A Leading expert on "fragile states" has said that donors acted hastily in suspending aid to Rwanda over allegations that it is supporting a rebel insurgency in the neighbouring Democratic Republic of the Congo, a UK-based newspaper reported yesterday.

Professor James Putzel, co-author of 'Meeting the Challenges of Crisis States', a new report from the London School of Economics, told The Guardian that he questioned the decision of the EU, the US and Germany to partially freeze aid to Rwanda amid accusations that its military was supporting the rebel group, M23. Kigali has rejected the allegations.

Britain, after initially freezing £16m of general budget support to the country in July, unblocked half that amount last month after acknowledging that Kigali was "constructively" engaging in efforts to resolve the crisis.

"Donors have been precipitous in suspending aid," Putzel told The Guardian.

"The evidence is much more mixed and it's complicated. Of course there are some ethnic and family links across the border, but generally the Rwandan government has been judicious in staying its hand".

On urban regulation, the report by the London School of Economics (LSE) cites Rwanda as a role model, where in the aftermath of the 1994 Genocide against the Tutsi, proactive physical planning and investment in infrastructure was accompanied by the mobilisation of people working in the informal sector into cooperative associations.

"While the government's approach to post-conflict urban governance has been controversial, it has served to transform Kigali from a city scarred by devastating violence and disorder into one characterised by orderly urbanisation and low levels of crime".

"...Rwanda clearly developed a remarkable level of discipline and focus - attributes that have been essential to its success in cultivating peace and order in Kigali, and to positioning the city as the spearhead of national economic and political recovery."

It adds that in both Rwanda and Tanzania, traditional mining played only a minor role in the economy.

"However, both countries have now embarked on new strategies to develop their mineral resources, though with decidedly different prospects," he said.

"The Rwanda Geology and Mines Authority (OGMR) provides specific administrative and regulatory support for expansion of the sector, bringing together all government departments involved," it said.

The report also acknowledges that Rwandan government has established a number of agencies to work with the private sector along the lines of its development strategy

The EU, the world's largest aid donor, last year said it placed far greater focus on democracy, human rights and governance in its aid programmes under its new "agenda for change" development policy.

However, the LSE report cautions against too formulaic approach towards democratic rules, formal state institutions and elections.

"If democratic rules are likely to lead to significant exclusion of either powerful elites or important regional, ethnic, language or religious groups, then they may be inferior to forms of power sharing," says the report.

The report warns that donor attempts to promote democratic or market reforms can lead to violence.

"The promotion of democracy in a country needs to focus on establishing mechanisms for checks and balances on executive authority rather than the form of political party competition," said the report, which looks at why some fragile states - understood as countries particularly vulnerable to outbreaks of large-scale violence - slide into collapse while others manage to achieve periods of "resilience".

Another uncomfortable message for aid agencies is that the failure to prioritise security in state building threatens to undermine aid efforts.