This Working Paper reviews various strands of literature on development assistance in fragile states, with the aim of identifying research streams supporting initiatives on aid effectiveness. The first part reviews the evolution of policy concerns with fragile states and introduces the objectives and dilemmas of major aid effectiveness instruments. The second part charts various research streams on fragile states, including the various definitions and rankings of state fragility, historical perspectives on state formation, functionalist approaches to governance in developing countries, case study contributions, and finally sub-state governance arrangements as alternatives to ‘the state’. The third part distils options for future research and emphasises the policy opportunities deriving from the notion of ‘bottom-up’ statebuilding.