© Foreign and Commonwealth Office



I'm currently reading through Ashraf Ghani's and Clare Lockhart's book "Fixing Failed States: A Framework for Rebuilding a Fractured World". Ashraf Ghani was Afghanistan's finance minister for some time. However the book is not really a revelation - a lot of (deserved) criticism for the worlds aid programs and organizations but little clear, easy to follow guidelines or a frame work how to build a state correctly. Sure enough a state should not be corrupt and the rule of law must be established. But the question is how to get there quickly.

What occurred to me why is there so little emphasis on running a state (given it's small) like a corporation. Such an approach has worked for Singapore especially. A good and responsible corporation would focus on maximizing profits while maintaining a social balance AND enabling the biggest amount of freedom possible. Each 'shareholder' can contribute directly to the bigger sum, so his investment grows in value if the state/company is doing well and is profitable and grows.

Shareholders could decide about dividends and how the company/state should invest. Also the company should be financed by yearly capital increases. The majority should decide which percentage of income is the 'capital increase' of that year and each citizen/shareholder should contribute. If he/she does not his ownership is being diluted.

Also the company/state can decide about in/-outsourcing so that the company can give put services that not strengthen it's usps. Also the company is reviewing it's success by its own revenue (not just taxes/ capital increases) but comparative advantages of its subsidiaries (i.e. private enterprises) and ranking in FDI inflows.

I agree this is an early stage concept but I see this could be worked out. There are some very interesting analogies and it might help to streamline the strange incentives and non-growth oriented decisions many countries undertake. Not every place can adopt it but a reasonable small place with a fitting geography could be a great candidate.

What do you think?