State Fragility and Implications for Aid Allocation: An Empirical Analysis

In recent years, state fragility has gained importance as a result of the perceived links between poverty, conflict, and global terrorism. In this paper, we examine the relationship between state fragility and aid by evaluating the literature and research programs currently extant. We bring conceptual clarity to the issue by developing and testing an alternative theoretical framework using CIFP's fragility index (articulated around the concepts of authority, legitimacy, and capacity [ALC]) and by using data collected for the period 1999—2005 to identify the empirical determinants of fragility. We then examine the effects of state fragility on aid allocation, using the ALC framework as defined. Our results indicate that aid allocation is directed toward states on the basis of their capacity and authority scores and not on the basis of their legitimacy scores. Finally, we assess the theoretical and policy implications of these findings and specify directions for future research.