Somalia is still the most failed failed state on the planet. So says a recent failed state list from The Fund for Peace and Foreign Policy Magazine. Over the last decade, it's become popular for think tanks and intelligence agencies to compile lists of "failed states." This is what unstable countries, prone to rebellion and civil disorder, are called these days. What they all have in common is a lack of "civil society" (rule of, and respect for, law), and lots of corruption. The two sort of go together.
The best example of a failed state has long been Somalia, and that's largely because the concept of the "nation of Somalia" is a very recent development (the 1960s). It never caught on. Same could be said for the Palestinians. Sudan is accused of being a failed state, but it isn't in the same league with Somalia. Sudan has had central government of sorts, on and off, for thousands of years. Not so Somalia.
Another common problem in failed states is a large number of ethnic groups. This is a common curse throughout Africa, which why the majority of the worst failed states are there. Europe, and much of Asia, have managed to get past this tribalism, although that has not always resulted in a civil society (usually the result of a functioning democracy). This tribalism has kept most African nations from making a lot of economic progress. The top five failed states are all African (Somalia, Chad, Sudan, Zimbabwe and Congo). Somalia is also unique in that it is one of those rare African nations that is not ethnically diverse. Instead, Somalia suffers from tribal animosities and severe warlordism.
There's a similar problem in the Middle East. For example, two current hot spots, Iraq and Afghanistan, have long been torn apart by tribal and religious animosities. Same with the Balkans and parts of India and Pakistan. Perhaps the most glaring example of a failed state caused by too much diversity is Papua New Guinea, on the eastern portion of the island of New Guinea (north of Australia). Papua New Guinea has over 800 languages (and even more tribes.) It has been in chaos, of one form or another, since becoming a nation 35 years ago.
No one has come up with a quick, or easy, solution for failed states. It's all a matter of effective local leadership, and that frequently fails to show up. There has been some success in helping good leaders develop, by assisting with installing a democracy. But just letting the people vote often leads to, what looked like a good guy, turning into a dictatorial "president for life." Haiti has, for two centuries, trying to develop a civil society, and for over a century has been using democracy in that effort. Has not worked, and prospects are bleak.
One exemplary leader can make a difference. Examples abound. Kemal Ataturk, more than any of his close followers and advisors, turned Turkey from a medieval monarchy, into a functioning democracy. India also have a handful of strong leaders early on who achieved what many believed impossible, and created the world's largest (over a billion people) democracy. Neither Turkey nor India are as efficient and prosperous as many older democracies. But compared to many of their neighbors, Turkey and India are beacons of hope in an otherwise dreary political landscape. Alas, they are the exception, not the rule, and this sorry state of affairs will continue for the foreseeable future.