Aid and Reform in Failing States

Lisa Chauvet and Paul Collier

Asian-Pacific Economic Literature, 2008, vol. 22, issue 1, pages 15-24

Abstract: This paper reviews the policy implications of research on reform in failing states ( Chauvet and Collier 2006, 2007a, 2007b, 2008; Chauvet et al. 2006; Chauvet et al. 2007a, 2007b). After providing a precise definition of state failure and reform in such states, we present the internal constraints impeding reform in failing states. Élite preferences and insufficient social knowledge seem to be the major constraints on reform. We find that financial aid tends to allow the ruling élite to postpone reform. Technical assistance, however, has some effectiveness in relaxing the capacity constraint to implement reform, notably right at the beginning of reform. Copyright © 2008 The Authors.

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