The link between a weak, economically under-developed state and propensity to conflict makes state-building important in both post-conflict reconstruction and conflict prevention. In the aftermath of war, external development assistance to reconstruct a country's infrastructure, institutions and economy is often a key part of the peace accords, and is vital to ensure that the country can develop to prevent it sliding back into conflict.

Reconstruction of property and infrastucture is one of the most immediate requirements. This will facilitate return of the displaced to their homes, security, governance and control, transport of food and supplies, and production and commerce to begin rebuilding the economy. The transition to normal security conditions, with an adequate police force, is vital, and a functioning judiciary is needed to enforce the rule of law. Governance has to be reestablished, and government services must begin to function again. Democratization, demobilization of ex-combatants, landmine clearance, protection of public security, return of the displaced, provision of healthcare and education, and poverty reduction, are all key aims. In the long-term, a stable macroeconomic environment will promote political stability, and will facilitate a solid financial base for government. Furthermore, it will make possible legitimate and transparent government revenue-collecting and expenditure capabilities, strengthening democracy and lowering the propensity for violent conflict.

External Assistance

The structural factors contributing to conflict include "political, economic and social inequalities; extreme poverty; economic stagnation; poor government services; high unemployment; environmental degradation; and individual (economic) incentives to fight." Thus economic under-development may not in itself be the cause of conflict; factors such as inequality and private economic incentives also play a part. Development assistance has as one of its main aims the alleviation of these important structural causes of conflict, with policies that "promote inclusive development; reduce inequalities between groups; tackle unemployment; and, via national and international control over illicit trade, reduce incentives to fight."

Perhaps the most important principle of development assistance is the use of Aid Conditionality as a source of leverage to promote economic and political practices that strengthen peacebuilding. Thus, not only is provision of aid dependent on all sides signing peace accords, but ongoing development assistance is made conditional on continued commitment to implementing and consolidating the peace.

Local capacity is key to ensuring that, once the donors leave, the country will have durable governance and economic structures that can function independently of aid. Inequalities between groups must be alleviated, particularly groups with a history of conflict. Inclusive government must be secured, as well as a healthy economy in which groups and individuals stand to gain more by participating within the normal economy than outside it. in countries where conflict revolves around allocation of significant natural resources - such as diamonds in Sierra Leone or Angola - efforts should also concentrate on means with which to take these resources out of the hands of warlords and profiteering elites and make them benefit the country as a whole.

Challenges and Problems
Many of the challenges associated with Humanitarian Aid apply equally to external development assistance. There are also some issues that apply exclusively or differently to development assistance. Most problems relate to the way that the provision of development assistance is structured, although conceptual problems, i.e. how to best help countries develop, also apply.

Development Assistance Can Encourage Conflict
While development assistance rarely acts as a structural feature or a trigger of conflict, it can support both of these causal factors when it is administered without taking into consideration the social and political context in which it operates. Even if aid claims to be "apolitical" it takes a great deal of care and thought to make it politically or ethnically neutral.

Problems arise primarily due to tensions between the approaches taken by the main donor agencies and the needs of post-conflict and conflict-prone societies. In the past development assistance has been given by agencies whose sole mandate is to promote economic growth and development "without regard to political or other non-economic influences or considerations" (World Bank Charter, Article III Section 5). Policies and measures promoted by international financial institutions (IFIs) are aimed at improving overall macroeconomic stability and economic growth irrespective of potential income distribution effects. As all peace settlements are based on a balance of power between warring sides, any measure that disproportionately benefits or hurts one side can cause them to reassess their position, with potentially catastrophic consequences for the peace. Alternatively, well-targeted aid can strengthen forces that are conducive to peace, reinforcing the mutually enticing opportunities that make peace more beneficial than a return to war.

In addition, the policy recommendations of the IFIs are based on an almost dogmatically neoclassical economic ideology that does not take into account the specific needs of post-conflict or deeply-divided societies. Policies such as liberalization of trade barriers, and reduction of state intervention in the economy, may cause short-term hardships such as increased unemployment, and through their distributive effects can exacerbate cleavages between groups. When political stability is already fragile this inflexibility is inappropriate. Cutting government services to reduce budget deficits can weaken the 'social contract' and the ties between citizen and government. In a divided society aid administered through government will favor those in power, while channeling aid in a way that bypasses central government can decrease a government's leverage, also causing problems.

James Boyce discusses ways in which IFIs should modify their fiscal policy recommendations to bolster peacebuilding and reconstruction efforts, rather than concentrating simply on reducing government budget deficits. This could include influencing domestic spending priorities, and promoting more equitable fiscal policies to alleviate inequalities between conflicting groups. Such an approach would require a more intrusive and 'political' role than the IFIs have taken traditionally. As Boyce writes, to concentrate solely on increasing the size of the economic pie, without considering how that pie is divided, is an approach "singularly ill-suited to war-torn societies."
It has been suggested that IMF reform measures in the former Yugoslavia helped to reinforce group dynamics that were leading to conflict, compounding cleavages between these groups. Robert Muscat illustrates how in Sri Lanka a USAID project that assisted only one ethnicity may have helped to fuel conflict there, and also points to Rwanda, which before the genocide was seen as one of the most successful recipients of aid. Here all aid resources flowed through the central government, and aid was therefore a factors in the institutional discrimination against Tutsis. The World bank later acknowledged that it had been aware of the growing discrimination against Tutsis, but had always attempted to take an apolitical stance towards provision of aid. With hindsight such a stance can seem naive and even irresponsible.

Criticisms of Donor Institutions

The problems described above can be traced in part to the institutional cultures and organizational dynamics of donor agencies, and their deficiencies in dealing with post-conflict or deeply-divided societies. With IFIs success is often measured in terms of the amount of money disbursed, rather than the outcome of programs. This distorts incentives for the agencies on the institutional and on an individual staff level. Furthermore, it is not enough to measure the net benefits for the recipient country. In a deeply divided society the benefits that accrue to each side, and the subsequent effect on the balance of power between them, must be carefully calculated. As we have seen, IFIs carry strong ideological biases, and it is these, rather than the need to reduce social tensions and political instability, that inform policies. Lack of inter-donor coordination can also hinder efforts, making aid conditionality, for example, difficult to impose effectively.

Little by little the MDBs are reforming to take into account lessons learned. Departments focusing on conflict-affected countries are being formed, such as that at the World Bank, to try and deal with these issues. Increasingly agencies take into account potential for conflict when designing their program and moderate them accordingly. Increasingly there are calls for projects to undergo conflict or ethno-national impact assessments, in addition to the usual cost-benefit analysis. For example, privatization must be dealt with extremely carefully in countries with poor ethnic distribution. Another important measure is to involve the IFIs more closely in the peace negotiations in order to strengthen their understanding of the appropriate measures for dealing with post-conflict aid recipients, to bridge the traditional gap between peacebuilding and economic reconstruction, and to improve overall coordination of post-conflict development.

Bilateral development assistance also carries problems. Donor governments inevitably have competing multiple interests, peace-building being only one of them. Geopolitical concerns were paramount during the Cold War, leading to US support of the Khmer Rouge regime in Cambodia, in the 1980s, or to the French backing of the Francophone Hutu regime prior to the 1994 Rwandan genocide. There are also important economic and commercial interests at stake, with roughly half of all bilateral aid 'tied' to imports of goods and services from the donor country. The need to take into account geopolitical, economic, and commercial interests, added to the role of public opinion, makes calculation of peacebuilding potential only one of multiple concerns for bilateral donors when calculating policy. Additionally, donor countries can, in turn, strongly influence the policies of multilateral development institutions, exacerbating the effect.

Inadequate funding mechanisms: Most donors award funding on a year by year basis. This makes forward planning very difficult for agencies. It also means that each year's budget has to be used up before the next year's funding can be obtained. This pressure to disburse funds in a very limited time may mean that there is not sufficient time to assess what projects would be most beneficial. As a result projects may not be well planned or thought out, leading to wastage of funds and/or adverse political consequences. Additionally, the international community tends to take a fairly short-tern view of post-conflict reconstruction - whereas in reality it can take many years for processes like reconciliation or refugee returns to occur.

In Bosnia, many observers were disappointed by the initially slow rate of refugee returns in the years immediately following the Dayton Peace Accords (DPA), particularly given that assistance was available for people to return. In fact, returns have peaked seven years after DPA, as political tensions recede and people feel 'ready' to return. At the same time, unfortunately, assistance for refugee returns is disappearing, due to the short-term outlook of the international community regarding post-conflict reconstruction and development.

Difficulties with Conditionality of Aid

Conditionality has proven very effective in coercing parties to follow through with implementation of peace accords and consolidation of the peace. A notable example was securing the arrest of indicted war criminals for the International Criminal Tribunal for the former Yugoslavia by withholding aid from Croatia and Serbia. However, there are significant difficulties faced in trying to design and enforce aid conditionality. Donors must be coordinated to prevent them undermining each other; alternative sources of revenue that might weaken leverage, such as access to lucrative natural resources, must be cut off; the potential cost to the more vulnerable members of society must be considered, and if necessary alleviated, through the use of 'smart sanctions' with humanitarian exemptions. Careful use of carrots and sticks can involve, as James Boyce writes, slicing the carrot - providing aid in installments in order to maintain leverage.

Donor agencies can be reluctant to impose political (as opposed to economic) conditionalities on aid. This is inappropriate in a post-conflict environment or in a country with potential for conflict, where inequalities between groups have fuelled conflict, and where the government cannot be relied upon to ensure equitable distribution to all minority groups. Furthermore, not imposing conditionalities is not neutral, as it sends signals about what is acceptable, and impacts on local politics.

Efficiency and Effectiveness of Development Assistance

Interference with local capacities to deal with problems: Both humanitarian aid and development assistance are often implemented without considering the way in which they affect local capacity to deal with problems. This can make recipient countries dependent on aid, as well as encouraging development techniques that are unsustainable without a huge influx of external resources. In addition, the most educated and capable of the local population tend to gain employment with IOs and NGOs that pay the best salaries in a distorted conflict economy of a poorly-performing post-conflict economy. They often work as drivers, translators or administrative staff. As well as wasting valuable human capital and expertise, this leeches expertise from local initiatives to govern and develop, "imposing foreign values and suffocating local initiative" (Guest). If local NGOs are encourages, this often takes the form of monetary grants. This encourages initiatives that wil use such money and thus be unsustainable when foreign aid dries up. NGOs will focus their resources on winning such grants, and instead of working together as allies may become locked in competition against each other. What civil society initiatives really need, it has been mooted, is inexpensive but long-term commitment - something far removed from the international community's relatively short-term approach to post-conflict development.

A Bosnian employee of an agency working in Montenegro noted that aid agencies' attempts to nurture civil society in the Balkans often seemed to ignore the fact that there had been some civil society before the conflict. All civil society initiatives now came with a foreign name that was rarely translated into the local language. Rather than building on local experience of civil society, this reinforced the idea that civil society was something new and foreign, and achievable only by Western-style NGOs producing professional grant proposals that would satisfy the foreign donor - rather than creating a strong civic base.

Following the crisis in Kosovo and NATO's successful bombing campaign, the international community instituted an interim government in Kosovo, called UNMIK (United Nations Mission in Kosovo). The purpose of this mission was to set up government institutions and rebuild the country, at a cost of almost $500 million in its first year alone. Ironically, such a mission may be damaging Kosovo's civil society development. It enforces an externally-led government that makes most use of Kosovo educated elites as drivers, translators and secretaries. The case of Kosovo is particularly striking because in the decade preceding the crisis Kosovar Albanians had effectively set up their own institutions of government outside official Yugoslav institutions, in a 'parallel society'. The expertise that was developed during this time was not adequately built upon by UNMIK.

Institution Building

There is universal agreement that a state needs strong institutions, but some issues on how to create and strengthen these institutions remain unresolved. For a comprehensive discussion we have adopted a wide definition of institution building, which entails structural reform as well as capacity building and mere strengthening of existing institutions.

Institution building is the creation of governance capacities. It entails the dismantling and reformation of old organizations and institutions-- legal, administrative, economic as well as social-- the improvement of efficiency and effectiveness of existing institutions, the restoration of destroyed institutions and the enhancement of authorities' professionalism.

In most cases institutional foundations of crisis countries were already weak before and deteriorate during crisis. They suffer from widespread inefficiency and lack of transparency. Furthermore, conflict countries generally experience a sharp fall in the level of education. Hence in the aftermath of conflict, the problems of governance are aggravated even further by the general shortage of trained and educated personnel due to killing and emigration as well as lack of education.

Given corruption and state collapse, many donors channel their aid through NGOs, seeking to provide services usually administered by state structures, such as education and health. War tribunals and emerging "international norms and values" further inadvertently supplant the state, reducing the capacity of the state to impose its will. Therefore, a major implication for the reconstruction phase is to (re)build state institutions, which can provide the rule of law and basic services for the war-exhausted society.

It becomes important to build local decision-making and administrative capacity as quickly as possible, because this is a major bottleneck for the distribution of foreign aid. However, decentralization and strengthening of local authorities should only be undertaken in tandem with revitalization of the center. Otherwise, there is a potential threat that local authorities with a strong interest in secession emerge and might rip the state asunder before its reconstruction has even started.

Clear Answers
To take care of its population a state needs strong institutions. The executive, the legislative and the judicial branch have to be restored to maintain law and order and so that the state can provide fundamental services to its citizens.

  • Public Sector Reform: The costs of maintaining an effective administration usually takes up the largest part of the national budget. All post-conflict governments face tight budget constraints, on the one hand because civil war is costly and destroys the potential tax base of the economy and on the other hand due to tight macroeconomic policies imposed by development agencies, which assist the country in its economic recovery. Smart downsizing is one strategy to improve cost effectiveness of public administration. However, attention must be paid to the security problem that an increase in unemployment also increases the number of potential recruits for warlords.
  • Decentralization: Rapid downsizing of administrative institutions can lead to the destabilization of society if there is lack of economic alternatives for laid off public officials. Through decentralization people learn how to govern themselves. The establishment of local institutions, which provide for participatory decision making mechanisms, potentially encourage the population to actively engage in local politics and to restore the local economy. However, local institutions and civil society organizations have to be monitored to avoid discrimination of local agents against former adversaries, and to guarantee an equitable distribution of transfers and tax proceeds.
  • Rule of Law: The creation of transparent legislative and judicial institutions is important for reconciliation and to establish trust in the post-conflict government. Extreme conflicts often lead to deliberate destruction of legal infrastructure and the judiciary. Furthermore, post-conflict societies sometimes suffer from the complete absence of at least minimally trained lawyers and judges. International experts can assist in the restoration of the legal framework, by providing their expertise through legislative assistance in drafting laws and by training legislators, lawyers and judges. At the same time, independence and accountability of the justice system has to be promoted. The administration of justice must be based on rule of law and human rights to establish the trust of the society in these newly restored institutions.
  • Law Enforcement: The involvement of law enforcement agencies-– military and police-– in the conflict poses a major challenge to reform and institutional strengthening. International agencies have to be very careful in addressing police reform to avoid the danger of strengthening potentially regressive capabilities and to irreversibly undermine the credibility of police forces. To break with the past, the former structure of law enforcement agencies has to be completely overhauled. Political neutrality of police forces has to be established. Accountability of police officers has to be introduced, monitored and enforced.
  • Economic Institutions: Legal reform plays an important role in reviving the financial framework and economic institutions, such as property rights, banking laws, and tax laws. At the same time, politically sensitive public administration reform is an essential ingredient of economic rehabilitation. Transparent administrative institutions which are free from corruption increase economic activity by creating a stable environment for national and foreign investors.
  • Corruption: Transparency of institutional mechanisms is one way to prevent or at least diminish the level of corruption in the public administration. Strict separation of powers addresses corruption at the political level. The constitution should provide for mutual independence of the legislative, the executive and the judiciary. At the same time, authority to review the respective other branches should be constitutionally conferred to each body.

Unresolved Problems

  • Corruption and Decentralization: Experience indicates that no clear statement can be made whether building of central rather than local institutional capacities increases effectiveness and responsiveness while decreasing corruption and inefficiency.
  • International Donors: International donor assistance is urgently needed to provide post-conflict governments with sufficient resources for institutional reform and rehabilitation of the economic infrastructure. Absence of international donors increases the threat of political instability. But there are two major issues concerning external assistance. Firstly, their programs for institutional capacity building involve high costs, but at the same time they are only of limited relevance due to lack of knowledge and understanding of the local political and social landscape by highly paid external experts. The second problem of international assistance concerns the occasional aggravation of labor shortages in the national public institutions, because skilled employees take up better-paid jobs in international agencies.
  • Institutions and Democratization: The majority of case studies in post-conflict and transition countries indicate that pressure for early elections can threaten the future of democracy. If elections are held before basic institutions are in place, their results can backfire on the future credibility of the still weak state institutions. Early elections might prevent addressing the fundamental institutional foundations for recovery and stability, in particular in societies with large disparities in the sizes of ethnic groups. On the other hand, it is hard not to give in to the argument that only by holding early elections can credible institutions and a legitimate government, which carries the leverage of the popular vote, be established. There is no clear answer to what should come first, institutions or elections. Democratic tradition and history of government institutions of each individual country case have to be evaluated.


Although democratization can be thought of as an integral part of institution building, because of its importance within the process it deserves an independent section. This decision acknowledges both the extensive literature on democratization as a separable element of institution building, as well as the important implications it has for conflict management. The design of political institutions is a key factor to reconcile deeply divided societies. Empirical studies indicate that democracy, rather than oligarchy or authoritarianism, is more conducive to reconciliation.

The challenge of democratization is to establish political institutions that allow for: accountability, meaningful competition for political power; participation in the selection of leaders and policies; and a level of civil and political liberties to ensure competition and participation. An inclusive and sustainable democratic system might not only avert relapse into violent intrastate conflict, but might also improve "democratic peace" amongst states. However, until democracy is consolidated, state and society pass through a volatile and fragile transformation phase, in which small incidents have the ability to reverse the democratization process.

For the purpose of post-conflict Peacebuilding it is paramount that democratization is embedded within a comprehensive process of institution building which addresses all levels of society. Otherwise, if democratic institutions are hastily "transplanted" to post-conflict societies without taking root, this might lead to subsequent resumption of hostilities.

Democratic Systems

The choice of an appropriate democratic system is paramount for the achievement of an equitable and sustainable state system. The structure of democracy should be carefully engineered to fit the specifics of the society that adopts it. Power-sharing or majoritarian democracy? Parliamentary or presidential governance?

Power-sharing versus Majoritarian Democracy

Power-sharing political systems are often a better choice to prevent the relapse into violent conflict in societies that are divided along identity lines. In power-sharing democracies all major identity groups are represented in the government. Ideally, the constitution will provide for decision making rules that are based on consensus, to ensure cooperation of all groups in policy making.

In a majoritarian democratic system the winner takes all; the loser will have to wait for the next chance to assume government power. The implementation of policies is easier, because the majority rules, but the successful political group may/should develop a spoils system. It will have to accommodate the demands of the opposition as long as the latter is strong enough to be a formidable opponent in future elections. Otherwise, if the political challenger represents only a minority, there is a substantial threat of "tyranny of the majority".

According to the circumstances of each single case, variations of these two forms of democratic governance might be more suitable models. For example, in countries where the difference in the relative size of different ethnic groups is large, a majoritarian system that includes extensive guarantees to the minority can be appropriate.

Parliamentary versus Presidential Democracy

The democratic system has to be supported by an appropriate constitutional framework. In a parliamentary regime a system of mutual dependence between the executive and legislative branches is devised. Executive power must be supported by a majority in the legislature who can subject it with a vote of non-confidence; at the same time the executive branch has the capacity to dissolve the legislature and call for elections.

A pure presidential regime in a democracy is a system of mutual independence. The legislative and the chief executive have fixed electoral mandates, from which they derive their own legitimacy. They are not accountable to each other.

Those two regimes have both advantages and disadvantages in addressing the needs of reconstructing the state and reconciling society after a violent conflict. Parliamentarism facilitates the inclusion of all groups within the legislature and the executive. It introduces accountability on the part of the government towards the people's representatives. At the same time, it often lacks the ability of efficient policy making of the presidential system and has propensity towards a weak and fragmented government.

Idealistically in a presidential system, the chief executive acts as a unifying national figure and moderates diverging interests of rival political groupings. However, this mandate, and the powers which are conferred to him, can have an adverse effect if the president is captured by one political or ethnic group. No real checks on the executive are integrated into the system.

Semi-presidentialism is a hybrid of the two regimes, in which a parliamentary system and a prime minister, with some executive powers, is combined with a president, who also has executive powers. This system combines the advantages of both systems, but also shows a propensity for deadlock between and within the executive arms of government.

All systems have advantages and disadvantages and no suggestion for the ideal system can be made. However, there are trends that should be considered for post-conflict democratization. Compromise, negotiation, moderation and inclusion are keys to democratic stability. The size of the competing groups as well as the way in which offices are elected influence the functionality of the systems. Therefore, a careful choice of the system has to be made.


Evidence from elections held in divided societies shows that an appropriate electoral system can foster accommodative tendencies. On the other hand, the implementation of inappropriate systems can severely harm the process of democratization.

An electoral system is one of the most important mechanisms in shaping political participation, because it translates votes in a general election into seats in the legislature. The electoral system influences the size and number of parties represented in the legislative bodies. With the same number of votes, one system might lead to coalition governments and the other to a single party assuming majority control. The electoral system is closely linked to the design of the democratic system.

Three major choices are particularly suited for divided societies:

  • List proportional representation – system in which the party's share of national votes is reflected in its share of parliamentary seats. Parties present their lists of candidates and voters vote for the party rather than for a candidate.
  • Single transferable vote – voters can express their preference between candidates, who are directly elected if they fulfill a quota of first preference votes.
  • Explicit recognition of the representation of communal groups – ethnic representation in the parliament is fixed according to ratio of different ethnic groups in the country.

Countries emerging from conflict may need to restructure their electoral administration to restore credibility and legitimacy of the election process. Elections must be administered successfully at the first time. The electoral commission has to be impartial and transparent. Voter registration has to be fair and accessible, each eligible voter has to be provided with the opportunity to make his political choice.

A Three-Level Approach

Support from all three levels of Lederdach's society is necessary for successful democratization:

Political elites have to understand the perils of political fragmentation. They have to have the ability to accommodate divergent interests. Most importantly, they must have the will to establish democracy and they must be willing to accept limits to their political power.

On the middle-level, the creation and institutionalization of political parties that represent all groups of the population are necessary to support a pluralistic democracy. Opinion leaders and NGOs have to be educated and informed. Appropriate laws and institutions have to be created; electoral laws, electoral commissions, democratization of institutions, etc.

Civil education, on the grass-root level, prepares the population for democracy through democratization of local institutions and teaching of tolerance and the ability to balance different opinions through cooperation and compromise. In the context of a post-conflict situation, humanitarian concerns such as deep partisanship and trauma will also have to be addressed. Furthermore, it should provide individuals with the capacity to identify demagogues and the threat that emanates from them.

Threats to the Process

Transition to a consolidated democratic system is a long and delicate process. Democratizing countries are often subject to coups or relapse into authoritarianism. This occurs, in particular, in states where the economy and social structures have been disrupted by the conflict and the new government's policies do not lead to immediate reconstruction. The population becomes impatient and hopes for better results through strong leadership.

If parties in a conflict have fought for control of the government, democratization may be understood merely as a continuation of that struggle. This tendency is exacerbated if a country with no prior experience of democracy adopts a system that does not properly address the original grievances.

Democratization, understood as merely holding elections, can aggravate social and political differences that contributed to the violent conflict. Often, ethnic, religious or regional as well as kinship loyalties are exploited for votes. Elections do not necessarily transform a society's political structure and culture, but can aggravate existing tensions.

When minority rights are not observed in deeply divided societies, the possibility that conflict resurges is imminent. An appropriate democratic system has to be established to prevent "tyranny of the majority."

Economic Development

Economic development is important not only for preventing conflicts, but also in post-conflict settings. Collier and Hoeffler found that the higher the level of per capita income, the lower the risk of conflict. Hence, economic development is paramount for the prevention of future conflict and for post-conflict societies to avoid relapse into violence.

Civil war is common in low-income countries, and deteriorates the already dismal state of the economy of these countries even further. Thus, the transition periods following conflicts are unstable, not only from the socio-political point of view, but also in economic terms. Yet economic stability is an important feature in securing long-term political stability and reconciliation. It is paramount for the constitution of a legitimate government that is equipped with sufficient financial flexibility to restore infrastructure and to create a social safety network.

The transition period from violent conflict to peace is characterized by an unnatural demographic distribution of the population. Large numbers of refugees and displaced people often cluster in parts of the country where the land does not provide sufficient nutrition, and they are left with nothing to do. This can lead to relapse into conflict as former combatants or refugees revert to violence to secure their basic needs.

When peace is finally established the country and its economy are exposed to an often large influx of people, who had fled across the borders during periods of violence. This influx further aggravates the social and economic tensions.

Economic Peacebuilding has to target the micro- and macro-level. Basic needs of the population have to be met. Economic opportunities have to be created to employ the large amount of idle labor. On the macroeconomic level, the post-conflict government should be assisted in its efforts to secure the economic foundations for viable transition to peace.

Economic recovery can only be achieved in the long-term. It is a complex process, during which strategies have to be harmonized in ways such that they do not contradict each other or undermine efforts in different areas of post-conflict Peacebuilding.

Economic Risk Factors
Certain economic realities can potentially lead to recurrence of violence and relapse into conflict if not taken into consideration.

  • Lack of Opportunities: Conflicts have severe destructive effects on a country's economy, leading to a contraction of economic opportunities. Young men and former combatants are particularly vulnerable under these conditions. Left without anything to do, they are at risk to return to their former employers-– army, warlords, rebel leaders-– in search for employment. In some cases these men are recruited as security forces for former warlords, who seized large properties or power over natural resources. In other cases they are recruited by rebel leaders, who are dissatisfied with the peace-agreement and try to destabilize the new government through land raids and terrorist acts.
  • Food Scarcity: In situations where conflicts led to a break down of food distribution sentiments of hopelessness caused by lack of economic opportunities are further aggravated. Refugees are often stranded in overcrowded camps. Access to arable land might be restricted for members of ethnicities or population groups that have been driven out of their homelands. Again, those affected by these circumstances are vulnerable to recruitment efforts by warlords or rebel leaders, who can promise food and shelter or the recapturing of native soil in return for military services.
  • Landmines: In many cases landmines further restrict access to arable land, due to extensive use of landmines during conflicts. Landmines are a hindrance not only to timely resumption of agricultural production but also to transportation of goods, as demining of roads and fields becomes necessary. Demining is an expensive and cumbersome process that uses up large amounts of post-conflict reconstruction assistance.
  • Natural Resources: Countries dependent on natural resources are often more conflict prone. In post-conflict situations the redistribution of control over natural resources can become the cornerstone for economic recovery. According to Collier rebel activity and political rebellion can be caused by natural resource rents. Any settlement remains unstable as long as the fight over resources is more profitable than peace. For rebel groups, like the Columbian guerilla, extraction of resources not only provides means for rebel activity but also constitutes the objective thereof. Rents are used to pay for arms and soldiers to protect the production sites. Political leaders in resource-rich regions are more likely to mobilize the population for secession than leaders of poorer regions which are dependent on transfers from the central government authorities.
  • Aid: Foreign aid, while necessary, is at the same time a potential risk factor in the absence of appropriate institutions that guarantee the distribution of aid into the right channels. While aid is necessary to meet basic needs of civilians and victims of conflict, it is often abused by government or rebel forces to invigorate their soldiers and build up their arms supplies. Thus, aid can prolong conflict. (Case Study: Sudan)
  • Donor Fragmentation: The absence of multilateral donor coordination can frustrate good macroeconomic management and lead to sectoral mismatches. Furthermore, the often weak post-conflict authorities in the recipient country become overburdened with the administration of aid that comes from a large number of different sources. Bilateralism can lead to political and economic exploitation of both the internal division among recipients by the donors and the fragmentation of donors by the beneficiaries.

Methods of Risk Avoidance

  • Economic Opportunities: Economic growth brings employment opportunities, but peace is not automatically accompanied by economic recovery. As a strategy which brings more immediate effects, expansion of primary and secondary school enrolment should be considered. It increases future income-earning opportunities and has a so called "jail effect" on child soldiers and young combatants. While in school, they are less likely to be recruited for rebellions.
  • Micro-finance: International donor agencies can help create opportunities for economic activity and employment on a local level through the establishment of micro-credit institutions, which lend capital to people who do not have access to bank loans or other instruments of institutional financial markets because of stringent credit requirements.
  • Local Ownership: Investment at the community level is needed for the success of development. Thus, money freed by cutting military expenses should be re-invested to strengthen social institutions and civil society. A solid economic base at the local level can facilitate re-integration of former combatants.
  • Food and Land Distribution: Providing for basic needs and establishing food security in post-conflict countries is paramount in terms of laying the foundations for peaceful transition. The relocation of the displaced population into arable regions and equitable distribution of land between former adversary groups is not only necessary for economic recovery, but can also positively influence reconciliation.
  • Aid: Burnside and Dollar have argued that aid and policy are complementary. In low income countries aid is necessary to spur economic growth. Aid intensifies the effects of government policies and policies augment the effects of aid. It is possible that international donor agencies can positively influence the effects of aid if they exert pressure on post-conflict governments to adopt good policies; policies that guarantee that money are used for long-term economic recovery rather than for just short-term gains.
  • Control over Natural Resources: Diversification of the economy cannot be established in the short-term. One approach to avoid control over natural resources persisting as an immediate cause of violence is to concede some control over resource rents to rebels - although this will hardly prevent relapse into conflict in countries where more than one rebel group fight over resources that are too scarce to satisfy all groups' demands. The government can also undermine support for rebel movements or secession by returning the proceeds from natural resources to benefit the entire population. Transparency and balanced distribution of rents to as many beneficiaries as possible decreases the threat of future conflict by decreasing dissatisfaction among the population over the way rents are utilized by the government. The international community has the potential to eliminate this risk factor as a conflict cause by denying market access to those who use natural resource rents to prolong conflicts in their respective countries.
  • Macroeconomic Framework: Economic recovery calls for sound macroeconomic policies. International organizations provide budgetary support to post-conflict governments and assist in the restoration of financial institutions and appropriate legal frameworks. Investment guarantees can be instrumental for the recovery of key economic sectors and the return of expatriate expertise.
  • Social Safety Network: The creation of a social safety network is a long-term strategy. Social security provides individuals with economic independence and prevents discontent and social tensions from re-emerging in society.


Institution Building

  • Bertram, Eva, "Reinventing Government: The Promise and Perils of Peacebuilding," Journal of Conflict Resolution, Vol. 39, No. 3, September 1995, pp. 387-418
  • Cox, Marcus, State Building and Post-Conflict Reconstruction. The Lessons from Bosnia, (Geneva: Centre for Applied Studies in International Negotiations, 2000)
  • Hannum, Hurst, Autonomy, Sovereignty and Self-Determination - The Accommodation of Conflicting Rights, (Philadelphia: University of Pennsylvania Press, 1996)
  • Krishna Kumar, ed., Rebuilding Societies after Civil War – Critical Roles for International Assistance, (London: Lynne Rienner Publishers, 1997)
  • Pugh, Michael, Post-Conflict Rehabilitation: Social and Civil Dimensions, (Geneva: Centre for Applied Studies in International Negotiations, 1998)
  • Rubin, Barry M., The Transformation of Palestinian Politics: From Revolution to State-Building, (Cambridge, MA; Harvard University Press, 1999)
  • Spears, Ian S., "Understanding Inclusive Peace Agreements in Africa: The Problems of Sharing Power,"Third World Quarterly, Vol. 21., No. 1, February 2000, pp. 105-118
  • Vuckovic, Gojko, "Promoting peace and democracy in the aftermath of the Balkan wars: comparative assessment of democratization and institution-building processes in Croatia, Bosnia and Herzegovina, and former Yugoslavia," World Affairs, No. 162 (1), Summer 1999, pp. 3-10
  • UNDP, Management Development and Governance Division, Governance Foundations for Post-Conflict Situations: UNDP's Experience, (United Nations Development Program, 1999)


  • Cole, Kenneth ed., Sustainable development for a democratic South Africa, (London: Earthscan Publications Ltd, 1994)
  • Daalder, Hans, "The Consociational Democracy Theme," World Politics, Vol. 26, 1974, pp. 604-621
  • De Silva, K. M., Ethnic Diversity and Public Policies: Electoral Systems, (Geneva: UNRISD, 1994)
  • Diamond, Larry, Juan Linz and Seymour Martin Lipset, Politics in Developing Countries: Comparing Experiences with Democracy, (Boulder and London: Lynne Reiner Publishers, 1995)
  • Diamond, Larry, Promoting Democracy in the 1990s: Actors and Instruments, Issues and Imperatives, (New York: Carnegie Commission on Preventing Deadly Conflict, 1995)
  • Du Toit, Pierre, State building and democracy in Southern Africa: Botswana, Zimbabwe, and South Africa, (Washington, DC: United States Institute of Peace Press, 1995)
  • Gurr, Ted Roberts, Minorities at Risk: A Global View of Ethno-political Conflict, (Washington, DC: United States Institute of Peace Press, 1993)
  • Harris, Peter and Reilly, Ben, Democracy and Deep-Rooted Conflict: Options for Negotiators, (Stockholm: International IDEA, 1998)
  • Horowitz Donald L., "Making Moderation Pay: the Comparative Politics of Ethnic Conflict Management," in Joseph V. Montville, ed., Conflict and Peacemaking in Multiethnic Societies; (New York, NY: Lexington Books, 1990)
  • Horowitz, Donald L., Ethnic Groups in Conflict, (Berkley, CA: University of California Press, 1985)
  • Horowitz, Donald L., A Democratic South Africa? Constitutional Engineering in a Divided Society; (Berkley, CA: University of California Press, 1991)
  • Howe, Herbert M., "The South African Defense Force and Political Reform," Journal of Modern African Studies, Vol. 32, No. 1, March 1994, pp. 29-51
  • Huntington, Samuel P., The Third Wave: Democratization in the Late Twentieth Century, (Norman, OK: University of Oklahoma Press, 1991)
  • Inter-Parliamentary Union, Electoral Systems: A World-wide Comparative Study, (Geneva: Inter-Parliamentary Union, 1993)
  • Jenkins, Laura D., Ethnic Accomodation Through Electoral Systems, (Geneva: UNRISD, 1994)
  • Joseph, Richard ed., State, conflict, and democracy in Africa, (Boulder, CO: L. Rienner, 1999)
  • Lijphart, Arend, "Constitutional Choices for New Democracies," Journal of Democracy, No. 2, Winter 1991, pp. 72-84
  • Lijphart, Arend, Democracy in Plural Societies, (New Haven, CT: Yale University Press, 1977)
  • Lijphart, Arend, "The Power-Sharing Approach," in Montville, ed., Conflict and Peacemaking in Multiethnic Societies, (New York: Lexington Books, 1991), Ch.27, pp. 491-509
  • Lijphart, Arend, "Consociational Democracy," World Politics, Vol. 21, 1969, pp. 207-225
  • Lijphart, Arend, "Electoral Systems, Party Systems, and Conflict Management in Segmented Societies," in Robert A. Shrire, ed., Critical Choices for South Africa, (Cape Town: Oxford University Press, 1990), pp 2-13
  • Lijphart, Arend and Bernard Grofman, eds,, Choosing an Electoral System: Issues and Alternatives, (New York: Praeger, 1984)
  • Montville, J. ed., Conflict and Peacemaking in Multiethnic Societies, (New York: Lexington Books, 1991)
  • Przeworski, Adam, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America, (Cambridge: Cambridge University Press, 1991)
  • Ramsbotham, Oliver and Tom Woodhouse, Humanitarian Intervention in Contemporary Conflict: A Reconceptualization, (Cambridge: Polity Press, 1996)
  • Ray, James Lee, "The Democratic Path to Peace," Journal of Democracy, Vol. 8, No. 2, April 1997, pp. 49-64
  • Reid, Ann, "Conflict Resolution in Africa: Lessons from Angola," INR Foreign Affairs Brief, (Washington, DC: Bureau of Intelligence and Research, US Department of State; 1993)
  • Reilly, Ben and Andrew Reynolds, Electoral Systems in Divided Societies, (Washington, DC: National Research Council)
  • Reilly, Ben and Andrew Reynolds, The International IDEA Handbook of Electoral System Design, (Stockholm: International Institute for Democracy and Electoral Assistance, 1997)
  • Sartori, Giovanni, "Political Development and Political Engineering," Public Policy, No. 17, 1968, pp. 261-298
  • Shapiro, Ian, "Democratic Innovation: South Africa in Comparative Context," World , Vol. 46, 1993, pp. 121-150
  • Sisk, Timothy D., Power Sahring and International Mediation in Ethnic Conflicts, (Washington, DC: United States Institute of Peace Press, 1996)
  • Taagepera, Rein and Shugart, Matthew S., Seats and Votes: The Effects and Determinants of Electoral Systems, (New Haven, CT: Yale University Press, 1989)
  • Vuckovic, Gojko, "Promoting peace and democracy in the aftermath of the Balkan wars: comparative assessment of democratization and institution-building processes in Croatia, Bosnia and Herzegovina, and former Yugoslavia," World Affairs, No. 162 (1), Summer 1999, pp. 3-10

Economic Development

  • Azam, J. P., "How to Pay for the Peace? A Theoretical Framework with References to African Countries,"Public Choice, No. 83, 1995, pp. 173-184
  • Corden, W. M., "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Vol. 36, 1984, pp. 359-380
  • Collier, Paul and Hoeffler, Anke, "Greed and Grievance in Civil War," World Bank Policy Research Working Paper 2355, 2000
  • Collier, Paul and Hoeffler, Anke, "On the Economic Causes of Civil War," Oxford Economic Papers, Vol. 50, 1998, pp. 563-573
  • Grossman, H. I., "Foreign Aid and Insurrection," Defence Economics, Vol. 3, pp. 275-288
  • Lipschutz, Ronnie D., "Beyond the Neo-liberal Peace: From Conflict Resolution to Social Reconciliation,"Social Justice, Vol. 25., No. 4, Winter 1998, pp. 5-19
  • UNDP, Management Development and Governance Division, "Governance Foundations for Post-Conflict Situations: UNDP's Experience," (United Nations Development Program, 1999)
  • World Bank, Operations Evaluations Department, "The World Bank's Experience with Post-Conflict Reconstruction," Vol. 1, Synthesis Report, (Washington, DC: World Bank, 1998)