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AEC 2012 - Avoiding the Fragility Trap in Africa

16-Oct-2012

Not only do Africa’s fragile states grow more slowly than non-fragile states, but they seem to be caught in a “fragility trap”. For instance, the probability that a fragile state in 2001 was still fragile in 2009 was 0.95. This paper presents an economic model where three features— political instability and violence, insecure property rights and unenforceable contracts, and corruption—conspire to create a slow-growth-poor-governance equilibrium trap into which these fragile states can fall. The analysis shows that, by addressing the three problems, fragile countries can emerge from the fragility trap and enjoy a level of sustained economic growth. But addressing these issues

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