clingendael Institute for the Netherlands Ministry of Foreign Affairs, The Stability Assessment
Framework: Designing Integrated Responses for Security, Governance and Development (January 2005), available: <http://www.clingendael.nl/publications/2005/20050200_cru_paper_stability.pdf>.
71. Ibid., p. 5.
72. Ibid., p. 54.

Risk Assessment and State Failure

63

and financial capacity building. Additional inputs came from some of its core
members, such as structural indicators from CIFP, events-based data from FAST
based at the Swiss Peace Foundation, and country expertise from local NGOs
such as the West African Network for Peacebuilding (WANEP) and EAWARN
in the Caucasus. The rationale behind the FEWER methodology was the basic
understanding that no single analytical approach, be it data- or judgement
based, was capable of adequately capturing the complexity of risk potential or
of providing a sufficient foundation upon which to develop early warnings to
emerging crises. Although FEWER has been disbanded, the integrated approach
employed by the network has since become the basis for a number of methodological frameworks, including those above.
The second strength of the above analytical frameworks is the inclusion of an
assessment of the impact of state failure on the donors interests and the likely
consequences of their intervention in failed or failing states.73 Building response
strategies on a foundation of relevancy raises the likelihood of, first, international
actors engaging, and, second, once engaged, that the implemented responses will
be maintained for a sufficient period of time and with a sufficient intensity to have
a positive impact on the incidence of state failure or instability.

CIFP Net Assessment (CNA) Framework

The CNA framework is an integrated approach to identifying and analysing the
potential for and incidence of state failure. The objective is to provide a
research-based, policy-relevant mechanism that serves to promote the timely
and effective sharing of knowledge and expertise, which will contribute to the
planning and implementation of appropriate responses to state fragility and
failure. At its foundation is the instability assessment, an approach that incorporates structural and dynamic elements to create nuanced and country-specific
instability assessments. These are then supplemented with relevancy and
impact assessments. The resulting net assessment can serve to inform the strategic-, sectoral- and programme-level planning and response options of an international actor. Such tools can assist decision makers in knowing when, where and
how to respond, and help in the strategic allocation of resources. In this regard,
there is a need to reduce errors that arise when a misdiagnosis occurs and
resources are not allocated appropriately.74
73. The impact assessment element is an outgrowth of the work on absorptive capacity, the ability
of developing countries to absorb and utilise development assistance effectively. However, the focus is
shifting to how donors can craft response strategies that are more appropriately attuned to the specific
needs and capabilities of developing partners.
74. These errors are derived from unintended consequences and incomplete information. Substantial research has been conducted on unintended consequences and moral hazard problems. Moral
hazards can arise from a number of different causes; the first source of moral hazard is the traditional
one of incomplete information. There are also moral hazards not only in intervening militarily but also
in providing humanitarian assistance to vulnerable populations. Researchers have noted that outside
assistance can do more harm than good or can become entangled in the local political economy that
fuels the conflict. See Howard Adelman, Difficulties in Early Warning: Networking and Conflict
Management, in Klaas van Walraven (ed.), Early Warning and Conflict Prevention (London: Brill,
1998), pp. 5657.

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Instability Assessment
The instability assessment is composed of findings based on structural country
performance indicators and events-based monitoring. The tools for conducting
the two elements of the instability assessment were developed by the Country
Indicators for Foreign Policy (CIFP) from the projects existing conflict-oriented
methodologies.
The first step in instability assessment is preparing a country risk profile. In
order to outline the current methodology, it is useful to describe the pre-existing
conflict risk assessment methodology,75 as the process for evaluating the risk of
state failure is similar though not identical. The previous methodology focused
on structural factors as a means of identifying a countrys potential for
violent conflict. Structural factors or root causes are those elements that are
seen to shape the pre-conditions for crisis situations. The objective of the risk
assessment is to assess the prevalence and intensity of these underlying conditions. Doing so requires the identification and collection of structural indicators
considered to be associated with conflict potential. Over 100 performance indicators are identified, collected, ranked and indexed across nine issue areas76
and for each country globally.
Risk potential is a relative term that has meaning only with respect to a countrys performance and risk vis-a`-vis other countries in the international system.
Accordingly, each lead indicator is converted to a 9-point score on the basis of
its performance relative to a global sample of countries. This global sample of
countries is ranked from highest to lowest level of performance, divided into
nine equal categories, then assigned score numbers ranging from 1 to 9 based
on their rank position within the sample. This scoring procedure is intended to
facilitate the identification of key areas of concern, and as a way of directing
attention to potential problem areas.
In general, a higher score (in the 7 9 range) indicates that the country is performing poorly relative to other countries (i.e. high levels of armed conflict, autocratic governments, poor economic performance, low levels of human
development) or that a countrys standing is a cause for concern (i.e. significant
youth bulge, high levels of ethnic diversity). A lower score (in the 1 3 range) indicates that the country is performing well relative to other countries (i.e. no or little
armed conflict, democratic governments, strong economic performance, high
levels of human development) or that a countrys standing is less of a cause for
concern (i.e. no youth bulge, low levels of ethnic diversity). Values in the
middle 4 6 range indicate moderate levels of performance approaching the
global mean.
Since relative country performance can vary significantly from year to year (as
in the case of economic shocks), averages are taken for global rank scores over a
five-year time frame. The most recent five years contained in the CIFP data set
75. Country Indicators for Foreign Policy, Risk Assessment Template (August 2001), available:
<http://www.carleton.ca/cifp/docs/studra1101.pdf>.
76. The issue areas include History of Armed Conflict, Governance and Political Instability, Militarisation, Population Heterogeneity, Demographic Stress, Economic Performance, Human Development,
Environmental Stress and International Linkages. For a complete list and description of the basic set of
indicators utilised in the CIFP conflict risk assessment methodology, see CIFP, CIFP Risk Assessment
Indicator Definitions (2001), available: <http://www.carleton.ca/cifp/docs/RiskAssessmentIndicators_FullDescriptions.pdf>.

Risk Assessment and State Failure

65

are used for this index. The 1 9 global rank score forms the base scale upon
which individual indicator risk scores are calculated.
In addition to a relative measure of a countrys performance within the
international system, an assessment of risk also requires consideration of the
absolute development of a states performance as demonstrated by changes
over time. The direction of change, whether worsening or improving, indicates
whether a countrys performance for a given indicator is even more likely to
contribute to conflict potential (i.e. increasing restrictions on civil and political
rights, worsening economic conditions, increasing demographic or environmental stresses) or detract from it (i.e. greater respect for civil and political
rights, improving economic conditions, decreasing demographic or environmental stresses).
When adapting the risk assessment methodology to a focus on instability
and state failure, as opposed to conflict potential alone, the principal modifications revolve around the selection and inclusion of structural indicators.
Where the pre-existing indicators were selected on the basis of their power
for indicating the potential risk of violent conflict, instability requires a
much broader range of indicators. Instability entails more than just the potential for conflict. While violence is often associated with state collapse, the two
should not be conflated. The predominant foci of research on state failure are
issues of governance, security, and socio-economic development.77 Consequently, the revised methodology incorporates additional indicators better to
reflect the importance of these issues in the assessment of the risk of instability. The addition of a specific indicator depends on the degree to which it is
shown to signify instability and the availability of measures for every country,
thus enabling global ranking.
The second revision to the existing risk assessment methodology pertains to
the weighting scheme employed to reflect the interrelationship between the
indicator clusters. Under the pre-existing methodology, CIFP employed a
static weighting scheme when assessing risk. In order to elaborate further
the relative impact of each of the issue areas upon the conflict development
process within a country, the clusters were assigned weights derived deductively, based on inferences about the causal relationships between issue
areas.78 The weight assigned to each cluster is based on the number of
direct causal linkages it is postulated to have with the others, thereby reflecting the magnitude of each issue areas impact upon overall risk.79 A similar
weighting scheme is incorporated in the instability assessment, but only as
a first cut. The second cut relies on a dynamic weighting scheme, the
purpose of which is to reflect the unique manner in which instability manifests itself in different countries. Before reviewing the results of an initial
risk assessment profile, country and local experts are asked to provide their
input on how the clusters should be weighted by identifying the issue
77. While international actors approach these issues through a number of different lenses, these
three sectors are the principal focus of efforts to determine instability and the potential for state
collapse.
78. See Patrick James and Michael Brecher, Crisis and Change in World Politics (Boulder, CO: Westview Press, 1986).
79. Country Indicators for Foreign Policy, Risk Assessment Template, available: <http://www.carleton.ca/cifp/>.

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D. Carment et al.

areas they consider the most salient to (in)stability in a particular country. The
result is a weighting scheme that is specific to a country.
The second element of the instability assessment is events-based monitoring,
which is based partially on the watch list methodology developed by CIFP.80 As
with CIFPs original risk assessment framework, the prior watch list methodology
was designed to identify countries at risk of violent conflict, specifically in the next
one- to three-year time period. CIFP utilised a meta-filter, by which the findings
of a number of existing researchers and organisations were combined to derive a
list of conflict-prone states.81 The approach was based on the assumption that any
disparities between the findings of the various organisations, arising from their
differing research criteria and limiting factors, would be averaged out and
result in a list of those countries at risk based on a wide variety of sources.
CIFP researchers then turned to additional sources, such as structural indicators
and further current events information, to narrow down the findings to a shortlist
of priority countries.
The revised watch list methodology relies on the same procedure, but focuses
on identifying states at risk of instability and collapse.82 While the instability framework endeavours to generate a watch list in a timely fashion, the methodology
envisions a three-month preparation phase. This affords researchers greater
opportunity to improve their understanding and analysis of watch list countries.
The longer time frame increases the likelihood that crucial information and
elements are not overlooked or omitted. The revised watch list methodology
also attempts to address a limitation in the country selection criteria. The basis
on which a country is kept on the watch list or designated as a priority country
will in part be informed by the relevancy and impact assessment (see below).
While it is possible, and perhaps in some circumstances desirable, to create a
watch list on the basis of an objective evaluation of instability, the goal of the
instability framework is to provide analytical support to policy makers and
support their ability to develop viable response strategies. Consequently, the
selection criteria must reflect the specific interests and capabilities of the international actor.
A key component of the instability assessment phase as a whole is the determination of where on the state failure spectrum a particular country falls. Is it on a
downward trajectory and thus on the path to state failure? Has the country
already failed, and, if so, is it languishing in collapse or on a recovering trajectory?
Alternatively, the state could be unstable but relatively static in that the country
displays indications that are symptomatic of potential failureweak governance,
ineffective institutions, poor economic performance and high levels of crime and
corruptionbut also shows neither improvement nor a tendency to slide towards
violence or state collapse. The country is, in effect, stagnating. Identifying where a
state is on the state failure spectrum informs the decisions of policy makers on
response options. A country on a rapidly declining path towards failure will be
likely to require a more robust response, such as a military or diplomatic operation. A response more heavily weighted towards development and diplomatic
80. Country Indicators for Foreign Policy, CIFP Country Risk Assessment: Medium Term Watch List
(November 2004), available: <http://www.carleton.ca/cifp/docs/watchlistreport1.pdf>.
81. Ibid., p. 4.
82. For CIFP Watchlist methodology limitations see ibid., p. 6.

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efforts is likely to be more appropriate, and thus successful, in stagnating or recovering states.
The methodology is also intended to identify not only failing states but also to
highlight the sectors of a state that are particularly weak and any factors, either
exogenous or endogenous to the state, that contribute to the potential for instability and collapse. These high-risk areas constitute potential entry points for action.
Response options can be evaluated and formulated on the basis of their impact on
elements that constitute a significant destabilising influence. In this way, those
elements that denote the greatest risk to a countrys stability, and thus contribute
greatly to the potential for state failure, can receive priority attention. Addressing
these high-risk areas is the most expedient and efficient method for reducing a
countrys risk of instability.

Relevance Assessment
Assessing the relevance of instability entails evaluating the external impact of
instability and state failure. This relevance can be measured on the basis of
either a narrow or broad set of criteria. At its most narrow, the degree of
relevance may be determined by the impact that instability can have on the
resources and population of an international actor. The effects of stability
could be experienced directly by the international actor, in the form of
refugee flows, or could affect the resources an international actor has invested
in a failing state. More broadly, relevance can arise as a result of the threat
that instability represents to the objectives and interests of the international
actor. For example, state failure can imperil efforts of an international actor
to pursue development objectives, such as poverty reduction, or the promotion of regional security.
Relevance is a critical component for mobilising political will for intervention. A
high degree of relevance contributes to the rationale for intervening and serves to
promote maintaining that intervention for a sufficient period to achieve a stabilising effect. Where a high degree of relevance exists, an international actor ostensibly has a vested interest in ensuring that the failing state is stabilised and the
threat to its resources, people or objectives is reduced or eliminated. The goal is
to avoid a number of piecemeal interventions by an international actor that
feels it should be doing something to respond to state failure but does so in the
absence of an abiding reason for doing so or for remaining for a sufficient time
to have a positive impact.
To assess the degree of relevance of a failing state requires the engagement
of representatives from the government of the intervening actor and also
input from the wider academic community. The assessment requires the
participation of representatives from a wide rage of government departments
in order to reflect the breadth of an actors interest in a failing state. The
purpose of the academic community input is to provide insight into salient
links between an international actor and an unstable state that are not part
of the inter-governmental level83 and a more objective assessment of
relevance.
83. This can include an examination of the existence and influence of diasporas and the presence
and work of NGOs in failed and failing states.

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D. Carment et al.

Impact Assessment
The impact assessment component is intended to reduce the likelihood of unintended negative consequences of intervening in failing states. Impact assessment
is a means for systematically examining potential interventions for possible negative impacts on efforts to respond to instability. Given the breadth of potentially
destabilising elements that a country can experience, and the multitude of possible tools that international actors can draw upon in an effort to respond to
state failure, it is germane to examine the likely means of intervention in order
to assess their potential to engender positive results. Before intervening, international actors must evaluate their efforts in one or a number of sectors on the
basis of whether or not they serve to stabilise a failing state without contributing
to instability on other fronts, either within that state or in the regional context. The
intention of the impact assessment is not to dissuade an actor from intervening,
but to match entry points for action with response options.
The impact assessment also serves to contribute to improved coherence. An
examination of the potential actions of the various arms of a government facilitates improved coordination of response strategies and supports efforts to evaluate the impact of interventions from across the spectrum of government. In
addition, the impact assessment should also examine the efforts of other governments. This serves to reduce the likelihood of interventions from different governments working at cross-purposes to one another, to avoid duplication of effort and
to maximise the stabilising effects of interventions from multiple international
actors.
Similarly to the relevance assessment, the impact assessment is carried out by
engaging representatives of the intervening actor, including their in-country
agents, and relies on input from the academic community and local experts. In
addition to evaluating the likely impact of response strategies, potential partners
or agents of change must also be identified.
The culmination of the CNA process is the Country Brief, which integrates the
structural, events-based and expert-derived inputs. The Brief identifies instability-generating factors, where on the failure spectrum the state is located, evaluates the country on the basis of its perceived relevancy and assesses the impact of
potential response strategies. As the Brief is intended to contribute to the policy
and response formulation process, best, worst and most likely scenarios are
included along with recommendations for action. With input and feedback
from government representatives, the recommendations are based on a clear
understanding of relevant interests and available capabilities.

Conclusion
Ultimately, the CNA framework is an attempt to answer the call for better analysis
and greater coordination. Responding to state failure requires the institutionalisation of mechanisms for accurate identification, precise assessment and consistent
monitoring. There is no shortage of states facing developmental challenges. The
crucial point is to identify those states that display signs of instability and, as a
result, face an elevated risk of failure and collapse. However, identifying failing
states is not enough. As there is no shortage of developing countries, there is
also no shortage of definitions of state failure or potential tools for intervening.

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69

The key is combining approaches to capitalise on the rich array of available

resources for both analysing and responding to state failure. Given the complex
nature of instability, integrating the array of available methodological approaches
and stabilising mechanisms across a range of international actors in a policycoherent and responsive manner is the best, perhaps the only, means for successfully addressing and preventing state failure.