The World Bank's Independent Evaluation Group says the number of countries at risk of collapsing due to conflict, poor governance or poverty has increased, threatening global security. The group says aid has not been well planned or coordinated, and donor nations must focus more on long-term development.
The report by the World Bank's Independent Evaluation Group says the number of countries at risk of collapsing has risen from 17 in 2003 to 26 this year. It says these "fragile states" are home to almost 500 million people, half of whom live in poverty.
The report notes that failed states are often havens for terrorists, drug production and weapons smuggling.
It says that while governance has improved in such countries as Angola and Tajikistan, the global situation is getting worse, and could pose a threat to regional and even global security.
Soniya Carvalho, an evaluation officer for the World Bank group and the main author of the report, says it is crucial that such countries receive proper support.
"Internally, these countries have huge problems of poverty, but externally, these countries can have huge damaging spillover, negative effects on their neighbors in terms of terrorism, epidemics, etc. And, therefore, I think in this globalized world, these countries cannot be ignored," she said.
The 26 states listed in the report include Afghanistan, Haiti, Somalia and Sudan. The report says eight of the 26 are severely low-income nations, and also suffered from conflicts in the last year.
The World Bank lent $4.1 billion between 2003 and 2005 to countries the bank identifies as fragile states - 67 percent more than it did during the previous three years.
Carvalho says donor countries are more willing to help fragile states meet the U.N.'s Millenium Development Goals of halving poverty by 2015. But she adds donors have not planned or coordinated their efforts well.
She says donors have helped countries with immediate recovery from conflicts, but more attention should be paid to long-term development, including education, agriculture and health care.
She also says donors have to focus on the most pressing problems first.
"Donors need to prioritize their programs, be very selective, sequence their reforms," she said. "It's true that in these countries virtually everything needs fixing. But that doesn't mean that donors can jump in and try to do everything at all once."
As an example, the report cites Afghanistan, where donor nations' differing agendas have resulted in 120 new pieces of legislation being introduced - many of which will probably not be adopted, due to the country's low level of development.
Carvalho says another problem is an imbalance in the distribution of aid money. Governments often base their donations on political considerations rather than on the actual needs of the recipient countries. The result, she says, is that some countries receive much more aid than they need, while others do not receive enough.