The international development institutions and regionalism: the case of South-East Asia

Why is it that the World Bank has failed to effectively incorporate the impact of regionalisation within its economic development strategies and policy advice for borrowing countries? This is an interesting puzzle given the increasing importance that scholarly observers, policy practitioners and development agencies have attached to regionalism and regionalisation in recent years. In the fiscal years 1995?2005, the World Bank provided only US$1.7 billion in support for regional (or multi-country) operations across the globe?this is less than 1 percent of its project and other funding overall. In South-East Asia, while the Asian Development Bank has had a particularly strong engagement with regionalism, the World Bank has only recently started to come on board with regional analysis and programs. The article proposes that the gap is due to a combination of institutional and ideological factors, and explores this proposition through a study of the World Bank in Vietnam.

Referendum, Response and Consequences for Sudan. The Game between Juba and Khartoum

To examine the relationship between patient satisfaction and doctor performance, the authors observed 2,271 interactions between 292 doctors and their patients in this paper presents a game theory model of the strategic interaction between Khartoum and Juba leading up to the referendum on Sudan’s partition in 2011. The findings show that excessive militarization and brinksmanship is a rational response for both actors, neither of which can credibly commit to lower levels of military spending under the current status quo. This militarization is often at the expense of health and education expenditures, suggesting that the opportunity cost of militarization is foregone economic development. These credibility issues might be resolved by democratization, increased transparency, reduction of information asymmetries, and efforts to promote economic and political cooperation. The paper explores these devices, demonstrating how they can contribute to Pareto preferred outcomes in equilibrium. The authors characterize the military expenditure associated with the commitment problem experienced by both sides, estimate its costs from data for Sudan, and identify the opportunity cost of foregone development implied by continued, excessive, and unsustainable militarization.

Postconflict Transitions: An Overview

In the two to five years immediately following end of conflicts, UN peacekeeping operations have succeeded in maintaining peace, while income and consumption growth rates have been higher than normal and recovery on key education and health indicators has been possible. Aid also has been super-effective in promoting recovery, not only by financing physical infrastructure but also by helping in the monetary reconstruction of postconflict economies. However, sustaining these short-term gains was met with two difficult challenges. First, long-term sustainability of peace and growth hinges primarily on the ability of postconflict societies to develop institutions for the delivery of public goods, which, in turn, depends on the capacity of post-conflict elites to overcome an entrenched culture of political fragmentation and form stable national coalitions, beyond their immediate ethnic or regional power bases. Second, after catch-up growth runs its course, high levels of aid could lead to overvalued real currencies, at a time when growth requires a competitive exchange rate and economic diversification. Successful peace-building would, therefore, require that these political and economic imperatives of postconflict transitions be accounted for in the design of UN peacekeeping operations as well as the aid regime.

Peace on quicksand? Challenging the conventional wisdom about economic growth and post-conflict risks

In a widely cited study, Collier, Hoeffler & Soderbom show that economic growth reduces the risk of post-conflict peace collapse – particularly when the UN is present with a peace mission. These findings are encouraging for interventionist international policymakers. We replicate their study using data from the UCDP/PRIO Armed Conflict Database instead of the Correlates of War database. We generate a series of different datasets on the basis of different coding criteria commonly used in the literature, and rerun a simplified version of their model. Our results do not support their findings regarding the risk-reducing effect of economic growth and UN involvement. At best, the results are mixed. Some of the models even suggest that economic growth may increase the risk of post-conflict peace collapse. Overall, we are forced to conclude that the impacts of economic growth and UN involvement on the risk of post-conflict peace collapse are neither clear nor simple. The differences in the results seem to be driven by two sources: the conflicts included in the original datasets and the coding of the start and end dates of the conflicts.

American and European Responses to the Arab Spring: What’s the Big Idea?

The Arab countries straddle the lifelines of world trade. They link Europe to Asia and, with Iran, surround the Persian Gulf home to some 54 percent of global oil reserves. The region’s many international and domestic disputes, as well as restraints on political expression and human rights, have spawned extremism. In turn, the region’s endemic instability or perceived risk of instability has provided cover for some of the world’s most authoritarian and corrupt regimes. Until the turn of this year, the Arab countries had almost uniformly resisted the process of democratization that swept up other regions in recent decades. The series of popular revolts known as the Arab Spring, which began in Tunisia in the last weeks of 2010, has already wrought more change in six months than the region had seen in almost 60 years and there is more to come. Whether or not the Arab peoples’ aspirations for dignity and voice are fulfilled, and how smoothly transitions to democracy proceed, are not just great moral questions they will also determine the region’s stability and its economic prospects for decades to come. At the same time, getting on a path of sound economic growth will greatly enhance the chances that transitions to democracy succeed.

Reconstructing Iraq’s economy

To establish even a marginally functioning economy out of the wreckage of Iraq would have been a daunting task. Despite decades of a heavily controlled, state-run economy; the deterioration caused by a succession of wars; a decade of international sanctions; and the looting and sabotage that followed the 2003 war, the U.S. government set its sights high after toppling Saddam Hussein: to create a liberal, market-based Iraqi economy, a key piece of its broader goal to bring democracy to Iraq.

Statebuilding and Foreign Direct Investment: The Case of Post-2003 Iraq

Within the broader debate over the political economy of statebuilding, the role of foreign direct investment (FDI) in fragile and post-conflict settings is increasingly controversial but still understudied. This paper examines the tensions between the good governance agenda currently being implemented in Iraq and the investment dynamics occurring at the country’s national and provincial levels. Drawing on disaggregated data, the paper argues that the flow of FDI is reinforcing destabilizing dynamics in Iraq by increasing levels of inequality, deepening the decentralization process, and undermining internal and external balances of power.

Greed and Grievance in Civil War

May 2000 Of the 27 major armed conflicts that occurred in 1999, all but two took place within national boundaries. As an impediment to development, internal rebellion especially hurts the world’s poorest countries. What motivates civil wars? Greed or grievance? Collier and Hoeffler compare two contrasting motivations for rebellion: greed and grievance. Most rebellions are ostensibly in pursuit of a cause, supported by a narrative of grievance. But since grievance assuagement through rebellion is a public good that a government will not supply, economists predict such rebellions would be rare. Empirically, many rebellions appear to be linked to the capture of resources (such as diamonds in Angola and Sierra Leone, drugs in Colombia, and timber in Cambodia). Collier and Hoeffler set up a simple rational choice model of greed-rebellion and contrast its predictions with those of a simple grievance model. Some countries return to conflict repeatedly. Are they conflict-prone or is there a feedback effect whereby conflict generates grievance, which in turn generates further conflict? The authors show why such a feedback effect might be present in both greed-motivated and grievance rebellions. The authors’ results contrast with conventional beliefs about the causes of conflict. A stylized version of conventional beliefs would be that grievance begets conflict, which begets grievance, which begets further conflict. With such a model, the only point at which to intervene is to reduce the level of objective grievance. Collier and Hoeffler’s model suggests that what actually happens is that opportunities for predation (controlling primary commodity exports) cause conflict and the grievances this generates induce dias-poras to finance further conflict. The point of policy intervention here is to reduce the absolute and relative attraction of primary commodity predation and to reduce the ability of diasporas to fund rebel movements. This paper – a product of the Development Research Group – is part of a larger effort in the group to study civil war and criminal violence

Breaking the Conflict Trap : Civil War and Development Policy

Most wars are now civil wars. Even though international wars attract enormous global attention, they have become infrequent and brief. Civil wars usually attract less attention, but they have become increasingly common and typically go on for years. This report argues that civil war is now an important issue for development. War retards development, but conversely, development retards war. This double causation gives rise to virtuous and vicious circles. Where development succeeds, countries become progressively safer from violent conflict, making subsequent development easier. Where development fails, countries are at high risk of becoming caught in a conflict trap in which war wrecks the economy and increases the risk of further war. The global incidence of civil war is high because the international community has done little to avert it. Inertia is rooted in two beliefs: that we can safely ‘let them fight it out among themselves’ and that ‘nothing can be done’ because civil war is driven by ancestral ethnic and religious hatreds. The purpose of this report is to challenge these beliefs.

Does Africa need a Marshall plan?

The article evaluates the case for a Marshall Plan for Africa as a solution to the continent’s development dilemma. It argues ‘that rather than a lack of capital, inappropriate economic policies and corrupt governance that have made the continent capital?hostile, are the fundamental causes of Africa’s underdevelopment. These factors have induced domestic capital flight, prevented the inflow of private investment and greatly limited the productivity of aid. The article suggests that democratic politics are more likely to encourage policy and institutional reforms in Africa, noting that the problem of being considered a ‘bad neighbourhood’ is a serious constraint on the growth of Africa’s few thriving economies. It suggests that the developmental challenge in Africa is predominantly political, and concludes that a massive infusion of external capital will only be effective in combination with domestic policy reform and institutional strengthening.

Aid, Policy, and Growth in Post-Conflict Societies

Countries emerging from civil war attract both aid and policy advice. This paper provides the first systematic empirical analysis of aid and policy reform in the post-conflict growth process. It is based on a comprehensive data set of large civil wars and covers 27 countries that were in their first decade of post-conflict economic recovery during the 1990s. The authors first investigate whether the absorptive capacity for aid is systematically different in post-conflict countries. They find that during the first three post-conflict years, absorptive capacity is no greater than normal, but that in the rest of the first decade it is approximately double its normal level. So ideally, aid should phase in during the decade. Historically, aid has not, on average, been higher in post-conflict societies, and it has tended to taper out over the course of the decade. The authors then investigate whether the contribution of policy to growth is systematically different in post-conflict countries, and in particular, whether particular components of policy are differentially important. For this they use the World Bank policy rating database. The authors find that growth is more sensitive to policy in post-conflict societies. Comparing the efficacy of different policies, they find that social policies are differentially important relative to macroeconomic policies. However, historically, this does not appear to have been how policy reform has been prioritized in post-conflict societies.

The Impact of Military Spending on the Likelihood of Democratic Transition Failure: Testing Two Competing Theories

Many countries complete tenuous transitions to democracy and must work to prevent an authoritarian reversal, which is often at the hands of the military. One of the most important tools the new government has in dealing with the military is the amount of money allocated to the military. This leads to the question, how does government military spending in post-transition democratic countries affect the chances of democratic transition failure? The extant literature provides two answers. The first is to increase military spending to placate the military; the second is to decrease military spending to weaken the military and address social welfare needs. The article tests these two hypotheses by examining democratic transitions from 1967 to 1999 using both logit and survival analysis methods. The results of the study provide robust support for the hypothesis that decreasing military spending decreases the likelihood of a democratic transition failure.

When Peacebuilding Contradicts Statebuilding: Notes from the Arid Lands of Kenya

Local peace initiatives have been introduced in post-conflict settings in aid of statebuilding processes. However, contradictions in such efforts that undermine the state become apparent in a development context when government institutions are, generally, functioning. Peacebuilding initiatives in the arid lands of Kenya are a good example of this. While they have proved successful in resolving conflicts at the local level, they challenge the state structure in three ways. First, some of their features run counter to the official laws of Kenya and jeopardize the separation of powers. Second, they pose a dilemma, since their success and legitimacy are based on grassroots leadership and local concepts of justice. Both can be at odds with democratic decision-making, inclusiveness and gender equity. Third, they provide yet another tool for abuse by politicians and other local leaders. This reveals a dilemma: aspects of peacebuilding can actually undermine a statebuilding endeavour.

Understanding Civil War : Evidence and Analysis, Volume 2. Europe, Central Asia, and Other Regions

The two volumes of Understanding Civil War build upon the World Bank’s prior research on conflict and violence, particularly on the work of Paul Collier and Anke Hoeffler, whose model of civil war onset has sparked much discussion on the relationship between conflict and development in what came to be known as the “greed” versus “grievance” debate. The authors systematically apply the Collier-Hoeffler model to 15 countries in 6 different regions of the world, using a comparative case study methodology to revise and expand upon economic models of civil war. (The countries selected are Burundi, Congo, Democratic Republic of Congo, Nigeria, Kenya, Mozambique, Sudan, Algeria, Mali, Senegal, Indonesia, Lebanon, Russian Federation, Colombia, Northern Ireland, Bosnia-Herzegovina, Macedonia, and the Caucasus.) The book concludes that the “greed” versus “grievance” debate should be abandoned for a more complex model that considers greed and grievance as inextricably fused motives for civil war.

Introduction – Key Themes in Peacebuilding and Corruption

Since the end of the cold war, interventions to stabilize post-conflict societies have grown in number, length and scope, no longer just interposing troops between combatants and negotiating a peace agreement, but engaging in far-reaching efforts of institutional and societal transformation to prevent a relapse into war and to encourage a sustainable peace. On the one hand, this expansion of peacebuilding reflects the recognition that functioning institutions are central to post-conflict stability, as they can help to manage conflicts over power, resources and identity in divided societies. For most of the international organizations and donors involved in post-conflict peacebuilding, these institutions are liberal-democratic ones by necessity because they are considered to give all conflict parties a stake in the new, post-war order, they are concomitant with the protection of human rights and the rule of law, and they encourage economic growth. On the other hand, the expansion of peacebuilding activities reflects a growing understanding of how war economies have perpetuated conflict and how economic power structures and dynamics can persist well into peacetime. As well as causing war and sustaining it, the political economy of conflict also shapes the possibilities and the nature of the peace that follows. This emphasis on the role of political institutions and political economy in post-conflict peacebuilding has increasingly shifted the attention of peacebuilders towards the issue of corruption. Closely associated with the distortion of the market and the malfunction of political institutions, corruption is considered a key challenge to consolidating peace because it hinders economic development, perpetuates the unjust distribution of public resources, and undermines the legitimacy and effectiveness of government. In recent years, there has been a growing literature on the impact of corruption after conflict. This collection of papers aims to contribute to this debate by examining the specific conceptual and political challenges that corruption poses to post-conflict peacebuilding. Across the different papers in this special issue, a complex set of issues emerges to shape our understanding of postconflict corruption, its impact on stability and development, and the consequences of anti-corruption measures in the context of peacebuilding efforts. In this introduction, the implications for peacebuilding will be discussed in greater detail.

The Aftermath of Civil War

Using an “event-study” methodology, this paper analyzes the aftermath of civil war in a cross-section of countries. It focuses on those experiences where the end of conflict marks the beginning of a relatively lasting peace. The paper considers 41 countries involved in internal wars in the period 1960-2003. In order to provide a comprehensive evaluation of the aftermath of war, the paper considers a host of social areas represented by basic indicators of economic performance, health and education, political development, demographic trends, and conflict and security issues. For each of these indicators, the paper first compares the post- and pre-war situations and then examines their dynamic trends during the post-conflict period. The paper concludes that, even though war has devastating effects and its aftermath can be immensely difficult, when the end of war marks the beginning of lasting peace, recovery and improvement are indeed achieved.

What Explains Aid Project Success in Post-Conflict Situations?

This paper investigates the effectiveness of post-conflict aid at the project level and aims to identify post-conflict situations as a window of opportunity for project success. The Independent Evaluation Group dataset provides extensive information on the characteristics of World Bank projects including an independent rating of their success, supervision and evaluation quality. The paper estimates the probability of success of aid projects depending on the characteristics of the intervention and looks for possible special patterns in post civil war situations. The results suggest that the probability of success of World Bank projects increases as peace lasts. Supervision appears to be a crucial determinant of the success of projects, especially during the first years of peace. Although the results of the sector-level analysis need to be taken with caution, the authors find that projects in the transport sector and in the urban development sector appear more successful in post-conflict environments. On the contrary, education projects seem less successful and therefore need to be highly supervised. Projects in the private sector should wait as they face a higher probability of failure in the first years of peace.

Campaign disconnect: operational progress and strategic obstacles in Afghanistan, 2009–2011

Success in war depends on alignment between operations and strategy. Commonly, such alignment takes time as civilian and military leaders assess the effectiveness of operations and adjust them to ensure that strategic objectives are achieved. This article assesses prospects for the US-led campaign in Afghanistan. Drawing on extensive field research, the authors find that significant progress has been made at the operational level in four key areas: the approach to counterinsurgency operations, development of Afghan security forces, growth of Afghan sub-national governance and military momentum on the ground. However, the situation is bleak at the strategic level. The article identifies three strategic obstacles to campaign success: corruption in Afghan national government, war-weariness in NATO countries and insurgent safe havens in Pakistan. These strategic problems require political developments that are beyond the capabilities of the International Security Assistance Force (ISAF). In other words, further progress at the operational level will not bring ‘victory’. It concludes, therefore, that there is an operational-strategic disconnect at the heart of the ISAF campaign.

Diasporas and conflict societies: conflict entrepreneurs, competing interests or contributors to stability and development?

This paper summarises our state of knowledge regarding diaspora engagement in conflict societies. It presents a map of possible diaspora contributions and their specific potential positive and negative impacts in societies experiencing or recovering from conflict. Following a discussion of diasporas and their motivations for engagement in their places of origin, the paper reviews the specific remittance, philanthropy, human capital and policy influence contributions, both positive and negative, that diasporas may make. Policy implications include the need more systematically to include considerations of diasporas in conflict/post-conflict interventions, and based on a more careful case-by-case analysis, using the provided map as a starting point. Such analyses can inform decisions of when to tolerate, unencumbered, diaspora engagement; when to facilitate or support such engagement; and when to consider strategic partnering with diaspora efforts. By mapping potential positive and negative influences of diasporas, the paper establishes why a more nuanced understanding of diasporas and peace and conflict is so important to policy and practice for a more peaceful world.

How to Assess Social Reintegration of Ex-Combatants

The social reintegration of ex-combatants is one of the most critical aspects of peacebuilding processes. However, contrary to economic reintegration in which it would be possible to set up some quantitative indicators in terms of accessing vocational training opportunities, employment and livelihoods income for the assessment of success, social reintegration is an intangible outcome. Therefore, what constitutes a successful social reintegration and how it could be assessed continues to be the challenge for both academics and practitioners. This article will undertake an investigation of the preliminary parameters of social reintegration at the macro, meso and micro levels in order to identify a set of indicators for programme assessment. A nuanced understanding of ex-combatant reintegration is expected to allow the development of context-based indicators according to the specific characteristics of that particular environment. The article also recommends the use of participatory research methods as they would be more appropriate for the measurement of social reintegration impact.

Gender, Conflict, and Development

This book highlights the gender dimensions of conflict, organized around major relevant themes such as female combatants, sexual violence, formal and informal peace processes, the legal framework, work, the rehabilitation of social services and community-driven development. It analyzes how conflict changes gender roles and the policy options that might be considered to build on positive aspects while minimizing adverse changes. The suggested policy options and approaches aim to take advantage of the opportunity afforded by violent conflict to encourage change and build more inclusive and gender balanced social, economic and political relations in post-conflict societies. The book concludes by identifying some of the remaining challenges and themes that require additional analysis and research.

Economic Development and Military Effectiveness

What makes some states more militarily powerful than others? A growing body of research suggests that certain ‘non-material’ factors significantly affect a country’s ability to translate resources into fighting power. In particular, recent studies claim that democracy, Western culture, high levels of human capital, and amicable civil-military relations enhance military effectiveness. If these studies are correct, then military power is not solely or even primarily determined by material resources, and a large chunk of international relations scholarship has been based on a flawed metric. The major finding of this article, however, suggests that this is not the case. In hundreds of battles between 1898 and 1987, the more economically developed side consistently outfought the poorer side on a soldier-for-soldier basis. This is not surprising. What is surprising is that many of the non-material factors posited to affect military capability seem to be irrelevant: when economic development is taken into account, culture and human capital become insignificant and democracy actually seems to degrade warfighting capability. In short, the conventional military dominance of Western democracies stems from superior economic development, not societal pathologies or political institutions. Therefore, a conception of military power that takes into account both the quantity of a state’s resources and its level of economic development provides a sound basis for defense planning and international relations scholarship.

Karzai’s curse – legitimacy as stability in Afghanistan and other post-conflict environments

Post-conflict reconstruction and stabilisation have focused upon the establishment of both strong states capable of maintaining stability and various forms of ‘Good Governance’. However, both presume the development of substantial security sectors and highly functioning administrative systems within unrealistically brief periods of time. The failure to meet such inflated expectations commonly results in the disillusionment of both the local populations and the international community, and, hence, increased state fragility and decreased aid financing and effectiveness. As such the authors re-frame the basic question by asking how stabilisation can be achieved in spite of weak state institutions during reconstruction processes. Based upon extensive field research in Afghanistan and other conflict-affected contexts, the authors propose a model of post-conflict stabilisation focused primarily on the attainment of legitimacy by state institutions. Finally, the authors examine how legitimacy-oriented stabilisation and reconstruction will benefit from emerging models of ‘collaborative governance’ which will allow international interventions, through consociational relationships with fragile states and civil society, to bolster rather than undermine political legitimacy.

Transition from war to peace in Sub-Saharan Africa

Several devastating conflicts have persisted in Sub-Saharan Africa for the past 20 years or more. Some countries are still emerging from the era of cold war politics, while debilitating internal struggles continue to plague others. Ethiopia, Namibia, South Africa, Uganda, and more recently, Angola and Mozambique are examples of the former. The latter is illustrated by the situation in countries such as Liberia, Somalia and the Sudan. This study, the transition from war to peace in Sub-Saharan Africa, offers practical guidance and examples of good practice for improving the design and implementation of programs for demobilization, reinsertion, and reintegration of ex-combatants and their dependents in client countries. It also provides a list of early warning signals that indicate whether the demobilization and reintegration programs (DRPs) process is not going according to plan and suggests preventive actions. Work on the ground, as well as case analysis in countries such as Ethiopia, Namibia, Uganda, Angola, Mozambique, and Rwanda form the basis of the suggested good practice in DRPs.

Post-conflict security sector and public finance management : lessons from Afghanistan

In recent years, international organizations have concluded that standard principles of Public Finance Management (PFM) are equally applicable to all areas of the national budget, including the security sector. In many cases long-term external assistance may be required for the security sector, generating severe trade-offs with other priority sectors which also require long-term external support. Overcoming the legacy of a fiscally unsustainable and poorly managed security sector calls for full application of PFM principles to support the establishment of checks and balances required to establish a wholly accountable security sector. The recent World Bank PFM review of Afghanistan, perhaps the first example of such a review, provides a number of lessons, summarized in this note. Some of these include: security in post-conflict situations is a key condition for a return to political normalcy and conversely, development is also needed for security; PFM practices can take into consideration the most complex and confidential issues without undermining the application of the fundamental principles of accountability to elected civil authorities; and reviewing security reform through a PFM lens reduces risks and costs to both the country concerned and donors.

Greater Great Lakes regional strategy for demobilization and reintegration

This document first outlines a comprehensive strategy for disarmament, demobilization and reintegration (DDR) activities in the greater Great Lakes region of central Africa. The purpose of this strategy is to enhance the prospects for stabilization and recovery in the region. The DDR of the ex-combatants is necessary to establishing peace and restoring security, which are in turn pre-conditions for sustainable growth and poverty reduction. A multi-country approach will enhance effectiveness of the international response, provide greater coherence among DDR activities, facilitate positive feedback relationships among DDR activities in the region, provide similar incentives for all parties to the conflict to pursue peaceful strategies, address the regional externalities associated with some individual programs, enhance transparency of closely related DDR activities, and facilitate knowledge-sharing and training across DDR implementers. A regional strategy also serves as a confidence-building measure. The strategy, if successfully implemented, will have a significant impact on reducing poverty by helping to consolidate peace, building confidence among governments in the region, helping to free up national resources for investment, attracting foreign capital, investing in the human capital of ex-combatants, and enhancing capacities for development at the community level.

Migration, Remittances, and Children’s Schooling in Haiti

In this paper, we focus on the use of remittances to school children remaining in migrant communities in Haiti. After addressing the endogeneity of remittance receipt, we find that remittances raise school attendance for all children in some communities regardless of whether they have household members abroad or not; however, in other communities, we only observe this effect among children living in households that do not experience any family out-migration. Our finding underscores the simultaneous and opposing impacts of household out-migration and remittance receipt on children’s schooling. While the receipt of remittances by the household lifts budget constraints and raises the children’s likelihood of being schooled, the disruptive effect of household out-migration imposes an economic burden on the remaining household members and reduces their likelihood of being schooled. As such, remittances ameliorate the negative disruptive effect of household out-migration on children’s schooling and, given the substantial costs of schooling in Haiti, contribute to the accumulation of human capital in the midst of extreme poverty.