Chapter 1. Overview: Violence, fragility and finance

Wendy MacClinchy
Independent Consultant
Rachel Scott
Development Co-operation Directorate, OECD

This chapter begins with an overview of the main trends and findings around violence – its scope, impact and cost. This is followed by a review of the OECD fragility framework, and its five dimensions of fragility, accompanied by an analysis of what the 56 countries deemed fragile under the framework tell us about fragility in the world today. The chapter continues with a review of the different financial flows – foreign investment, official development assistance (ODA) and remittances – to fragile contexts, casting a spotlight on how ODA is used to address fragility and violence, and how ODA relates to the different dimensions of fragility. The conclusion looks at opportunities for more effective programming, including recommendations in the area of policy, programming and financing.

  

A violent world

The world has become a more dangerous place. Although long-term trends suggest the world is more peaceful than in previous centuries, evidence also indicates violence is on the rise and increasingly complex (Box 1.1). Over the last 15 years, 53 countries have been or are now affected by some form of political violence. Nearly half the world’s population, or 3.34 billion people, live in proximity to or feel the impact of political violence. High homicide rates in Central America, ongoing crises in Africa’s Great Lakes region, state failure and human trafficking in North Africa – these and other forms of violence overlap and continuously shift among actors, means and objectives. Neither wealth nor development renders countries immune. High violence rates also affect those middle-income countries where political exclusion and unregulated urban growth have deepened horizontal inequalities, marginalising portions of the population and making them more vulnerable to exploitation, violent extremism or interpersonal violence. The unsettling reality is that the world is a more dangerous place than it has been for decades.

Box 1.1. Defining violence

Debates over typologies and categorisation of violence reveal the challenge in addressing its scope. Violence manifests itself in multiple forms, modalities and patterns. As a result, it can be difficult to define. The World Health Organization’s broad, encompassing definition of violence captures this range of characteristics:

The intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community, that either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment or deprivation. It takes the forms of self-directed violence, interpersonal violence and collective violence.

Political violence: in this report, political violence describes the use of force towards a political end that is perpetrated to advance the position of a person or group defined by their political position in society. Governments, state militaries, rebels, terrorist organisations and militias engage in political violence, as well as actors who may adopt both political and criminal motives.

Social violence: the term social violence refers to a broader manifestation of grievances, criminal behaviours and interpersonal violence in society. These include multiple types of crime, homicides, and interpersonal and self-directed violence.

The Geneva Declaration Secretariat, in its Global Burden of Armed Violence series of reports, uses a “unified approach” to lethal violence to encompass conflict, criminal and interpersonal forms of violence. This permits the inclusion of global data on homicide, conflict and other forms of violence from a large variety of sources, thus a picture of lethal violence in both conflict and non-conflict settings.

Sources: WH0 (2002) and Geneva Declaration Secretariat (2015).

By 2030, well over 60% of the global poor will be in fragile contexts (Box 1.2). The poorest people will be the first to directly confront the greatest challenges of our time. Vulnerability stems from a multitude of factors often including endemic poverty, weak government capacity, poor public service delivery, and economic exclusion and marginalisation. Political instability, recurrent cycles of violence targeting civilians, and entrenched criminal networks are increasingly common where there are economic shocks, weak rule of law and flagging institutions unable to provide the most basic services to their people. The picture grows starker still when the impacts of environmental disasters, climate change and forced displacement are added. Threats may take on a more acute form when they happen together, creating a loop of cause and effect and compounding risks that contribute to fragility.

Box 1.2. What is fragility?

States of Fragility 2016 characterises fragility as the combination of exposure to risk and insufficient coping capacity of the state, system and/or communities to manage, absorb or mitigate those risks. Fragility can lead to negative outcomes including violence, the breakdown of institutions, displacement, humanitarian crises or other emergencies.

The OECD’s fragility framework provides a comprehensive picture of fragility around the world. The calculations reflect a systems-based conceptualisation of fragility. Risks and capacities are measured in five dimensions: economic, environmental, political, security and societal. In addition, capacities are measured at state level, as well as incorporating the various formal and informal mechanisms societies can draw upon to cope with negative events and shocks. The choice of these dimensions, and the decision to take a whole of society approach to fragility, is based on expert judgement. It is one of the key outcomes of the consultation process underlying the new OECD fragility framework.

Violence is one of many factors that can contribute to fragility. However, it is not the only factor, and the presence of violence does not automatically mean that a context is fragile. States of Fragility 2016 places a spotlight on violence, in all its forms, to explore how violence can contribute to fragility, and examine what should be done about it.

Violence is increasingly driven by domestic political instability. The prevalence of political violence can often be traced to structurally weak institutions led by governments that practice systemic economic and political exclusion of sections of society. This in turn deepens the state’s legitimacy crisis, provokes the breakdown of the social contract between state and citizen, and can lead to continued cycles of poverty and other forms of violence, including conflict. Criminal networks can take root in these circumstances, where weak rule of law allows perpetrators of homicide and interpersonal violence to act with impunity against vulnerable citizens. This type of social or criminal violence that has no overt political agenda is widespread and has reached epidemic proportions in some regions, particularly in Latin America.

Most lethal violence occurs in the form of interpersonal violence, outside of conflict settings and away from international attention. The negative feedback loop of social violence, political instability and criminal networks deepens vulnerabilities in new ways and with higher costs than ever recorded. These different forms of violence feed off each other: breakdowns in rule of law institutions resulting from conflict pave the way for higher tolerance of interpersonal violence, increased weapons and drug trade, and political corruption. As the evidence in this report suggests, the international community must broaden its focus beyond conflict to understand the multiple risk factors and dynamics associated with violence at the subnational and local level as well as at the interpersonal level.

In fragile and conflict-affected societies facing the most extreme risks, new research on violence presents new threats that compound old ones by eroding coping mechanisms, functioning markets, access to public services and citizens’ rights. Social violence and drug trafficking drive homicide rates and political corruption, for example. The inability of weak states, and weak justice institutions, to control weapons or penalise violence further heightens these risks. Even what appear to be low levels of violence may be symptomatic of fragility, as in the case of a highly criminalised state (Gastrow, 2011).

Multiple threats often emerge together. Civilians – women, girls and youth in particular – are more at risk than ever. Different forms of violence plague societies at the same time, with actors wielding violence as a tool for power, profit and manipulation. Violence includes terror, which criminals, states and non-state armed groups are increasingly adopting as a tactic.

Unmanaged risks and untreated consequences have dangerous and far-reaching spillover effects. Most refugees and internally displaced persons are living in various regions of Africa. But 2015 and 2016 also witnessed unprecedented numbers of people fleeing violence and persecution in Africa, the Middle East and Central Asia, desperate to get to safety in OECD countries. Population movements not only demonstrate the complex risk landscape in conflict-affected areas, they have also created new dynamics, including deepening fragility, with global political repercussions. In 2016, the refugee and migration crisis became so divisive a political issue throughout Europe that it partly contributed to the decision of the United Kingdom to leave the European Union in the “Brexit” vote. The acts of terrorism that rocked Europe, the Middle East, North America and Africa this year also demonstrate, in the most dramatic terms, the transnational reach of ideologically driven violent extremism. As the World Development Report 2014 succinctly concluded: “unmanaged risks do not respect boundaries, and no one country or agent acting alone can deal effectively with a risk that crosses a national border” (World Bank, 2013). The problem of fragility has global effects.

The complex interaction between fragility and violence requires a shift in the international approach. Understanding that violence has a “contagious” relationship will lead to better informed decisions about development, crisis management, humanitarian aid, conflict and violence prevention and mitigation, and global security. Drivers and impacts of violence – social, interpersonal, criminal, political or violent extremism – overlap. This needs to be acknowledged and reflected in international interventions. Development financing is out of touch with this new reality: interpersonal violence, the leading source of human insecurity, typically falls outside its scope. The primary focus on political conflict, and on the capacity of state institutions, treats only one part of a much larger problem and in consequence, may be doing more harm than good by empowering corrupt elites, deepening inequalities and/or perpetuating marginalisation.

Introducing the OECD fragility framework

It is now widely recognised that fragility is multidimensional and its challenges are universal. Fragility is not only relevant to developing countries; its challenges are universal, as cemented by the post-2015 development framework. The OECD is therefore now committed to a universal, multidimensional fragility framework. This new fragility framework was informed by a broad consultative process that took place over 2015 and 2016.

Fragility is defined as the combination of exposure to risk and insufficient coping capacity of the state, system and/or communities to manage, absorb or mitigate those risks. Fragility can lead to negative outcomes including violence, the breakdown of institutions, displacement, humanitarian crises or other emergencies.

Following on from this, the new OECD fragility framework represents a major shift in how fragility is conceptualised. The OECD characterises fragility as a mix of risk and capacities, over five different dimensions. The OECD’s fragility framework is built on five dimensions (Table 1.1). Each of these dimensions is measured by calculating the accumulation and combination of risks combined with the capacity of the state, system and/or communities to manage, absorb or mitigate the consequences of those risks. The methodology is further defined in Annex A.

Table 1.1. Five dimensions of fragility

Dimension

Description

Economic

Vulnerability to risks stemming from weaknesses in economic foundations and human capital including macroeconomic shocks, unequal growth and high youth unemployment.

Environmental

Vulnerability to environmental, climatic and health risks that affect citizens’ lives and livelihoods. These include exposure to natural disasters, pollution and disease epidemics.

Political

Vulnerability to risks inherent in political processes, events or decisions; lack of political inclusiveness (including of elites); transparency, corruption and society’s ability to accommodate change and avoid oppression.

Security

Vulnerability of overall security to violence and crime, including both political and social violence.

Societal

Vulnerability to risks affecting societal cohesion that stem from both vertical and horizontal inequalities, including inequality among culturally defined or constructed groups and social cleavages.

On the resulting OECD fragility framework diagram (Figure 1.1), contexts are identified as fragile (in light blue) or extremely fragile (in dark blue), on the basis of a synthesis of results in the five dimensions of fragility (economic, environmental, political, security and societal). The ordering of countries provides an indication – rather than a precise measure – of overall fragility.

Figure 1.1. The 2016 OECD fragility framework diagram
picture

 http://dx.doi.org/10.1787/888933441642

Over 1.6 billion people, or 22% of the global population, currently live in these fragile contexts. Population in these fragile contexts is anticipated to increase to 3 billion people, or 32% of the global population, by 2050.

The results of the OECD fragility framework show that fragility occurs across a range of income groups and at differing levels of economic development. Of the 56 fragile contexts, 27 are low income, 25 are lower middle income, and 4 (Angola, the Bolivarian Republic of Venezuela [hereafter “Venezuela”], Iraq and Libya) are upper middle income. Over half of these contexts have authoritarian governance structures, but there are also hybrid regimes and flawed democracies.

Fragility can exacerbate already volatile macroeconomic conditions, which in turn can contribute to increased or sustained fragility, perpetuating a vicious cycle that is hard to break. Fragile contexts experience higher rates of inflation and experience much higher inflation volatility than other contexts. This is particularly apparent in the period from 2002 through 2015.

Fragility intensifies poverty and undermines the opportunities for individuals and societies to escape poverty. Further, in fragile contexts where there is conflict or very high levels of violence, rates of extreme poverty can increase as individuals are displaced, livelihoods are destroyed, and the broader macroeconomic environment is severely damaged through dramatic falls in foreign direct investment (FDI), trade and economic growth. Most fragile contexts have significantly higher proportions of their populations living in extreme poverty, as compared to the rest of the world. While the number of people living in extreme poverty will fall globally, the number of extremely poor people living in these fragile contexts will increase from 480 million in 2015 to 542 million in 2035.

The relationship between fragility and poverty and extreme poverty is further entrenched by a reliance on agriculture in these fragile contexts as a significant means of income generation. The contribution of agriculture to GDP in these extremely fragile and fragile contexts is two to three times higher than in the rest of the world. On average these extremely fragile contexts are becoming more dependent on agriculture, as the proportion of their GDP generated from agricultural activity has increased by 19% since 2004.

The five dimensions of fragility and their relationship with violence

Conclusions can be drawn about the interlinkages between violence, and the different dimensions of fragility.

Economic fragility and violence. Homicide rates and social violence are highest in the group of highly economically fragile contexts. These contexts are typified by high levels of resource and aid dependence and constrained economic geography. There is a clear vicious cycle in the extremely economically fragile group; the absence of long-term drivers of economic growth and individual economic opportunity, coupled with high levels of resource and aid dependence, drive violence and conflict, which in turn reinforces economic fragility: and so the cycle continues.

Environmental fragility and violence. There does not seem to be a distinct relationship between differing levels of environmental fragility and interpersonal violence. However, armed conflict and terrorism are more prevalent in moderate to high environmentally fragile contexts.

Political fragility and violence. Rates of violent death vary across the spectrum of contexts with political fragility. Those with high political fragility have high levels of all types of violence, and are often in conflict or have a recent history of conflict. In terms of particular types of violence, deaths per capita from terrorism are highest in countries that have some legislative constraints on state power but also high levels of political violence. Such countries include Iraq, Mali, Nigeria and Pakistan. This highlights the strong link between political terror and violence by non-state actors using terrorist tactics. Between 1989 and 2014, almost 90% of all terrorist attacks occurred in countries where violent political terror was widespread (Institute for Economics and Peace, 2015).

Security fragility and violence. The extremely fragile contexts in the security dimension include Afghanistan, the Central African Republic, Iraq, Pakistan, Somalia, South Sudan, Sudan, the Syrian Arab Republic (“hereafter Syria”) and Yemen, which are amongst the most violent countries in the world. However, rates of violence are almost as high in the next tier of high security fragile contexts, which tend to have a mix of weak rule of law, criminal activity and terrorist activity. This group includes countries such as Colombia and Nigeria. The spectrum of types of violence that occur in these places, and the overlaps between them, coincides with the link between conflict and crime, known as the conflict-crime nexus. It is also important to note that gender-based violence and gender inequality have been shown to have statistical relationships with security. Gender inequalities are a key manifestation of horizontal inequalities that lead to destabilised societal relations and make societies less resistant to shocks (Baranyi and Powell, 2005).

Societal fragility and violence. Battle-related deaths are higher in contexts in the extreme societal fragility category. These contexts are also typified by high horizontal inequalities and high homicide rates, and some high vertical inequalities as measured by income. Societal factors of gender inequality and gender-based violence (GBV) have been shown to influence overall levels of security. Research has found that contexts with higher levels of gender equality are less likely to initiate interstate conflict or escalate an interstate dispute once involved in one (Hudson et al., 2012). Similarly, higher levels of gender equality are associated with a lower risk of civil conflict within a society (Caprioli, 2005). GBV including intimate partner violence is often a pre-cursor to outbreaks of more endemic conflict. Rape and other forms of GBV are also often used as weapons of war during conflict, thus perpetuating societal instability.

Effective fragility programming requires effective financing

Total financial flows to fragile contexts including official development assistance (ODA), foreign direct investment (FDI) and remittances increased approximately 206% between 2002 and 2014 in constant terms. The total value of financial flows received over this period totalled more than USD 2.04 trillion (2014 constant prices). ODA made up 32% of that total amount.

Remittances are the largest type of financial flow to fragile contexts followed by ODA and then FDI. For the 56 contexts measured as fragile under the OECD fragility framework, remittances are the largest type of financial flow. Of the total aggregate flows to fragile contexts in 2002-14, 43% were remittances. Total ODA excluding debt was 32% of the total financial flows received. FDI accounted for the remaining 25%.

While ODA increased 98% in constant terms in 2002-14, ODA as a proportion of the total flows to fragile contexts actually fell in this period. This reflects the growing importance of FDI and remittances as part of the total financial mix for the fragile contexts.

These fragile contexts received the majority of total ODA, or almost 64% of all ODA between 2011 and 2014, but the distribution of ODA within these fragile contexts is uneven on both an aggregate and per capita basis.

Fragile contexts are more dependent on aid on average, but the extent of aid dependence varies significantly. Of the top 20 most aid-dependent countries in the world, 12 are considered fragile in the OECD fragility framework. However, the extent of aid dependency within the group of fragile contexts is highly unequal, ranging from an average of 41.5% of gross national income (GNI) in lesser developed countries like Liberia to 0.02% in the upper middle income Venezuela. Most highly fragile contexts with above average aid dependency (where net ODA as a percentage of GNI is greater than the average for the group of fragile contexts) have high levels of security fragility.

ODA is not evenly distributed among fragile contexts. The median per capita aid to these fragile contexts for the 2011-14 period was USD 57 per annum and the average was USD 80 per annum in constant 2014 USD prices. Fragile contexts such as the West Bank and Gaza Strip received the largest average ODA on a per capita basis, or USD 576, each year from 2011 to 2014. Venezuela, by comparison, received the smallest amount of ODA per capita during this time period, an average of USD 1.4 each year during the 2011-14 period.

Fragile contexts have higher chances of receiving aid. The analysis of ODA data and fragility profiles of recipient countries shows that the contexts classified as fragile in this report have benefitted from fast-increasing aid flows over the past 15 years, and that they have, on average, higher chances of receiving strong support from donors than other developing countries.

ODA is not always targeted at the real drivers of fragility. The types of fragility that are most frequently correlated with high levels of aid are weaknesses in the long-term drivers of economic growth and environmental vulnerability at household and community level. However, the types of aid that fragile contexts receive typically seek to address the symptoms of these fragilities – i.e. crises and emergencies – rather than their root causes.

Indeed, aid to fragile contexts is often for “firefighting” rather than for long-term structural change. From the standpoint of recipient countries, there are in fact two types of donor allocations: one geared towards long-term development, which focuses on infrastructures, utility sectors, agriculture and industry, as well as health and education; and one that can be characterised as “fire fighting”, which essentially consists in emergency response, food assistance and reconstruction. All too often, fragile contexts receive first and foremost “fire fighting” aid.

Recommendations

The forecast may be gloomy, but unprecedented opportunities have emerged. Global agreementssetinplacein 2015-16 offerrealcauseforoptimism. The Sustainable Development Goals (SDGs) set out in the 2030 Agenda for Sustainable Development emphasise the risks of violence to human security as well as to global peace and security. Understanding the role of violence and fragility is crucial to realisation of the SDGs. SDG 16 in particular aims to course-correct for the evidence that a far greater number of people are exposed to violence than ever before and, as a foundation for all other SDGs, that sustainable development can only thrive where there is security (Box 1.3).

Box 1.3. Sustainable Development Goal 16 and violence

Sustainable Development Goal 16 aims to promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

This is important because high levels of armed violence and insecurity have a destructive impact on a country’s development, affecting economic growth and often resulting in long-standing grievances that can last for generations. Sexual violence, crime, exploitation and torture are also prevalent where there is conflict or no rule of law, and countries must take measures to protect those who are most at risk.

The SDGs aim to significantly reduce all forms of violence, and work with governments and communities to find lasting solutions to conflict and insecurity. Strengthening the rule of law and promoting human rights is key to this process, as is reducing the flow of illicit arms and strengthening the participation of developing countries in the institutions of global governance.

Sources: UN General Assembly (2015); UNDP (2016).

Fragility is a major issue on the global agenda, and the international community is united – most recently in the Stockholm Declaration (IDPS, 2016) – to address it more effectively.

Addressing violence – in all its complexity – is clearly a major part of delivering a better future for those left furthest behind. However, violence reduction is too rarely the primary aim of development co-operation, instead it is often seen as an advantageous by-product of other development programming. Perhaps most significantly, development programmes often treat the symptoms of violence rather than root causes. Breaking these entrenched patterns requires deeper understanding of the complexity of violence, a willingness to embrace measured risk and the courage to try new approaches.

It is impossible to provide an exhaustive list of specific recommendations for all the issues covered in this report. However, it is possible to highlight some areas where the development community can more effectively address fragility and violence. These areas have benefitted from the valuable insights of the International Network on Conflict and Fragility (INCAF) and its members, as well as the wider community of practice.

Policy recommendations include a call to recognise that fragility is multidimensional; address violence in all its forms; challenge existing, simplistic paradigms about violence; invest in prevention; deliver on Stockholm Declaration commitments; and use domestic policy to promote global peace and security.

Recognising that fragility is multidimensional can help practitioners design better theories of change and programming in at-risk contexts. More effective treatment of violence must take into account the interconnected nature of different forms of violence, and their shared root causes. This will involve a shift in development practice – moving from interventions that are focused primarily on conflict and its aftermath, towards interventions that address violence, and its prevention, in all its forms. Adopting a broader definition of violence, one that explicitly avoids attributing labels of “good” and “bad” to populations and places, while also recognising the mutability of roles, actors and circumstances, will help provide a better understanding of, and response to, violence. Investing in prevention saves lives, resources and money. Making good on Stockholm Declaration commitments, and being held to account for progress, will also be an important task for the coming years. And, importantly, domestic policies in donor countries, if enacted with a violence and fragility lens, can make a real difference to the factors of power, marginalisation and capacity that enable violence around the world.

Programming recommendations include moving towards a whole-of-society approach to fragility; putting people at the centre; using the violence lens – capacity, power and margainalisation – to design and deliver programming; prioritising reconciliation; recognising the critical role of gender in addressing fragility; being open to experiment, remain flexible and taking risks; learning; and building the evidence base.

Focusing on a single actor, or a single layer of society, or a single sector, will not be effective in a complex fragile context. Instead, better results will come from working with multiple types of actors, at different layers of society – individual, community, municipal, provincial and national – and taking a multidimensional, multi-sector approach. In this way the capacities of whole societies to respond to a volatile, risky and rapidly evolving context will be strengthened. A focus on violence in all its forms also means shifting towards an approach that puts people at its centre, recognising that a stable state and strong institutions do not automatically lead to a reduction in violence. Instead, focusing on stopping those individuals most likely to engage in violence can be a better strategy, by positively influencing social norms and behaviour change. Reconciliation is a critical part of healing the social cleavages that perpetuate and exacerbate violence, and can therefore help reduce a key driver of fragility. Without addressing these social cleavages the root causes of violence will remain, ready to flare up again at any moment. While gender discriminatory norms can be particularly harmful in fragile contexts, opportunities to shift such norms exist in fragile and post-conflict contexts. One way to help achieve a more cohesive approach would be to develop analytical tools that bring together gender, violence and fragility issues within one framework.

Becoming comfortable with a measure of well-calculated risk, and even programming failure, can have big payoffs. It is also important to find and test innovative approaches to understanding and responding to the drivers of violence, despite the data gaps. Because violence cuts across a broad spectrum of fields and institutions, key data for measuring trends and dynamics tend to remain inside professional silos. This disaggregation means it is difficult to ascertain the complex ways in which violence drives and contributes to fragility.

Financing recommendations include the need to provide adequate, long-term ODA financing for fragile contexts; to focus funding on the real drivers of fragility; and to develop better financing strategies for fragile contexts.

States of Fragility 2016 shows that ODA remains a stable flow to fragile contexts that complements private sector investment, often highly volatile and concentrated in only a few fragile contexts, and remittances, which are difficult to channel to specific development programmes because they are flows to friends and families. However, the report also demonstrates that in many cases ODA supports immediate or short-term remedies rather than measures that require a longer time frame. This is as true for development ODA as it is for humanitarian aid. If ODA is to be most useful, it will need to be sufficiently predictable, flexible and long term; enabling multi-annual responses that address the underlying drivers of fragility – across all its dimensions. Strategic patience is required for sustainable results in fragile contexts.

Development actors will also need to gain a broader understanding of the development financing landscape for fragile contexts, and address the gaps in their financing toolbox. They will also need to better prioritise, quantify, sequence and layer different types of financial tools, and develop more coherent and forward-looking financing strategies for fragile contexts. The OECD will continue to work to promote a better understanding of financial tools and portfolio management in fragile contexts in 2017-18.

Conclusion

Patterns and manifestations of violence globally offer a new path for policy makers. This report traces the current findings in violence and fragility globally. It also reflects on the manner in which aid is provided to states and societies affected by fragility, and how aid could be reformulated to better advance development, prevent crises and build resilience. In the process it may offer a fresh perspective on the role played by violence, which is often coupled with protracted political crises and underdevelopment, in causing fragility. It also may help find ways to support and bolster local forms of resilience and manage risks differently.

Violence and fragility wreak destruction on human lives and societies, preventing people from fully achieving their potential. Violence obstructs development, stalls recovery from conflict, compounds the risks of fragility and feeds devastating new cycles of violence. Indeed, this fragile world could become more so in an exponential way, given that it will likely face more stresses from climate change, fragile cities, and the regionalisation of violence and conflict. Getting it wrong will not just leave the unsatisfactory status quo in place. It could well make matters worse. This opportunity to alleviate the toll of violence and fragility must not be missed.

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