A failed state is a state that is thought to be failing the basic conditions of a state like loss of control of it's territory, being unable to provide public services for it's people, unable to interact with other countries. Another characteristic of a failed state is a government that has so little control it doesn't affect the people. Some ways that they are formed is deterioration of government or government control, starting to have a dictatorial rule or dictatorship to try and control the country.
The failed states of 2012 are Somalia, Chad, Sudan, Democratic Republic of the Congo, Haiti, Zimbabwe, Central African Republic, Iraq, Cote d'lvoire, Guinea, Pakistan, Yemen, Nigeria, Niger, Kenya, Burundi, Guinea-Bissau, Myanmar, Ethiopia.
Sources:
Wikipedia
National Geographic
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