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Oxford Review of Economic Policy 2009 25(2):219-240; doi:10.1093/oxrep/grp013
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© The Author 2009. Published by Oxford University Press. For permissions please e-mail: journals.permissions@oxfordjournals.org

This article appears in the following Oxford Review of Economic Policy issue: THE POLITICAL ECONOMY OF DEVELOPMENT [View the issue table of contents]

The political economy of state failure

Paul Collier*
* Centre for the Study of African Economies, Department of Economics, Oxford University, e-mail: paul.collier{at}economics.ox.ac.uk


  Abstract

Rapid decolonization created many arbitrary countries. In contrast to those states which had emerged through a quasi-Darwinian process of selection, some of these new countries had structural characteristics which gravely impeded the provision of public goods. Their lack of a unifying sense of shared identity made cooperation difficult, and their tiny economic size left them unable to reap scale economies. Two public goods, security and accountability, are particularly important for development and so, where they could not be provided, states failed. The cause of a problem is not necessarily a guide to its solution: Darwinian struggle among failing states is not something to be encouraged. Solutions lie partly in a phase of international provision of the key public goods, partly in enhanced regional pooling of sovereignty, and partly in institutional innovation to make the domestic provision of public goods less demanding of the state.

Key Words: state failure • economic development • public goods • security • taxation • accountability


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