This article deals with the growing policymaking interest in the condition of ‘failed states’ and the calls for increased intervention as a means of coping with international terrorism. It starts by highlighting the inordinate attention initially granted to the threat posed by ‘rogue states’ to the neglect of ‘failed states’. Generally, it is argued that the prevalence of such notions has to be related to a persistence of Cold War discourse on statehood that revolves around binary oppositions of ‘failed’ versus ‘successful’ states. Specifically, the purveyors of this discourse are practitioners who focus on the supposed symptoms of state failure (international terrorism) rather than the conditions that permit such failure to occur. Here, an alternative approach to ‘state failure’ is advocated that is more cognisant of the realms of political economy and security constraining and enabling developing states and appreciative of different processes of state formation and modes of social organisation.