Axel Dreher, Valentin F. Lang, and Sebastian Ziaja
This chapter reviews the aid effectiveness literature to assess whether foreign aid given to areas of limited statehood (ALS) can be expected to promote economic and social outcomes in the recipient country. It distinguishes between different types of aid, motives for granting it, recipient country policies and characteristics, and the modalities by which aid is delivered, as these factors have been argued to influence its effectiveness. This chapter then compares these properties between recipients most affected by limited statehood and those least affected. This allows us to assess the relative effectiveness of aid in countries with ALS. We conclude that on average aid given there is less likely to be effective than elsewhere. As countries with ALS, however, constitute a heterogeneous group, the specifics of individual countries and the types of aid given matter.
Lars Brozus, Christian Jetzlsperger, and Gregor Walter-Drop
The idea that a competent state should be the dominant model of organization for political communities has always been at odds with the reality of ineffective governments in many parts of the world. With the end of the bipolar confrontation, the strategic interest in keeping these ‘fragile states’ alive significantly declined while the onset of globalization processes dramatically increased interdependence and interconnectedness. Thus, limited statehood (or ‘state fragility’) became associated with global security threats such as international terrorism and organized crime. The international interventions in ex-Yugoslavia, Iraq and Afghanistan led to the emergence of ‘state-building’ to solve these problems. The rather mixed results of state-building efforts resulted in a more modest concept of ‘stabilization’ that focuses on immediate conflict management and preventing institutional failure. Building on the various theoretical and empirical developments, we suggest ‘governance-building’ as an alternative concept to guide policy vis-a-vis areas of limited statehood.