Abstract
Simpson and Hawkins set Zimbabwe’s experience within the wider phenomenon of fragile/failed states. The authors review international evidence on the positive links between state effectiveness, state legitimacy, economic growth and poverty reduction. They argue such links provide essential insights into the causes and nature of Zimbabwe’s uniquely negative experience, characterised by economic destruction and poverty production rather than growth and poverty reduction. Attention is drawn to literature on the role of effective state bureaucracies in triggering both economic growth and development through nurturing of markets, the importance of removing obstacles to the participation of the poor in the economy, the role of the rule of law, the significance of social and fiscal contracts and the credibility and predictability of state policies, all features that became increasingly conspicuous by their absence in Zimbabwe.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
So, for example, the work of the International Crisis Group (ICG), an international NGO founded in 1995 in the aftermath of the conflicts in Rwanda , Somalia and Bosnia . It keeps a watching brief on countries undergoing or prone to conflict, and through its publications provides advice on conflict prevention and resolution.
- 2.
The term LICUS was used by the World Bank until 2006, when it adopted the more widely-used term ‘fragile states ’ in common with other international development actors.
- 3.
The CPIA is a composite index of 16 indicators grouped into four broad clusters, namely economic management, structural policies (these include the extent of openness to trade, the state of the financial sector in terms of variables such as stability and access, and the business regulatory environment in terms of whether it supports or hinders private enterprise), policies on social inclusion and equity, and public sector management and institutions. The CPIA is used by the World Bank, amongst other things, to determine eligibility of countries to access International Development Association (IDA) resources, the highly concessional soft loan window of the World Bank. The notion of ‘quality’ of any given country’s policy and institutional framework is defined as how conducive that framework is for fostering poverty reduction, sustainable growth and effective use of Official Development Assistance (ODA).
- 4.
Based at the Institute of State Effectiveness in Washington, DC, Ghani and Lockhart played a key role in highlighting the problem that fragile and failed states present to the international community, and have carried out seminal work in terms of designing toolkits for practitioners working in the area of building effective states in the developing world.
- 5.
The concept of economic structural transformation is based on the key observation, derived from global evidence, that as growth occurs there is a reallocation of economic activity away from agriculture in terms of output (contribution to GDP ) and employment towards urban-based manufacturing and service sector activities. This is accompanied by a migration of workers from rural to urban areas. This process is an ongoing one, and its features are present even in advanced industrial economies.
- 6.
The study showing the beneficial effects of such explicitly pro-poor programmes was conducted by Martin Ravallion. Based on a sample of 47 developing countries, he demonstrated that where there was both growth and rising income inequality, the average annual rate of poverty reduction as measured by the percentage of the population living below the US$1/day metric averaged 1.3 percent per annum (interestingly, the latter figure being close to the rate of poverty reduction in the Dollar and Kraay study). This contrasted sharply with those countries that combined rising average incomes with falling inequality, and which achieved average annual rates of poverty reduction closer to 10 percent per annum. Even more significant as an explanation of what happened in Zimbabwe during its ‘deep crisis’ years in the mid-2000s – which saw a rapidly contracting GDP , a rise in income inequality, as well as a vertiginous increase in both the number of Zimbabweans falling below the national poverty line and in the depth of their poverty – is the robust correlation between these variables established by Ravallion in the 47 developing countries sampled: “Amongst contracting economies it also mattered greatly what was happening to inequality: on average, when inequality was rising and average incomes were falling the poverty rate was rising by a dramatic 14 percent per year” (Ravallion 2001, 17).
- 7.
On this point, and based on the experience of East Asian economies, see Birdsall et al. 1995.
- 8.
Amongst the variables examined by Evans and Rauch were meritocratic recruitment (seen as translating into a greater likelihood of civil servants meeting minimum standards of technical competence), the existence of clearly defined long-term and rewarding career paths which led to an increased scope for experience to be accumulated, greater corporate coherence, reduced temptations to engage in corrupt practices given performance-based reward systems, as well as the adoption of longer-term planning horizons. They posited that bureaucracies that possessed such characteristics would help to trigger and sustain growth through a number of causal paths. The possibility of adopting longer-term planning horizons, for example, increased the likelihood that civil servants would be advocates for increased public sector infrastructure investment rather than consumption, with long-term benefits for growth.
- 9.
It is worth recalling that the legitimacy of the state in many East Asian countries such as South Korea and Taiwan during the period of their economic miracles was based on their ability to both plan and implement programmes leading to high economic growth rates that were sustained over extended periods of time and which resulted in the structural transformation of those economies. As with a later generation of East and South East Asian countries such as Singapore, Malaysia, Thailand, Vietnam, Indonesia and China , which have enjoyed rapid economic growth, undergone structural transformation, and overseen significant improvements in the welfare of their citizens, the legitimacy of the state in all these successful Asian economies (arguably irrespective of the degree of openness of their political systems) derived precisely from the fact that they are seen as ‘plan rational’, i.e. the raison d’être of the state was conceived in terms of its ability to oversee rapid economic development and ensure significant improvements in living standards, which in some cases took place over the course of a single generation.
- 10.
One common feature of such markets is that producers, buyers and sellers have differentiated access to information in such areas as prices and potential markets, allowing some to exploit the ignorance of others. The most common example given of such information asymmetries is that of small-scale agricultural producers, who are often exploited by middlemen given their inability to access information regarding market prices of both inputs as well as the prices their produce will fetch in destination markets. In such ‘thin’ markets, a few producers and traders may also achieve a monopoly position, and through such market power charge higher prices by restricting supply which in turn further restricts the growth of markets.
- 11.
Significant efforts have been made by the United Nations Department of Economic and Social Affairs (UNDESA) and the United Nations Capital Development Fund (UNCDF) to analyse the various constraints operating on financial markets in developing economies, the extent to which the poor are excluded from these, and to propose remedial measures that would enhance access of the poor to financial services. For an example of this work see UNDESA and UNCDF 2006.
References
Birdsall, Nancy, David Ross, and Richard Sabot. 1995. Inequality and Growth Reconsidered: Lessons from East Asia. World Bank Economic Review 9 (3, September 1): 477–508.
Dollar, David, and Aart Kraay. 2001. Growth Is Good for the Poor, Policy Research Working Paper No. 2587, April. Washington, DC: World Bank Development Research Group.
Evans, Peter, and James E. Rauch. 1999. Weberian Bureaucracy and Economic Growth: A Cross-National Analysis of the Effects of “Weberian” State Structures on Economic Growth. American Sociological Review 64 (5, October): 748–765.
Ghani, Ashraf, and Clare Lockhart. 2008. Fixing Failed States—A Framework for Rebuilding a Fractured World. New York: Oxford University Press.
Hawkins, Tony. 2009. The Mining Sector in Zimbabwe and Its Potential Contribution to Recovery, Comprehensive Economic Recovery in Zimbabwe Working Paper Series, No. 1. Harare: United Nations Development Programme.
Moore, Mick. 2004. Revenues, State Formation and the Quality of Governance in Developing Countries. International Political Science Review 25 (3): 297–319.
OECD-DAC. 2005. Piloting the Principles for Good International Engagement in Fragile States and Situations, April. Paris.
Putzell, James. 2010. Why Development Actors Need a Better Definition of “State Fragility”, Policy Direction Series, September. CSRC, London School of Economics.
Ravallion, Martin. 2001. Growth, Inequality and Poverty—Looking Beyond Averages, Policy Research Working Paper No. 2558, February. World Bank Development Research Group.
Sen, Amartya. 2000. Development as Freedom. New York: Anchor Books.
Stewart, Francis, and Graham K. Brown. 2010. Fragile States: CRISE Overview 3. Oxford: Centre for Research on Inequality, Human Security and Ethnicity (CRISE).
UNDESA and UNCDF. 2006. Building Inclusive Financial Sectors for Development. New York: United Nations.
World Bank. 2006. Engaging with Fragile States: An IEG Review of World Bank Support to Low-Income Countries Under Stress. Washington, DC: World Bank Independent Evaluation Group.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Simpson, M., Hawkins, T. (2018). The Economics of State Fragility. In: The Primacy of Regime Survival. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-72520-8_2
Download citation
DOI: https://doi.org/10.1007/978-3-319-72520-8_2
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-72519-2
Online ISBN: 978-3-319-72520-8
eBook Packages: Economics and FinanceEconomics and Finance (R0)