Macroeconomic Challenges of Fragility and Policies for Stability and Growth by Alexei Miksjuk, Paul M Bisca, Jocelyn Boussard, John-Paul Fanning, Romina Kazandjian, Yipei Zhang, Lavinia Zhao, Thomas Augsten, Gaëlle Pierre, Björn Rother, Guillaume Chabert published by IMF (2026).
“Fragility poses significant economic and policy challenges and has costly global spillovers. Given its complex political, social, economic, and security roots and ramifications, there is no universally agreed upon definition of fragility. However, it typically involves a mix of low state capacity to deliver public services, weak governance and corruption, social tensions, widespread poverty and inequality, significant exposure to shocks, and, overall, a broken social contract between the state and its citizens. These factors constrain how economies operate, creating higher uncertainty, entrenching distortions, impeding development, and often intensifying the trade-offs between policy objectives. The World Bank and the IMF currently classify 38 economies as fragile and conflict–affected states (FCS), most of which are low-income countries (LICs).1 That said, fragility and conflicts are not confined to these economies. Indeed, the impact of fragility and conflicts on macroeconomic outcomes can be observed in many countries around the world. Propagation channels include insecurity, refugee flows, and disruptions in trade. Fragility thus deserves continued attention from policymakers, as peace and stability are a global public good…”
