Once they were called ‘low income countries under stress’. Then ‘difficult partnerships‘. It was Oxford economist Paul Collier who coined the phrase ‘fragile states’ and his influential study The Bottom Billion which illuminated how corruption and political instability keep so many people in poverty. He told Developments of the four ‘critical priorities’ vulnerable countries face.

There was a time when the world could get by with ignoring fragile states. Not any longer?

Not so long ago there were five billion people living in poor countries that were stuck. And now there’s about one billion living in poor countries that are stuck. Four billion people are living in countries that have been developing pretty fast, converging with the rest of mankind.

There are still lots of poor people in them, but they’re living in societies that are making progress. And that makes a huge difference, because those societies are offering hope.

And then among the countries that are stuck – what I call the bottom billion – is a minority or maybe half of these countries – that are really not even able to deliver the most fundamental public goods to their citizens. And those are what I think of as fragile states.

Is it the case that without first achieving security, these countries can't really develop?

Clearly, macro level insecurity – when the state itself is in jeopardy and doesn’t control its territory – makes any form of economic development very hard. Because intrinsic to economic development is investment, and you’re not going to get much investment in an environment of macro insecurity.

I think the way out of these environments is a very limited, very focused package because the capacity for change in these societies is very limited. Often the government’s not able to do very much, and people have no self-belief in their society. It’s got to be kept simple. So you’ve got to start from the critical priorities and it doesn’t reduce to one.

But of the critical priorities, security would always be one?

Security will always be one, and usually that means international provision of security. Every situation is unique but very often with fragile states international provision of security would be central.

A second priority is going to be replacing social services and that’s important twice over. One is that social provision in these societies is deplorable, so we’re looking at chronic need. And secondly social provision is the main way in which governments are going to be seen to be visibly doing something that benefits ordinary people. I don’t believe that legitimacy is achieved primarily through elections. We think of elections as generating legitimate and accountable governments, but honest elections depend upon a load of checks and balances and institutions, which take a long time to build and are missing in these societies. So legitimacy of government in these societies has to come through government visibly doing simple but important things for the people.

This means basic health, basic education, some roads… high profile things that help with social provision and help the economy to get on its feet.

Along with security and social services, what's next?

The third element has got to be jobs, especially jobs for young men – because they’re the epicentre of trouble. You don’t get many rebel groups staffed predominantly by elderly women. So we need to generate a lot of jobs for young men. That’s not going to be done directly by public employment because that’s fiscally unsustainable. And the government doesn’t have the management capability to run big public enterprises as a business. So it has to be essentially the private sector, but that’s difficult because for any activities which are internationally tradeable, like manufacturing, a fragile state is rarely competitive. Fragile states usually have too much going against them for global manufacturers to be wiling to locate in them. So if you rule out sectors such as the garment trade which have to compete headon with foreign-produced goods, you’re left with what economists call the ‘non-tradeables’.

And the key is the construction sector. The construction sector produces structures. You can’t import a building – it has to be built in the country, so it is naturally protected. It can be very labour intensive and it employs young men – pretty unskilled many of them. And what do these fragile states need? Many are post-conflict and what is needed is reconstruction. So this is to my mind the sector which can be really scaled up. So leg three is to expand jobs and the one big one is the construction sector. If you can do that it’s win-win because you get the jobs and you get the structures.

And the fourth leg?

This is about accountable government. And I’ve got to come down to something specific – with fragile states the politics starts very badly in two senses. You’ve got a lot of crooks in politically powerful positions because crooks have got the money and you get power by patronage. And the other is this pervading sense of hopelessness, and the belief that the only way I can go up is if you go down – that the pot we’re fighting over is fixed, and if I have it, you don’t. There’s no winwin. That’s a zero sum game. We can’t cooperate in that environment. We fight, either literally or metaphorically. So, with this combination of crooks in power – because they’ve got the money and patronage – and the mentality of the zero sum game, there isn’t the basis to deliver socially useful solutions.

But you break that cycle with good politics, which it follows rather than leads the process of escape in two senses. One is the mentality: if you have a decade of fast growth (perfectly possible in these societies because there are so many opportunities), then after a decade or so people start to change their mentality from zero sum. The economy growing means win-win, the psychology changes from zero sum to what’s called positive sum – “if we cooperate we both gain”. However it takes time to shift the mentality.

Secondly, you have to squeeze out the patronage politicians… And the best way of doing that is to make it impossible to loot the public purse. This is where donors are important and why governance conditionality is key. It means trying to insist that the government be accountable to its own citizens. Not “this is what it must be spent on”, but “this is the process by which it must be spent”.

When Paddy Ashdown wrote his book about his experiences as grand high representative for Bosnia, he concluded that “what I needed was not doctors without frontiers, it was accountants without frontiers.” And that seems to me dead right… It’s our responsibility as donors to make sure the money can’t be looted. Because if it’s looted, it’s captured by crooks and that empowers the crooks, and compounds the problem. If you close the spigot of looted money and build the economy over a decade, I think the politics will change.

So the last leg is the slow process of changing the politics. And I don’t believe there’s a quick process. It’s this two-prong strategy: rapid economic development gives hope and changes the mentality, and it closes off the lootable money and if the crooks can’t get money, they’re less inclined to hang on.

Security, social services, jobs and accountable government - are there any other key steps in escaping the failed state?

The important thing is getting started. Getting started is very hard. I worked with the Ugandans through the 1990s and at the start of that period they were a classic fragile state. By the end of it they were growing fast, they were confident, the president was ambitious for development and they were all going well. After you get out of the range of fragile statehood, we kind of know what we’re doing more. It becomes a normal developing country.

Opportunities differ but there’s no substitute for taking some sort of strategic view of your opportunities. Rwanda, for example, knows it’s got very limited opportunities. It’s landlocked, a lot of land pressure, big population. so it’s trying to make a go at e-services, which over a 20-year horizon is a very sensible vision. Uganda’s just discovered oil. Fantastic opportunities! Uganda’s going to get $50bn in oil! So everything in Uganda now depends on, can they invest that sensibly, or do they just fritter it way.

All solutions have to work in the short run, because if they don’t work in the short run, you don’t get to the long run. So the key challenge is to find steps which work in the short run but which lead towards a viable long run. But usually this four-fold approach has not been followed. Security has been absolutely separated from the other strategies. Aid hasn’t been linked to good governance. There hasn’t been a focus on jobs. But these are not hopeless environments. In all of these societies there are amazing, brave, dedicated people struggling for change. They’re facing people who’ve got money and are often violent. We’ve got to try and make it harder for the crooks to win, and change the mentality so that a critical mass of people begin to realise that by cooperation, everyone can win.

Paul Collier is professor of economics and director of the Centre for the Study of African Economies at Oxford University. His 2008 book The Bottom Billion asked “why the poorest countries are failing and what can be done about it?” His 2009 book Wars, Guns and Votes, looked at “democracy in dangerous places”, and how poor countries can find long-term peace and security. In 2010, The Plundered Planet will “confront the global mismanagement of nature” and “chart a course between unchecked profiteering on the one hand and environmental romanticism on the other”.