Introduction: Economic Recovery Strategies: Economic Recovery Strategies & Peacebuilding Processes
After years or even decades of war, the economies of conflict-ridden societies are invariably seriously weakened and their institutional and physical infrastructures are damaged and in desperate need of repair,1 if not destroyed to the very foundations. Further complicating the post-conflict environment is the likelihood that the state is extremely weakened, lacks organization and capacity, and does not have the funds to establish recovery activities without international aid.2 Post-crisis governments also often inherit huge budgetary deficits, overvalued exchanged rates, and a low tax base, which are challenges to early economic recovery and to rebuilding the state more generally.
As the United Nations Development Programme (UNDP) underscores, in such settings, despite the "ostensible end of conflict, insecurity and violence obstruct the launch of reconstruction efforts, resumption of basic services (such as electricity, water, and gas) the re-establishment of government authority and administrative services at the local level, as well as private and international investment."3 For this reason, military expenditure often continues to be high,4 which can undermine economic recovery efforts. Violent conflict can also leave behind a "distorted system of asset acquisition and resource use . . . [that] bequeaths to the post conflict period a pathological system of incentives and a highly disabling environment for legitimate private sector investment."5 Such tendencies indicate that some economically benefit in conflict, as the war economies literature has aptly evidenced, and that some national economies may even grow in conflict.
Go to Private Sector and The Relationship between Development and Conflict
Notably, every post-conflict situation is unique, and each setting has its own vulnerabilities associated with its conflict history. For these reasons, traditional economic assumptions about economic behavior do not uncritically lend themselves to easy application in such contexts.
In particular, economic costs are not the same for all conflict-affected states. There are factors that contribute to the severity and depth of the negative economic effects of war. Citing a 1997 survey, Gilles Carbonnier points out that war costs appear to be more severe in cases of geographically pervasive conflicts, where the government has lost its capacity to collect taxes and provide basic services. Where "quasi-government structures" were able to maintain core functions, meanwhile, these costs are likely to be more limited. In addition, international wars tend to have less harmful effects than internal conflicts because the state usually strives to maintain basic social services throughout the country as part of its war effort.6 The different types of economic costs within different post-conflict settings clearly have implications for the type of economic recovery that should take shape.
In sum, given the challenges and particularities of post-conflict settings, scholars and practitioners are pointing to the need to revisit economic recovery strategies in post-conflict settings in an effort to ensure they do not undermine peace.
[Back to Top] 7 A leading peacebuilding non-governmental organization (NGO), International Alert, recognizes that "one of the major elements of strategic peacebuilding is a strong and equitable socio-economic foundation."8 UNDP's Bureau for Crisis Prevention and Recovery argue that economic recovery is a core component of the overall transition to peace, and that "humanitarian, livelihoods, human rights, and governance issues must be addressed simultaneously, even as the country struggles to lay the foundation for a well functioning economy."9
The challenges come in defining what type of economic recovery facilitates peacebuilding most effectively. Thus, in addition to understanding the type of economy that war leaves behind, it follows that there is a need to understand the type of economy that will potentially transform the structures and dynamics that fed conflict, and work to sustain peace. This section touches on these topics, while aspects of the liberal economic model and peacebuilding are considered in more detail in the debates section. Finally, economic recovery and peacebuilding are considered through each of the consecutive sub-sections on economic recovery that follow in the portal. Go to Peacebuilding and Liberalization
The goalUnderstanding of the goal of economic recovery within the context of peacebuilding is served by a deeper knowledge of the differences between negative and positive peace, which suggest different goals and strategies for economic recovery. With negative peace, a decisive victory of one warlord over all others will likely "ensure that little may be done to help the majority to recover, and a narrow elite may reap most of the benefits."10 The distribution of benefits is unlikely to be equitable, decreasing the likelihood that peace will be consolidated. Broad-based recovery, as defined by Tony Addison, for example,ismore in line with a positive peace orientation. It is composed of holistic conceptions of reconstruction and reform,11 and would alternatively result in an improvement in the incomes and human development indicators of the majority of people, especially the poor.12 At the same time, broad-based recovery can be undermined when there are incentives for peace spoilers.13
Go to About Peacebuilding and Definitions
Similarly, the more holistic concepts of human development and human security offer ways to think about critical security, governance, and development linkages that respond to the characteristics of a post-conflict setting. These concepts suggest paradigmatic approaches and strategic visions of peace and development, with economic recovery strategies that respond to a vision of what peace and development encompass.
Understanding and addressing economic sources and drivers of conflictAt the heart of peacebuilding lies the challenge of addressing the sources and drivers of conflict. These are often economic in nature, which has obvious and important implications for the design and implementation of economic recovery strategies.
The debates surrounding the economic drivers and sources of conflict is expansive and the issues are complex. Rarely is conflict due to one cause, something most scholars have come to accept, refuting monocausal explanations such as that put forth by Paul Collier and Anke Hoeffler. The examination of the economics to conflict relationship therefore features in varying ways and degrees throughout the economic recovery section of the portal. In particular, the popular "greed versus grievance" debate catalyzed by the Collier and Hoeffler theory surrounding economic motives in war14 are discussed at length, alongside the wider "war economies" literature in the thematic sub-section on natural resources and peacebuilding This section focuses on the role of poverty and inequality, which are often at the center of local grievances.
Poverty and inequality
Rebuilding a healthy economy--one that sustains peace-- requires understanding the economic sources and drivers of war and the linkages among poverty, inequality, and conflict and peace. While it seems to be plausible and even generally accepted that poverty and inequality breed conflict--that poverty can create the desperation that fuels conflict, as UNDP and various scholars have argued and proven--the precise nature of the causal linkages is unclear.15 As Ravi Kranbur writes in an International Peace Academy study, "Although it is by and large and, on the average, true, in a statistical sense, that violent conflict is a feature of poorer rather than richer societies, wealth can provide the means to conflict as much as take away the reason for it, and the balance of forces is delicate and country specific."16
While it is widely accepted that growth promotes poverty reduction, growth also often creates inequality, which increases poverty. Specifically, when inequality is held constant and growth happens, poverty falls. At the same time, holding the mean of the distribution constant, when inequality increases, poverty increases. The challenge then, as Kanbur articulates, is to achieve growth without the inequality increase, or to achieve inequality reduction without a reduction in growth, or both growth and inequality reduction, which would reduce poverty.17
Although the relationship between standard measures of interpersonal inequality and conflict is weak and not well established, theory and evidence support clear findings of intergroup conflict and inequality,18 or horizontal inequality. As Kanbur states, "Grievances typically start to ferment when one or more socio-economic group (defined by ethnicity, region, religion, or some combination of these characteristics) experiences a fall in its standard of living in either absolute terms, or relative to another group." Grievance, he argues, is often "the product of policies that favour a narrow minority, typically widening inequality in incomes and access to basic services."19
Economic growth is frequently prescribed as the primary solution for both conflict and development. However, the causal linkages for both of these links have been deeply questioned over the years, following the implementation of structural adjustment programs in Africa and Latin America in the 1980s and 1990s, in particular, which across the board did not produce the intended results of higher growth and lower poverty. As Kanbur states, "If poverty is seen as a key determinant of conflict, rapid economic growth naturally follows as a key policy recommendation. However, if the processes of economic growth create group inequalities, leaving identified groups behind relative to the advance of other groups, this can actually engender conflict sufficient to negatively affect the growth process itself."20
Economic and development policy
Economic policy, in particular, is both a driver of conflict and a cornerstone of peacebuilding and conflict prevention. As Sakiko Fukuda-Parr and colleagues have observed, "Development policy can either alleviate or worsen group grievance, the youth bulge and unemployment, environmental pressure and poor governance of natural resources; it can then help reduce or exacerbate the risks of armed conflict recurring."21 Krishna Kumar has underscored the role of macroeconomic stability as the most important element of any economic rehabilitation endeavor: "Almost all recent postconflict governments had followed flawed economic policies prior to wars; the situation worsened during the conflict, further compounding the problems of underdevelopment and widespread poverty. Macroeconomic stability is essential not only to facilitate economic recovery but also to lay the foundation for sustainable economic growth."22 Go to Activities
Scholars respond to the issue of peacebuilding addressing economic sources of conflict in a variety of ways, but an increasingly supported notion is that economic policies must be people- and human-centered and that processes and outcomes of consultations should be "country owned," as illustrated through the Poverty Reduction Strategy processes now required in post-conflict contexts (and everywhere where international financial institution loans are offered). Tony Addison's notion that economic recovery be "broad based" reinforces this notion, which would require "changing those economic policies which favour only a narrow elite (and which also harm the poor)."23 Such a broad-based recovery would thereby increase chances of a peace deal holding.24 Economic and development policies that arguably facilitate peacebuilding are discussed in greater detail in the debates section.
Go to Definitions: Economic Recovery
Development Enterprise and Conflict
Peter Uvin has written about the development enterprise and its understanding of conflict and related approaches to addressing the relationship of conflict and development: The development enterprise spent the first three decades of its charmed life in total agnosticism towards matters of conflict and insecurity. When violent conflict occurred it was treated as an unfortunate occurrence, forcing development workers out and humanitarians inan order to be reversed when the conflict was over and conditions were safe for normal development work to resume. In this context, development workers did not consider that their actions and work might contribute to conflict factors. Now, he argues, the nexus between development and peace is commonly recognized. This is due in part to the end of the Cold War, the visibility of violence and conflict, and the liberal peace model, which all opened the door to much wider interventions in the internal dynamics of low-power countries.
Source: Uvin, Peter. The Development/Peacebuilding Nexus: A Typology and History of Changing Paradigms. Journal of Peacebuilding and Development 1, no. 1 (2002): 2.
Peace agreements and early economic recovery prioritiesEconomic recovery commitments need to occur early on, in peace agreements. The importance of this builds on the growing recognition that traditional approaches to war termination over the last several decades have undermined the sustainability of peace agreements, directing more attention to addressing the sources of conflict.25 UNDP has underscored the aperture presented with peace settlements, as well as the immense vulnerability, given that half of all countries emerging from conflict relapse into violence within five years: "Breaking the cycle requires decisive action to seize the opportunities that peace creates by providing security, rebuilding institutions and supporting social and economic recovery."26
Astri Suhrke, Torunn Wimpelmann, and Marcia Dawes have examined economic provisions in peace agreements, finding that those related to reconstruction of physical infrastructure and education have increased over time but remained general in content.27 In addition, provisions related to macroeconomic policies, financial, business, investment, and labor regulatory frameworks, and regional wealth allocations significantly increased over time, but in "less specific form."28 Longer-term foundations for sustainable peace, however, such as public administration and economic recovery, are inconsistently incorporated. Ultimately, the authors argue that the importance of including these foundations depends heavily on their relevance to the causes of the conflict and the preconditions for peace, and that effective implementation requires domestic consensus or political will.29 Conversely, Susan Woodward points to economic revival as necessary to implementing a peace agreement and to building confidence in the peace process and the government, as well as building social capital for a successful transition and collective action.30
Finally, emphasis must be placed, from the beginning, on building national capacities to initiate and sustain economic recovery. In its new report on post-conflict economic recovery, UNDP elevates the issue of "enabling local ingenuity" and strengthening "indigenous drivers of conflict" to the forefront of efforts needed to develop economic recovery strategies that will sustain peace.31
Directions of research and scholarshipWhile it is hard to imagine how peace can be sustained without improvements in peoples live's and how development can take place without peace, Sakiko Fukuda-Parr and Erin McCandless underscore that security, peacebuilding, and development "have been generally pursued as separate policy goals, and each is driven by its own set of actors, institutions, and tools, they are inter-related."32 In a similar vein, the United Nations Department of Social and Economic Affairs (DESA) observes that despite the enormous human and economic costs of war in the developing world, "the contributions of economists to research in this area are still surprisingly sparse and limited, even if commitment to remedying this has been increasing." Acknowledging that economic research on war-torn countries runs into particular methodological difficulties, DESA nevertheless underscores that substantial effort and innovative approaches are required to cope more effectively with the challenges of socio-economic rebuilding.33
Go to Debates
Scholar Gilles Carbonnier has neatly identified aims of recent endeavors by scholars and the international community to understand and address issues at the heart of economic recovery and peacebuilding. They include efforts to:
1950s-1960sDuring the period following the Second World War, the post-war stabilization and reconstruction model was the dominant strategy for post-conflict reconstruction. Macroeconomic stability was prioritized as the first post-conflict economic activity. These strategies were also focused on large-scale reconstruction and economic rehabilitation programs that were thought to spur economic growth. The 1947 Marshall Plan is the best-known example of the reconstruction strategy of this era.
1970sDuring the 1970s, the natural disaster model prevailed in post-conflict situations. This model prioritizes rapid deployment and meeting immediate humanitarian needs. The World Bank's development strategies are still rooted in this model.
1980sAfter decades of no involvement in post-conflict economic recovery and reconstruction, the Bretton Woods Institutions began to emerge as major actors in post-conflict economic recovery and peacebuilding. During this period, international assistance to post-conflict countries focused on liberalization policies and technical assistance. Structural adjustement programs (SAPs) are also attached to controversial aid conditionalities and debt "forgiveness" packages. As discussed in the debates section, many critics of SAPs argue that these programs have had negative political and social costs, which may have increased conflict vulnerability and threatened peace and recovery in post-conflict countries.
Structural adjustment programs (1980s-90s)
1990s-PresentSince the 1990s, with the fall of the Berlin Wall and the advent of the "monopolar" world, alongside the growing dominance of SAPs from the 1980s and beyond, post-conflict economic recovery and peacebuilding have been ruled by the assumption that liberalization is the solution to durable peace. By the mid-1990s, the post-conflict agenda also rose to the international stage, and, by the end of the century, this agenda expanded to the idea of conflict prevention and early warning. The principle of "do no harm" also rose to prominence to guide humanitarian and development action in the 1990s. In the last decade, the notion of conflict sensitivity has gained prominence, premised on the need to understand the interactions of policy interventions with the historical, social, and political-economy contexts of conflict and to (re)shape policies and programming with this in mind. Simultaneously, the concept of human security, which builds on the concepts of human needs and human development, emerged as a way of capturing the nexus between conflict and development.
The present decade has seen increasing attention paid to the relief to development gap and more calls for longer-term thinking and broad-based recovery. The concept of "early recovery" is presently an important topic of focus given the persistent "gaps" in programming and financing of longer-term processes of peacebuilding and development.
Poverty reduction strategies
2. Ohiorhenuan and Kumar, "Sustaining Post-conflict Economic Recovery," 4.
3. Ibid., 3.
4. Kumar, 25.
5. Ohiorhenuan and Kumar, "Sustaining Post-conflict Economic Recovery," 3.
6. Gilles Carbonnier, Conflict, Postwar Rebuilding and the Economy: A Critical Review of the Literature (Geneva: Interpeace, March 1998), 16.
7. See, for example, PBSO, "Measuring Peace Consolidation," 17; United Nations, "Economic Recovery Called Primary Element in Peace-building as DPI/NGO Conference Continues," press release (September 10, 2002).
8. International Alert, "Economy and Peace."
9. Ohiorhenuan and Kumar, "Sustaining Post-conflict Economic Recovery," 15.
10. Addison, From Conflict to Recovery in Africa,3.
11. Ibid., 15.
12. Ibid., 3.
14. Paul Collier, Anke Hoeffler, and Nicholas Sambanis, "The Collier-Hoeffler Model of Civil War Onset and the Case Study Project Research Design," in Understanding Civil War, ed. Paul Collier and Nicholas Sambanis (Washington, DC: World Bank Publications, 2005), 6.
15. United Nations Development Programme (UNDP), "Violent Conflict," in Human Development Report 2005 (New York: UNDP, 2005), 152-55; Ravi Kanbur, Poverty and Conflict: The Inequality Link (New York: International Peace Institute, June 2007), 2; Sakiko Fukuda-Parr and Robert Picciotto, "Conflict Prevention and Development Co-operation in Africa: A Policy Workshop,"concept paper (May 2007).
16. Kanbur, Poverty and Conflict: The Inequality Link, 2.
17. Ibid., 2.
18. Ibid., 2.
19. Addison, From Conflict to Recovery in Africa, 4.
20. Kanbur, Poverty and Conflict: The Inequality Link, 2.
21. Sakiko Fukuda-Parr, Maximillian Ashwill, Elizabeth Chiappa, and Carol Messineo, "The Conflict-Development Nexus: A Survey of Armed Conflicts in Sub-Saharan Africa 1980-2005," Journal of Peacebuilding and Development 4, no. 1 (forthcoming): 11.
22. Kumar, Rebuilding Societies after Civil War, 30.
23. Addison, From Conflict to Recovery in Africa, 4.
24. Ibid., 4.
25. Erin McCandless, Economic Aspects of Reconstruction, Recovery and Peace, in Peace, Conflict and Development Reader, ed. Erin McCandless and Tony Karbo (Addis Ababa: University for Peace, 2009).
26. UNDP, "Violent Conflict," 175.
27. Suhrke et al., Peace Processes and Statebuilding, 24.
28. Ibid., 24.
29. Ibid., 59.
30. Susan Woodward, "Economic Priorities for Successful Peace Implementation," in Ending Civil Wars: The Implementation of Peace Agreements, ed. Stephen John Stedman, Donald Rothchild, and Elizabeth Cousens(Boulder, CO: Lynne Rienner, 2002), 185.
31. BCPR, Post-Conflict Economic Recovery: Enabling Local Ingenuity.
32. Fukuda-Parr and McCandless, "An Integrated Framework for Peacebuilding," 193.
33. Carbonnier, Conflict, Postwar Rebuilding and the Economy, executive summary.
34. Ibid., 8.
35. United Nations High Commissioner for Refugees (UNHCR), Policy Framework and Implementation Strategy: UNHCRs Role in Support of the Return and Reintegration of Displaced Populations (Geneva: UNHCR, February 18, 2008), 4.
36. United Nations High Commissioner for Refugees (UNHCR), "Return and Reintegration," in The State of the Worlds Refugees: A Humanitarian Agenda (Geneva: UNHCR, 1997), 4.1.
37. Robert J. Muscat, "Reviving Agriculture in the Aftermath of Violent Conflict: A Review of Experience," Journal of Peacebuilding and Development 2, no. 2 (forthcoming): 84.
38. Ahmed Rafeeuddin, Manfred Kulessa, and Khalid Malik, eds., Lessons Learned in Crises and Post-Conflict Situations: The Role of UNDP in Reintegration and Reconstruction Programmes (New York: United Nations Development Programme, 2002), 115.
39. Addison, From Conflict to Recovery in Africa, 256.
40. Boyce and ODonnell, "Peace and the Public Purse," 7.
41. Compiled with a variety of sources, drawing heavily on Erin McCandless, "Synopses of Major Concepts," in Peace Research for Africa: Critical Essays on Methodology, edited by Erin McCandless, Abdul Karim Bangura, Mary E. King, and Ebrima Sall. Addis Ababa: University for Peace, 2007, 104-05; Roland Paris, At Wars End: Building Peace After Civil Conflict, Cambridge: Cambridge University Press, 2004; Peter Uvin, "The Development/Peacebuilding Nexus: A Typology and History of Changing Paradigms," Journal of Peacebuilding and Development 1, no. 1 (2002).