Avoid a Fall or Fly Again: Turning Points of State Fragility

High persistence of state fragility (a trap) suggests the presence substantial benefits from avoiding a fall into and considerable hurdles to successful exit fragility. This paper empirically examines factors that affect turning points entering exiting by employing three different approaches: an event study, synthetic control method, logit model. We find economic contraction is critical prevent country on brink falling (e.g., among near fragile countries, probability would rise 40 percentage should real GDP per capita growth decline +2.5 percent -2.5 percent). Also, strengthening government effectiveness together with increasing political inclusion maintaining robust activity help make more sustainable. In current environment (the COVID-19 crisis its aftermath), findings suggest importance providing well-directed fiscal stimulus sufficient financing, (subject appropriate governance safeguards well-designed policies), protecting socio-economic spending keep vulnerable countries away being caught in trap.