FAILED STATES AND SHARED SOVEREIGNTY

STEPHEN D. KRASNER

I. Introduction

In many countries, conventional sovereignty has miscarried. Their societies are troubled
because they suffer under failed, weak, or abusive national authority structures. The
challenges posed by troubled societies cannot be adequately addressed if the conventional
rules of sovereignty are honored. Alternative institutional arrangements must be
supported if the lives of individuals are to improve and the threats which such countries
pose to others are to be mitigated.

II. The Problem

Sovereignty, the idea that political life should be organized according to mutually
recognized territorial entities, each with its own independent and autonomous authority
structure, is a relatively recent historical development which emerged in Europe over the
last several hundred years. It has now displaced all other forms of recognized political
authority such as empires or the tributary state system of the traditional Sino-centric
world. Over the last half century sovereignty has worked well in many places: national
authorities in sovereign states have created decent and secure lives for most citizens. But
in some countries it has failed miserably. Individuals live in an environment which, if it
is not quite an Hobbesian states of nature, is something akin to a racketeering operation in
which those holding formal offices of state, or at least those with guns, create insecurities
and uncertainties that allow them to collect blood and treasure from their own people.

In some countries authority structures have collapsed entirely or, if they formally exist,
are empty shells. Services, such as health and education, are woefully inadequate.
Human rights are ignored. Infrastructure has deteriorated. Corruption is rampant.
Borders are unregulated. The national currency has been displaced by dollars or some
other internationally recognized means of exchange. GNP is declining. Life expectancy
is falling. Basic human rights are trampled. Crime is widespread. Armed groups operate
within the state’s boundaries, but outside the control of the government. Poverty is
endemic.

The challenges posed by failed, failing, and abusive states cannot be adequately
addressed within the confines of the conventional rules of sovereignty. At the
international level, conventional sovereignty is defined by two basic concepts and their
accompanying prescription or rule:
• International legal sovereignty: recognize juridically independent territorial
entities which then have the right to freely decide which agreements or treaties
they will enter into; and
 • Westphalian or more appropriately Vatellian sovereignty: do not intervene in the
internal affairs of other states. (Though the principle of non intervention is
traditionally associated with the Peace of Westphalia of 1648, the doctrine was
not explicitly articulated until a century later by the Swiss jurist Emmerich de
Vattel in his The Law of Nations Or Principles of the Law of Nature Applied to
the Conduct and Affairs of Nations and Sovereigns, originally published in French
in 1758.)

These prescriptions governing relations between states assume that within states there
exists a third element of sovereignty, effective domestic sovereignty. Effective domestic
sovereignty implies that there is an independent authority structure within a recognized
territory capable of effectively regulating activities within its own borders. Ideally such
an authority structure would ensure a decent society where human rights are protected,
the rule of law is honored, and officials are accountable to citizens.

Failed, failing, and abusive states almost always enjoy international legal sovereignty.
Some have Westphalian/Vatellian sovereignty as well. But they do not have decent or
effective domestic sovereignty.

The current menu of policy instruments for dealing with failed, failing, and abusive states
is too limited, consisting primarily of transitional administration and foreign assistance to
improve governance, both of which assume that in more or less short order targeted states
can function effectively on their own. The record of transitional administration is, at
best, mixed. Transitional administration can work in situations where the interests of
indigenous actors are in line with those of the international community, where both
parties have an interest in establishing effective and just domestic governance structures.
In many cases, however, local political leaders conclude that they are better able to secure
their own position by appealing to anti-democratic constituencies if only because they are
betting that transitional administration really will be transitional and their best chance for
staying in power is to shore up their parochial (ethnic, nationalist) base of support.

Governance assistance has had only limited results even though it has been high on the
agenda of both individual donor countries and multilateral institutions for the last decade.
In failed states there is no government to assist. Abusive states which violate the human
rights of their own citizens will not be interested in governance assistance. And even in
failing or poorly functioning states, the impact of governance assistance has been modest.
The leverage of external actors, which is based on funding in exchange for reform, is
usually not great. Leaders in recipient countries will not follow through on reforms that
would undermine their domestic support. Donor countries will not make all assistance
contingent on governance reforms because they will not deny funds for humanitarian
purposes or foreclose aid to promote their own strategic interests even where governance
is grotesquely bad. International financial institutions cannot eliminate funding to
poorly functioning states or they would go out of business.

III. Possible Solutions

To adequately address the problem of failed, failing, and abusive states the menu of
policy options must be expanded beyond transitional administration and governance
assistance. One obvious measure would be to re-create some kind of trusteeship system
in which an external entity (a state, an international organization, a regional organization)
would take responsibility for a failed state. The failed state would lose its international
legal sovereignty and Westphalian/Vatellian sovereignty but would secure a better level
of domestic governance. Unlike transitional administration, the assumption would be
that a trusteeship would last for an extended and indefinite period of time. Rule of law,
respect for human rights, protection for civil society, adequate property rights, an
independent judiciary, a competent bureaucracy would all have to be established before
international legal and Westphalian/Vatellian sovereignty were restored.

Reclaiming trusteeship as a recognized international form will, however, encounter

serious opposition. Leaders in weak poorly functioning states will not want to put their
status, position, and prestige at risk by formally accepting the contingency of not only
Westphalian/Vatellian but also international legal sovereignty. And leaders in more
powerful states will not be anxious to find themselves in a position where they might be
asked to accept the financial, administrative, even security responsibilities of acting as a
trustee, burdens that would almost certainly have little appeal to their own domestic
constituents.

A more promising option would be to develop shared sovereignty or, less provocatively,
partnerships that would create domestic institutions in which authority would be shared
between external and internal actors. Such arrangements would be legitimated by treaties
between the national government and external partners and thus would not pose a frontal
challenge to conventional sovereignty. International legal sovereignty would be used to
compromise Westphalian/Vatellian sovereignty. (This has, in fact, been exactly what has
happened in the European Union where supranational authority and qualified majority
voting have, in fact, gutted the Westphalian/Vatellian sovereignty of member states.)

There are three obvious areas where partnerships could be productive: natural resources,
justice, and monetary affairs. For developing countries natural resources, especially oil,
have been a curse. They concentrate wealth and power in the hands of the central
government, frustrate democracy, impede economic growth, and foster corruption. All
poorer natural resource exporting countries should consider establishing a Resource
Trust whose board of trustees would be made up of both national and international
representatives (such as officials appointed by the World Bank, the IMF, the UNDP,
and/or NGOs).
The trust would be responsible for the following activities:
• awarding contracts for natural resource development;
• controlling an escrow account in an international bank into which all resource
revenues would be paid; and
• monitoring disbursement from the account to make sure revenues were used as
intended by national authorities, ideally for social welfare programs.
Officials in some governments will, of course, resist such an initiative since it would limit
their ability to fill Swiss bank accounts or buy tanks. Given, however, the need for
foreign capital to develop most natural resources, the presence of large corporations
whose activities could be regulated by their home governments, the advantages to such
corporations of better governance in host countries, and the desperate need of some
developing countries for external finance, resource trusts are an institutional innovation
that could be accepted. Such innovations will, however, require support from
international organizations and major states lest they be emasculated as happened in the
case of the Chad Cameroon pipeline where the final arrangements were much less
ambitious than initial World Bank proposals.

National judicial systems are a second area where partnerships could be developed. The
most obvious innovation would be to legitimate the participation of international judges
in national courts. This has already been done in Kosovo and Timor as part of
transitional administration. In Hong Kong judges from Commonwealth countries have
sat on the Court of Final Appeal, one of several steps taken by China to reassure the
business community when British dominance ended. The idea though would be for
international jurists to become a permanent feature of the national judicial system rather
than just a temporary expedient. This could not only improve the administration of
justice but also change the career incentives of national judges by providing greater links
with the international legal community.
Finally, partnership arrangements could be organized for monetary authorities in poorly
governed states. The temptation to print money to increase short term political support or
to feather the nests of political leaders is everywhere high. Many industrialized
countries have addressed this problem by creating central banks that are independent of
national political authorities, the European Central Bank for the European Monetary
Union, the Federal Reserve for the United States. In developing countries both
autonomy and technical expertise are hard to come by. Appointing international officials
as members of governing boards would make it more difficult for national officials to
control monetary affairs for political purposes and would enhance expertise.

IV. The Role of the UN

The United Nations could contribute to broadening the policy options for addressing the
problems of failed, failing, and abusive states in two ways: legitimation and partnering.
Legitimation would be most important for any effort to revive some form of trusteeship.
Such a revival would require naming and explicitly recognizing a new institutional form
(conservatorship might be better term than trusteeship) and formally establishing an
international governance structure for a previously sovereign state. This would be a
radical measure more likely to be accepted if it were legitimated by an international
body. While the General Assembly and the Security Council are not the only bodies that
might legitimate such a change (regional organizations could be another), they would be
the most obvious.

Partnering should be a more important goal for the UN system in moving toward
measures that can improve governance in poorly functioning states. The UN agencies,
especially the functional agencies would be an obvious source of personnel for shared
sovereignty arrangements. The IMF could appoint representatives to central banks; the
IBRD could appoint trustees to resource trusts; the WHO could provide officials to
specifically designated positions within ministries of health; UNESCO might appoint
officials to education ministries. The UN and its functional organizations would not be
the only source of partners but they would be a recognized and legitimate one.
More ambitiously, the UN might even consider developing a cadre of officials who
would be responsible for state building. These individuals would fill the partnership
positions that had been agreed to with national governments. The incentives for these
individuals, their own career prospects, would have to be tied to their performance in
these roles.

V. Conclusion

The traditional premise of international law is that states in the international system are
analogous to individuals in well functioning liberal polities; each is entitled to
fundamental equality and a basic set of rights. This assumption must be abandoned.
States where effective domestic governance has collapsed, or become ineffective or
brutalized, should not be accorded the same rights and privileges as those enjoyed by
well functioning polities. The Westphalian/Vatellian sovereignty of these entities should
not be respected. Restoring decent governance to these states will require expanding the
repertoire of policy options to include shared sovereignty or partnerships and possibly
trusteeships in which even the international legal sovereignty of these entities would be
withdrawn.