Failed states are governments that lack the monopoly of legitimate violence in their territories.  They cannot create the security mechanisms to control militant network growth. Self-funding non-state actors have become powerful military players – a problem that hasn’t been seen since the last era of Steppe nomad invasions.

Failed and weak states are widespread. One of our major objects is correcting failed states while defeating the security threats that emerge from these regions.
Here’s a small version of the Map from Foreign Policy’s Failed States Index
There is a substantial difference between modernized nation-states and failed states.

The Core/Semi-periphery/Periphery Relationship

  •  Core nation-states function like empires throughout history. They consist of stable, legitimate governments providing standardized law within a free trade area. Free Trade organizations replaced the primary function of empire.
  • Semi-peripheral states trade with the Core, but exist partially or entirely outside the Core legal and political system.
  • Peripheral states and tribes exist on the margins and threaten the integrity of the Core.

The “Core” is not necessarily defined by territorial boundaries. Peripheries can be found inside the political borders of a Core state, and Peripheral states may have a small Core region around a trading port or major city. The relative position of Core regions is dynamic due to shifting technology and economic structures. In the 20th century, empires dissolved as global free trade organizations emerged.

States expand their influence and control when the have advantages in technology and organization over their neighbors. As rival states modernize, the system inverts and returns to its original state, more or less like a rubber band.

“Globalization” describes how new communication and transportation technologies amplify interconnectivity between states. Trade increases efficiency, innovation and wealth which further reinforce globalization.

Socialist economies collapsed due to their fatal inability to command a complex system. Liberalism replaced unstable socialist systems, leading Fukuyama to conclude that capitalist democracies triumphed in this “End of History.” The modern “market states” recognize that industry seeks freedom, and industries and entrepreneurs will relocate if that freedom is threatened. All states have a high incentive to increase freedom for higher wealth generation and technological development, even if there is a cost to state power.

Fukuyama is correct that free-market democracies won the previous political struggle. However, there is no end of history, the cycle simply restarts as new experimental political ideas emerge and compete. New economic and ideological structures have altered social patterns in our world system creating new competitors to experiment and compete with liberal democracy. These new competitors range from authoritarian capitalism of China to Salifist Islam.

The victory of liberalism cannot last in its current form. The Westphalian nation-state did not take root in the Periphery. Globalization means there will be greater interaction between Core and Periphery states as the Periphery disintegrates into endemic warfare and crime.

Failed States and the Periphery
The proliferation of modern communication and transportation technology allows non-state actors, based in failed state regions, to harm Core states. Political borders have no meaning if they can be quickly and easily crossed. Criminals, terrorists, insurgents, and contagious diseases grow unchecked in failed states then ‘spillover’ onto the Core.

Peripheral states are weakened by implicit flaws in their structures.
1. Informal property rights. Citizens do not officially own their property. Capital is inert and non-fungible.
2. Informal market. Up to 80% of the economy is unregulated and unofficial.
3. Black Markets and Criminal organizations emerge in the absence of authority.
4. Criminal Organizations defend their black market with military force

This creates a negative reinforcing loop in the system.
Weak state –> growth of black markets –> growth of criminal organizations –> growth of militant non-state actors –> further weakening of the state… etc.

Core states developed a balancing loop to prevent that systemic failure. Opposing factors can hold certain factors in balance like a see-saw. Security forces can never eliminate crime and militant networks; they balance criminals and minimize the damage they do to society.

No matter how effective a Core state is at protecting its domestic population, it is harmed by weak peripheries.

  • International Trade Routes are vulnerable to attacks and raids
  • Transnational Criminal Organization raise crime rates in the Core
  • Insurgents and Terrorists receive de-facto safe-harbors in Failed State regions

The Core state is harmed through no fault of its own. This is the ancient problem that plagued ancient Egypt, Persia, Rome, and China. Empires rarely waged war against other empires, but they often died the death of a thousand cuts as myriad barbarians overran their borders.

The logistics of independent non-state actors are limited by their funding. Interpol estimated that the size of the annual global black market to be between $1-3 trillion USD. That is hardly a limitation.