Africa has seven of the top 10 spots, and half of the 60 weakest states.
Somalia, which has held the worst position for three years in a row, has not had an effective government since 1991. It is wracked by bloody fighting between anti-government groups and the army in large parts of the country and pirates are operating off the coast.
Also listed is Zimbabwe, which moved down two ratings from last year, to number four, after a power sharing agreement was reached between the party of Robert Mugabe, the president, and Morgan Tsvangirai, the opposition leader who was named prime minister.
Some increased stability
Asia is home to 30 per cent of the top 60 weakest states and the Middle East has just over 10 per cent.
The least and most stable countries in the world:
5. DR Congo
Afghanistan and Iraq, both with tens of thousands of US-led deployed troops, come in places six and seven respectively.
Yemen, meanwhile, saw increased instability in the last year while Sri Lanka received a better ranking this year.
Cynthia Pegrigh, the director of Policy at Conciliation Resources in London, told Al Jazeera that the index provides very informative analyses.
"However, the problem with these kind of rankings, is that it draws attention to the top 10 failed states, as they are called," she said.
"If you take the example of Yemen, for decades, it has not been on the top 10 on these lists and media interest.
"Now, because of last year's event, everybody is looking at the situation in Yemen," she said, referring to the failed Christmas Day bombing of a jet en route to Detroit, where the alleged culprit apparently had ties to al-Qaeda in Yemen.
"What we say is that you should look at the complexities of all these countries in the long-term, not only when a crisis arises."
Three Nordic nations - Norway, Finland and Sweden - are ranked as the most stable countries.
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