The best books on Failed States

recommended by Clare Lockhart

The director of The Institute for State Effectiveness, Clare Lockhart, questions the role of the state and discusses the effects of failed states on both neighbouring and local populations. She picks the best books on failed states.

Interview by Roland Chambers

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Clare, we’re talking here about failing states, and in your own book, Fixing Failed States, you provide extensive criteria for defining them. Can you explain what you mean more succinctly here?

Well, one might say quite reasonably that you know one when you see one. In many parts of the world failing states become not only a threat to the countries which surround them, but also to their own populations. And we’re not just talking about Iraq and Afghanistan, or Haiti and Somalia. I think the question of the degree of state functionality applies even to countries such as America and Britain and France and Germany which are struggling with questions of what a state does and what a state is. As we’ve learned painfully over the last few months, there are questions about the relation of a state to the market, and the relation of the state and the market to civil society in the 21st century.

And are we saying that the state is local and that the market is international? You distinguish between the state, the market and civil society. How do you locate these three things? What do you mean by them?

That’s a very interesting question. I think that the European Union has come up with a very useful concept, which is that of subsidiarity: this means that the citizens take decisions at the most local level. And that applies to the way that funds are organised and states are organised and the way that markets and also civil society is organised. It was John Dewey who said that the state is just a mechanism which does at any point what its citizens want it to do. And that’s my first book, John Dewey’s The Public and its Problems, which he wrote in 1927.

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Dewey is saying that the key is how to organise the type of public discussion which needs to take place so that the citizens can decide what they want the state to do. This really puts at the centre of this discussion the notion of the state as essentially a mechanism whose sole function is to serve its population.

So in effect the state is, or should be, philanthropic and unselfish according to Dewey? The state does not totalise or dominate or set up its own interests against the interests of its citizens?

The state may need to dominate in that it needs to have a monopoly on the means to violence, or the legitimate means to violence, as Max Weber said. But beyond that, it is an instrument of collective power. It harnesses power in order to serve the population.

So the state is an enabling structure?

It can be. It should be. But in many parts of the world today it is a predatory structure. Because it has become captive to interest groups who use it as an instrument to oppress the population. In different parts of the world, of course, we see different kinds of abuse of the state. What we’re understanding, for example, with the present collapse of the global markets is that we need to rethink the role of the state and particularly the relationship between the state and the market in every context. I was recently at a meeting of democratic senators and they were saying we need to rethink the role of the United States in the 21st century. And they were referring to state level governance in the western seaboard of the United States.

And why were they particularly concerned about the western seaboard?

I think they’re realising the force of globalisation, which means that a whole set of assumptions that applied in the last century do not apply in this one, which requires them to rethink how the states serve their citizens and how they interface with and regulate the market. And with the globalisation of the media and civil society and the market, we need to rethink our organisational paradigms in all areas of life.

OK this takes us to our second book, James C Scott, and he’s also talking about the state and his book is called…

Seeing Like A State. He’s quite similar to Dewey in a way. He also sees the state as only a mechanism. But he thinks that the way that the state chooses to count, or the way it chooses to see, will inform how it behaves and what kind of animal it becomes. Scott explains, for example, how in France, in early modern times, the state decided to count two things. It decided to count how much salt there was and how many able-bodied men there were, because it wanted to tax the salt and send the able-bodied men off to war. Now perhaps the state decides to count other things, how many healthy people there are, how many well-educated people they are… So that what the state chooses to count determines the parameters of what the state chooses to do.

The fact is that there are always people running the state. People inhabiting and running that apparatus…

And so the key challenge is how to make them accountable. The problem in many of the countries which the institute I co-founded works in is that many revolutionary leaders who spend a long time trying to get into power continue to believe, once they get into power, that they are ‘outlaws’ or above the law and not accountable to the rule of law.

They still feel that they are the underdogs? That some injustice is being perpetrated on them?

Exactly, so that they will not submit themselves to the rules being made by the people.

So one of the problems of the state is that, should it fail, it relies on the fact that those who adjust for that failure have read and agreed with John Dewey?

Yes. But as James Scott describes, as you abstract information from people and aggregate it upwards and you move towards industrialisation and large, centrally planned cities, that information becomes abstracted from the lives of people. The state no longer understands the way in which people experience the structures that are imposed on them.

As during the Great Leap Forward in China, when in order to meet government targets, farmers invented phantom bumper harvests on which they paid tax in corn and starved.

Exactly. So one of the challenges is how to manage that kind of scale bureaucratically while permitting individuals to pursue their own lives. And that is why we created the national solidarity program in Afghanistan, which still has a national rule of law framework that gives money directly to all the villages and lets the villagers decided how to use that money. So it is possible, you see, to have the rule of law and also radical decentralisation.

This take us to markets, doesn’t it? The idea of a perfect relationship between state and citizen, in which the citizen does not feel constrained, but only liberated by the law, is the dream of perfect government. But in practice it is the market that challenges the state. It is the market that enables citizens to determine their own future?

So my third book choice is The Mystery Of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Hernando de Soto is a Peruvian economist and one of his earliest books was The Other Path, as opposed to the Shining Path, which documents his attempts, along with the government of Peru, to engage with the Shining Path. And his basic thesis in that book is that many so-called insurgents don’t actually want to bring the system down. Instead they are excluded from the system, resent their exclusion, and want in. So they want in, not out. Their bitterness is the result of frustration and so the solution is not necessarily to go after them but instead to find ways to empower and enfranchise them and to give them legal status.

But how would you do that?

Well they did it in Peru by hiring a bunch of ex-policemen, who worked with the police force and went around the peasantry who were the main recruiting ground for the Shining Path and gave them legal title to their land—the land that they were on.

Emancipating the serfs?

Yes. So this solution – the provision of legal title to the peasants – is credited with bringing an end to the instability which the Shining Path brought to Peru. Of course the provision of legal rights depend on there being a system to enforce those legal rights and de Soto’s The Mystery Of Capital spends a lot of time examining this and documenting how it is that people can effectively be given legal possession not only of their land but of their houses and businesses. He tracks how long it takes in different parts of the world to register a business or piece of land. In some countries it can take up to 15 years. So he’s arguing for radical simplification in the rules of the game – the processes of the state. And what’s interesting is that he sees the state as an impediment to recognising the legal status that would provide the stability that in turn allows for individual enterprise and economic growth.

So this is an instance of the market informing the state?

Yes, the needs of the market, the needs of people to have predictability and ownership and so forth…. Dewey would say that the state is a mechanism. The state is a set of rules by which you play the game. The game is the market. The Mystery Of Capital documents the amount of dead or useless capital in the world. There’s all this value in terms of assets around the world, but because it’s not recognised by law or given legal status, we don’t count it. As James Scott’s Seeing Like A State points out, the state only sees what it can count. As de Soto points out, if the land is not owned by its tenants because they are living on it in slums or as feudal peasants, then you can’t count the land. Now in terms of a failing state this becomes an issue because the question is whether aid should go through the state, or whether you should encourage local investors. And this is of crucial significance in post-conflict environments, in terms of replacing jobs and local businesses, in which the population of that country has a stake. And in all the countries that Ashraf Ghani and I discuss in Fixing Failed States, the ones that developed successfully created an environment for a domestic set of firms to emerge. Because you don’t just want workers, you want owners who have a stake in the legitimate system and therefore a reason in seeing the rules of the game upheld. So you need the jobs, but you also – as in Spain after Franco – need the middle managers and the owners.

So – your fourth book?

My fourth book is Illicit, which talks about the illegal, the criminal and the illicit economies. De Soto’s theories about terrorism and why people might be attracted to terrorist causes have huge implications. They provide useful insights as to how we deal with terrorism and provide disenfranchised sections of the population with legitimate representation. That is one of the key ways that the problem was dealt with in Northern Ireland, and in Peru, and which I think will be one of the key ways the problem in Afghanistan and Pakistan will be addressed. So, enfranchisement and legal status. Illicit is talking about the other side of the coin, and the – in his view – growing illicit economy. The drugs economy, money laundering, smuggling of people and guns and antiquities, globally, and how these flows work and how we read them as a system. There are some very interesting stories and vignettes from all over the world. How customs officers at frontiers are trying to prevent the flow of elicit goods, but how really the value of these elicit goods is so overwhelming that it is just corroding the state. So we have a real problem to confront collectively.

The corrosion of the state, or the corrosion of the…

The corrosion of the legitimate order. The state is the principal means of organising the rules of the game. It is the guardian of the law for each piece of territory, and the globe is made up of these pieces of territory. Over time we have put more and more of our resources and credence into the market and we have forgotten about the state. The state has become smaller and more corroded and less respected. But in order for the legitimate market to operate smoothly we need certain of the state’s functions to be performed.

But there’s one thing I want to clear up. This is not always the state is it? I mean, there are institutions which are not businesses which are larger than the state.

Yes, but these institutions should and usually do defer to the state. The European Union in particular talks about where decisions should be made. The principle of subsidiarity is the principle that decisions should be made as close to the citizen as possible. But if it’s a question of what crops should be planted next year, or whose field should lie fallow, that should be taken at a village level. If it’s a question of at what time buses should run to school given the daylight hours, that should be a district level decision. If it’s a question of where a ring road should be built, that’s a provincial level decision. If it’s a question of what shops should open on a Sunday, that’s a town decision. But how much to post a letter, or what’s the picture on the currency, well, that should be a national level decision. And what shape should the sausages be? Well obviously that’s a decision for the European Union. This is the debate the United States has had over the past centuries. What should be the division between federal rights and state rights – who gets to decide what? I mean, we’re no longer really arguing about whether the state should exist at all. It’s more, given these federal entities – the United States, the European Union, the African Union – at what level decisions should be made. And that’s a question of architecture.

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Well it does seem amazing that we have a European Union at all.

It started over coal and steel. Which brings us back to The Mystery of Capital. People will co-operate through trade. When the princes are all feuding, it’s the merchants who co-operate to organise cross-border trade treaties.

So your fifth book?

Natural Capitalism: Creating the Next Industrial Revolution, which Amory Lovins wrote with Hunter Lovins and Paul Hawken. This was a huge inspiration for Thomas Friedman’s recent book, Hot Flat And Crowded, and talks about social economics and bureaucratic systems and how we need to re-engineer them completely for the 21st century. Amory Lovins is approaching this problem set as one which is primarily environmental, addressing the need to take care of scarce resources on the planet and suggesting how we might reconfigure our systems with that goal in mind.  Ashraf Ghani and I learned a lot from Lovins and applied what we had learned in the context of national stability when we were writing Fixing Failed States.

Interview by Roland Chambers

May 13, 2009

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Clare Lockhart

Clare Lockhart

Clare Lockhart is director of the Institute for State Effectiveness, founded in 2005 to provide 'strategic, practical and operational solutions to state failure worldwide'. She has worked for the World Bank and the UN. Trained as a barrister, she helped write the Bonn Agreement that formed the Afghan government. During her years in Kabul, she played a key leadership role in developing the National Programs approach to Afghanistan's reconstruction efforts.

Clare Lockhart

Clare Lockhart

Clare Lockhart is director of the Institute for State Effectiveness, founded in 2005 to provide 'strategic, practical and operational solutions to state failure worldwide'. She has worked for the World Bank and the UN. Trained as a barrister, she helped write the Bonn Agreement that formed the Afghan government. During her years in Kabul, she played a key leadership role in developing the National Programs approach to Afghanistan's reconstruction efforts.