Key concepts and definitions

Fragile and conflict-affected states

While the definition of ‘fragile and conflict-affected states’ (FCAS) lacks consensus, most development agencies use the term to describe a fundamental failure of the state to perform functions necessary to meet citizens’ basic needs and expectations. This includes the assurance of basic security, maintenance of law and justice, and provision of basic services and economic opportunities (see GSDRC Fragile States Topic Guide). DFID (2005) defines fragile states as ‘those where the government cannot or will not deliver core functions to the majority of its people, including the poor.’

The terms ‘fragility’ or ‘situations of fragility’ are increasingly favoured, to acknowledge that fragility is not exclusively determined by the nature and boundaries of states, and that situations of fragility may exist within otherwise non-fragile states.

Economic development

DFID (2014a) states that ‘Economic development takes place when a country achieves long term, high rates of economic growth and when this growth is accompanied by a wider economic transformation that benefits the poor and shares prosperity broadly’.  This requires: 1) an inclusive growth environment, which ensures that institutions, resources and infrastructure create an enabling environment for private investment to bring stable and robust growth, and; 2) a growth transmission mechanism, which ensures that growth occurs in sectors that can generate quality jobs and transform the economy. Although there is general agreement that economic growth is necessary for sustained poverty reduction, USAID and DFID (2014) note that it is not sufficient, as income distribution is also determined by particular patterns of growth.

Inclusive Growth

According to USAID and DFID (2014), growth is considered to be inclusive if it significantly reduces poverty. The World Bank (2009) broadly defines inclusive growth as an absolute reduction in poverty, associated with the creation of productive employment rather than direct income redistribution schemes. It gives equal opportunity to the majority of the labour force in terms of access to markets, resources and unbiased regulatory environments for businesses and individuals. Loayza and Raddatz (2006) argue that sectors that are highly labour-intensive, such as agriculture, construction and manufacturing, have the greatest impact on poverty alleviation through increased income growth opportunities. Raniere and Ramos (2013) add that inclusive growth must also consider the impact of the growth process among different ethnic and gender groups and across geographical regions. This understanding of inclusive growth therefore incorporates the concept of horizontal inequality, or inequalities between culturally formed groups, in addition to vertical inequality, which is inequality among households or individuals (Stewart, 2002).

Transformational Growth

‘Transformational growth’ refers to growth accompanied by or resulting from a process of structural transformation, which involves the reallocation of labour and economic activity across the agricultural, manufacturing and service sectors (Herrendorf et al., 2014). Transformational growth requires a shift to higher productivity activities, and therefore involves technology adoption, resource mobilisation and a managed process of change (Salazar-Xirinachs et al., 2014).

Melamed (2013) proposes that social and environmental transformation are also required if economic growth is to lead to sustained prosperity for all. In this framework, social transformation involves greater distribution of growth’s opportunities and benefits. Environmental transformation entails reducing unsustainable natural resource practices and the risk of future environmental disasters or climate change.

Peacebuilding and Statebuilding

Peacebuilding involves ‘a range of measures targeted to reduce the risk of lapsing or relapsing into conflict, to strengthen national capacities at all levels for conflict management, and to lay the foundations for sustainable peace and development’ (United Nations, 2007).

Statebuilding is ‘an endogenous process to enhance capacity, institutions and legitimacy of the state driven by state-society relations. Positive statebuilding processes involve reciprocal relations between a state that delivers services for its people and social and political groups who constructively engage with their state’ (OECD-DAC, 2008).

While the key objective of peacebuilding is creating conditions where violence will not recur, the focus of statebuilding is on developing effective government, based on law and general consent (see GSDRC Topic Guide supplement on Statebuilding and Peacebuilding in Situations of Conflict and Fragility).

Political Settlements

A political settlement is ‘the forging of a common understanding, usually among elites, that their interests or beliefs are served by a particular way of organising political power’ (Whaites, 2008). This process involves contention and bargaining among elites, among elites and non-elites, among groups, and among those in the wider state and society (Di John & Putzel, 2009). The nature of the settlement depends on the inclusion or exclusion of each of these groups.

Conflict Sensitivity

Conflict sensitivity means the ability to:

• understand the context;
• understand how the context affects the intervention and how the intervention affects the context; and
• act on the understanding of this interaction to avoid negative impacts and maximise positive impacts (Conflict Sensitivity Consortium, 2004).

The relationship between a country’s economic characteristics and its fragility and susceptibility to conflict is complex and mutually reinforcing (see Holden & Pagel, 2012). Collier et al. (2009) identify three related causal paths: opportunity (or ‘greed’), grievance, and feasibility. These forces influence the relationship between fragility and economic development during various phases of conflict at the macro, meso and micro levels. While Collier-Hoeffler distinguish these forces, Keen (2001) and Cramer (2002) emphasise the importance of considering how they interact with one another, particularly how greed might emerge from grievances and how the greedy may manipulate the grievances of others.

This section focuses on the three main strands in the literature: the influence of economic development on fragility and the susceptibility to violent conflict; the mutually reinforcing nature of continued fragility/conflict and its associated economic characteristics; and the effects of a legacy of conflict/fragility on economic development. Of course, the fluid nature of fragility and conflict cannot be adequately captured by this structure.

• Collier, P., Hoeffler, A., & Rohner, D. (2009). Beyond greed and grievance: Feasibility and civil war. Oxford Economic Papers, 61(1), 1-27. See document online
• Conflict Sensitivity Consortium. (2004). Conflict-sensitive approaches to development, humanitarian assistance and peacebuilding: Resource pack. London: Conflict Sensitivity Consortium. See document online
• Cramer, C. (2002). Homo economicus goes to war: Methodological individualism, rational choice and the political economy of war. World Development, 30(11), 1845-1864. See document online
• DFID. (2005). Why we need to work more effectively in fragile states. London: DFID. See document online
• DFID. (2014a). Economic development for shared prosperity and poverty reduction: a strategic framework. London: DFID. See document online
• Di John, J. & Putzel, J. (2009). Political settlements (GSDRC Issues Paper). Birmingham: GSDRC. See document online
• Holden, J., & Pagel, M. (2012). Fragile states’ economies: What does fragility mean for economic performance? (Helpdesk request). London: EPS PEAKS. See document online
• Keen, D. (2001). Disqualifying grievance? A response to the Collier/Hoeffler model as an explanation for civil war. Presented at the CODEP Conference, School of Oriental and African Studies, London, June 18-20.
• Loayza, N., & Raddatz, C. (2006). The composition of growth matters for poverty alleviation (World Bank Research Working Paper 4077). Washington, DC: World Bank. See document online
• Melamed, C. (2013). Economic growth and transformation in a post-2015 agreement (Background paper). London: ODI. See document online
• Raniere, R., & Ramos, R. (2013). Inclusive growth: Building up a concept (Working Paper number 104). Brasilia: International Policy Centre for Inclusive Growth. See document online
• Salazar-Xirinachs, J. M., Nubler, I., & Kozul-Wright, R. (2014). Industrial policy, productive transformation and jobs: Theory, history and practice. In J. M. Salazar-Xirinachs, I. Nubler, & R. Kozul-Wright, Transforming Economies: Making industrial policy work for growth, jobs and development (pp. 1-40). Geneva: ILO. See document online
• Herrendorf, B., Rogerson, R., & Valentinyi, A. (2014). Growth and structural transformation. In P. Aghion & S. N. Durlauf (Eds.), Handbook of economic growth (vol. 2, pp. 855-941). Amsterdam: North-Holland. See document online
• OECD-DAC. (2008). State-building in situations of fragility: Initial findings. Paris: OECD. See document online
• Whaites, A. (2008). States in development: Understanding state-building (DFID Working Paper). London: DFID. See document online
• Stewart, F. (2002). Horizontal inequalities: A Neglected Dimension of Development (QEH Working Paper Number 81). Oxford: Queen Elizabeth House. See document online
• United Nations. (2007). What is peacebuilding? In Application Guidelines. New York: United Nations. See document online
• USAID, & DFID. (2014). Bangladesh: Inclusive growth diagnostic. Washington, DC and London: USAID and DFID. See document online
• World Bank. (2009). What is inclusive growth?. Washington, DC: World Bank. See document online