{
  "title": "Avoid a Fall or Fly Again: Turning Points of State Fragility",
  "publication": "IMF Working Papers, May 6, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/05/06/avoid-a-fall-or-fly-again-turning-points-of-state-fragility-50242",
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  "summary": "High persistence of state fragility (a fragility trap) suggests the presence of substantial benefits from avoiding a fall into fragility and considerable hurdles to successful exit from fragility.",
  "sections": [
    {
      "heading": "Research question and methods",
      "content": "- Empirically examines factors affecting turning points of entering and exiting from state fragility.\n- Methods employed:\n  - An event study.\n  - The synthetic control method.\n  - A logit model."
    },
    {
      "heading": "Key findings",
      "content": "- High persistence of state fragility (\"a fragility trap\") implies substantial benefits from avoiding a fall into fragility and considerable hurdles to successful exit from fragility.\n- Avoiding economic contraction is critical to prevent a country on the brink of fragility from falling into fragility.\n  - Example statistic: among near fragile countries, the probability of entering fragility would rise by 40 percentage points should real GDP per capita growth decline from +2.5 percent to -2.5 percent.\n- Strengthening government effectiveness, increasing political inclusion, and maintaining robust economic activity support more successful and sustainable exits from fragility."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- In the context of the COVID-19 crisis and its aftermath, the findings suggest:\n  - Provide well-directed fiscal stimulus with sufficient financing, subject to appropriate governance safeguards and well-designed policies.\n  - Protect critical socio-economic spending to keep vulnerable countries away from being caught in a fragility trap.\n- Emphasize combined policy action:\n  - Fiscal support to avoid economic contraction.\n  - Reforms to improve government effectiveness.\n  - Policies to increase political inclusion alongside measures to sustain economic activity."
    },
    {
      "heading": "Thematic scope and analytical focus",
      "content": "- Focus areas highlighted in the study include:\n  - Econometric analysis and logit models of state fragility turning points.\n  - Links between income (real GDP per capita growth), government effectiveness, political inclusion, and fragility dynamics.\n  - Relevance for sectors such as Education spending and Health care spending when protecting socio-economic priorities.\n\nSource: \"Avoid a Fall or Fly Again: Turning Points of State Fragility\", IMF Working Papers, May 6, 2021.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/05/06/avoid-a-fall-or-fly-again-turning-points-of-state-fragility-50242"
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    "Authors: Olusegun Ayodele Akanbi, Nikolay Gueorguiev, Jiro Honda, Paulomi Mehta, Kenji Moriyama, Keyra Primus, Mouhamadou Sy",
    "Published: May 6, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513573687.001",
    "Empirically examines factors affecting turning points of entering and exiting from state fragility.",
    "Methods employed:",
    "High persistence of state fragility (\"a fragility trap\") implies substantial benefits from avoiding a fall into fragility and considerable hurdles to successful exit from fragility.",
    "Avoiding economic contraction is critical to prevent a country on the brink of fragility from falling into fragility.",
    "Strengthening government effectiveness, increasing political inclusion, and maintaining robust economic activity support more successful and sustainable exits from fragility.",
    "In the context of the COVID-19 crisis and its aftermath, the findings suggest:",
    "Emphasize combined policy action:",
    "Focus areas highlighted in the study include:",
    "**Working Paper**"
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