Failed States and Development

Earlier this week, Foreign Policy released the latest edition of its Failed States Index (via Daily Dish's Patrick Appel). It's based on a database of 12 indicators of state cohesion and performance for 177 nations. So my colleague Charlotta Mellander decided to compare it to our Prosperity Institute economic development database which has a wide range of indicators for output, productivity, human capital innovation, life satisfaction, human development, and economic structure. The findings, while not particularly surprising, are nonetheless interesting. FP asks:

"[W]ho (or what) is to blame when things go bad--corrupt leaders, dysfunctional societies, bad neighbors, a global recession, unfortunate history, or simply geography itself? "

The simple answer that comes from our analysis is development - or lack of it. Failed states not only fail on state cohesion and performance, they also fail on measures of economic development -  from output or GNP per capita and total factor productivity to human capital, life satisfaction, and more. And failed states apparently lag badly on the transition to knowledge-driven, creative economies.