The interaction of failed states, terrorism and the need for nation building is at the top of the international agenda, with particular focus on Afghanistan and Iraq. This path breaking collection brings together top analysts to examine the goals and challenges facing efforts to reconstruct states that have collapsed into anarchy or have been defeated in war. Drawing on lessons from 50 years of past experience with post-conflict reconstruction and development around the world, the authors provide historical context, identify difficulties that can impede progress and recognize the realistic limitations of ambitions to create new states. They assess ongoing development plans in a country devastated by more than a century of conflict. Throughout, particular attention is paid to the interaction of the goals of external and domestic actors, highlighting the importance of understanding the internal social, economic and political environment of the society receiving assistance.