How To Escape The Perils of Fragility

Weaker growth raises the probability of entering into fragility, with substantially larger impact.

Already facing huge development needs, the COVID-19 pandemic is exacerbating the challenges facing fragile and conflict states—a group of currently about 40 countries trapped in cycles of low administrative capacity, political instability, conflict, and weak economic performance. Our new IMF staff working paper, which analyzes the experiences of 196 countries between 1979 and 2018, shines a light on how countries can avoid or break out of this trap.

Our study also finds that countries that successfully exit from fragility spend more on health and education than those countries that do not escape.

Effective institutions, in turn, provide a foundation for a strong economy.

Finally, countries can escape from fragility by seizing a pivotal moment—a critical juncture that presents a rare opportunity for change (e.g., after a crisis or a change of leadership). 

https://blogs.imf.org/2021/08/03/how-to-escape-the-perils-of-fragility/

Citation: IMF