Financing Peace: International and National Resources for Postconflict Countries and Fragile States

After more than a decade of experience and research on financing arrangements in post conflict countries and fragile states, a consensus has emerged on at least one matter. The core objective is to build effective and legitimate governance structures that secure public confidence through provision of personal security, equal justice and the rule of law, economic well-being, and essential social services including education and health. These governance structures are necessary to ensure that countries do not turn, or turn back, to violence as a means of negotiating state-societal relations. This paper discusses a number of the weaknesses in current financing arrangements for post conflict countries and fragile states, with a focus on Official Development Assistance (ODA). We argue that tensions persist between business-as-usual development policies on the one hand and policies responsive to the demands of peace building on the other. The preferential allocation of aid to ‘good performers,’ in the name of maximizing its payoff in terms of economic growth, militates against aid to fragile and conflict-affected states. If the aim of aid is redefined to include durable peace, the conventional performance criteria for aid allocation lose much of their force. Compelling arguments can be made for assistance to ‘poor performers’ if this can help to prevent conflict. Yet the difficulties that initially prompted donors to become more selective in aid allocation remain all too real. Experience has shown that aid can exacerbate problems rather than solving them.

World Development Report 2011 : Conflict, Security, and Development

The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.

Desk Study on the Environment in Liberia

A new chapter in the history of Liberia started when the peace agreement in Accra, Ghana, was signed in August 2003. The National Transitional Government of Liberia has been established, and the United Nations peacekeeping mission in Liberia (UNMIL) is helping to reestablish the security in the country. The fighting in Liberia has not only had a devastating impact on its people but also on the country’s rich natural resources and biodiversity. In Liberia, as is the case in many other African countries, resource abundance or scarcity is all too often the catalyst for war and suffering. The Liberian people have been forced to pay a high price for living in a country rich in prized timber and mineral resources. In modern Africa, environment security and effective and fair resource governance are at the very heart of peacemaking and peacekeeping. The misuse of natural resources has not only been a source of conflict in Liberia and the wider region, but has also sustained it. Effective and strong management to promote the sustainable use of natural resources is central to preventing additional conflict in Liberia. For the long-suffering people of Liberia, many of whom have been displaced and separated from their families, this new era provides them with a chance for a better future.

The United Nations Environment Programme (UNEP) is the United Nations agency for the environment. I have been asked many times if in the post-conflict situation – like in Liberia today – it is too early to speak about environment and sustainable development. My experience
is that sustainable development cannot be achieved if one of the three key components of it – economic, social or environmental – is forgotten. In Liberia, the country’s growth is dependent on the management and use of its natural resources: timber, minerals, agriculture
and wildlife. Unfortunately, during the last 14 years of misery we have witnessed the woeful and unsustainable use of Liberia’s natural wealth to buy arms and support conflict. UNEP, as a part of the United Nations Development Group and its Needs Assessment process for Liberia, has managed the cross-cutting sector of environment. Working with United Nations colleagues, the government of Liberia and its agencies and with non-governmental organisations, UNEP has collated environmental background data, which is now published in this desk study. My sincere wish is that as soon as the security situation allows, the comprehensive environmental legislation already prepared by Liberia as well as recommendations of this study can be fully implemented.

Choosing to Target: What Types of Countries Get Different Types of World Bank Projects

Well-governed countries are more likely to make use of foreign aid for the purposes of economic development and poverty alleviation. Therefore, if aid agencies are providing funds for the sake of development, these countries should receive more aid and categorically different types of aid as compared with poorly governed countries. In poorly governed countries aid should be given in forms that allow for less discretion. Using an original data set of all World Bank projects from 1996 to 2002, the author distinguishes programmatic projects from investment projects and national from subnational investment projects. If the World Bank allows more discretion in well-governed countries, then it will choose to provide programmatic and national aid for these recipients. The author presents evidence that the World Bank provides a larger proportion of national investment lending in better-governed countries. With regard to programmatic lending, he finds mixed evidence. Among counties eligible for International Development Association (IDA) aid, good governance surprisingly is associated with a lower proportion of programmatic aid, whereas for International Bank for Reconstruction and Development (IBRD) borrowers, good governance is associated with a higher proportion. The author subjects these results to a number of robustness checks. Although he confirms the existing result in the literature that the World Bank provides larger overall amounts of aid to better-governed countries, his examination of the disaggregated data leads to questioning whether both lending wings of the World Bank are designing aid programs in the most prodevelopment way possible.

Grasping the Financing and Mobilization Cost of Armed Groups: A New Perspective on Conflict Dynamics

This paper approaches conflict financing as a combination of available revenue sources and the cost to start and maintain armed conflict. The paper therefore goes beyond conceptualizations of conflict financing that only look at the total available revenue of armed groups. Based on recent small arms research, the paper sketches a tool to estimate the mobilization cost of armed groups with the objective to establish data points for barriers to entry into armed conflict and the cost of competition during armed conflict. The paper argues that what matters in conflict financing is to identify the financing and mobilization costs together, and if an armed group can pay for the type of conflict required to reaching its objective. The paper contributes to an evolving literature on the feasibility of conflict and provides a new perspective on conflict dynamics with implications for peace processes, peacebuilding, and policy against conflict financing.

A Study on the Inter-Relation Between Armed Conflict and Natural Resources and its Implications for Conflict Resolution and Peacebuilding

The article investigates the inter-relation between armed conflict and natural resources and its implications for conflict resolution and peacebuilding. The first part discusses and clarifies the nexus between natural resources and armed conflict, arguing that the former have a strong link with the latter only when natural resources have particular natural and geographical characteristics and when a country experiences peculiar political, societal and economic situations. The article shows how this inter-relation is various and diverse, at the point that even scholars who studied it have sometimes disagreed on their researches. The second part analyses the implications for conflict resolution and peacebuilding. Since changing the natural and geographical characteristic of natural resources is almost impossible, the article argues that conflict resolution and peacebuilding policies should be aimed to reduce those political, societal, and economic situations that, if inter-related with the presence of natural resources in a country, can affect armed conflicts. The analysis discusses how the presence of natural resources should be addressed during the resolution of a conflict and should be considered during the post-conflict peacebuilding phase. Finally, it tries to identify how international actors can have an effective role in conflict resolution and peacebuilding when natural resources are at stake.

National Design and State Building in Sub-Saharan Africa

This article examines the political geography of state building in contemporary sub-Saharan Africa. The absence of interstate war has produced a unique situation for contemporary state builders in Africa; they have inherited states with relatively fixed borders encapsulating a variety of environmental and geographic conditions, compounded by varying distributions of population densities. The author examines the effects of a variety of strategies that African rulers have employed to enhance their state-building efforts given the type of national design they inhabit. These strategies include the allocation of citizenship, interventions in land tenure patterns, and the adoption and management of national currencies. The author tests the effects of these strategies on several dimensions of state capacity in sub-Saharan Africa from 1960 to 2004 using a variety of statistical analyses. The results indicate that the strategies currently adopted by African rulers have generally failed to substantially augment their capacity.

State Building for Future Wars: Neoclassical Realism and the Resource-Extractive State

Neorealist theory holds that the international system compels states to adopt similar adaptive strategies namely, balancing and emulation or risk elimination as independent entities. Yet states do not always emulate the successful practices of the system’s leading states in a timely and uniform fashion. Explaining this requires a theory that integrates systemic-level and unit-level variables: a ‘resource-extraction’ model of the state in neoclassical realism. External vulnerability provides incentives for states to emulate the practices of the system’s leading states or to counter such practices through innovation. Neoclassical realism, however, suggests that state power – the relative ability of the state to extract and mobilize resources from domestic society – shapes the types of internal balancing strategies that countries are likely to pursue. State power, in turn, is a function of the institutions of the state, as well as of nationalism and ideology. The experiences of six rising or declining great powers over the past three hundred years – China, France, Great Britain, Japan, Prussia (later Germany), and the United States – illustrate the plausibility of these hypotheses.

Harmonizing the Humanitarian Aid Network: Adaptive Change in a Complex System

Humanitarian aid operations save many lives, but they also fail to help many people and can have unintended political consequences. A major reason for the deficit is poor coordination among organizations. In contrast to “lessons learned” studies that dominate the literature on this topic, this article uses systemic network theory, drawn from business management literature. It presents the humanitarian aid community as a complex, open, adaptive system, in which interaction of structure and processes explain the quality of the response to environmental demands. Comparison of aid operations in Rwanda in 1994 and Afghanistan in 2001 probes the argument that the humanitarian system is becoming more effective by developing characteristics of a network through goal-directed behavior of participating organizations. The study finds development of network characteristics in the system when clusters of organizations learn to coordinate more closely, but the system is constrained by the workload of a crisis environment, lack of trust among organizations, and the political interests of donor governments.

Iraq’s Political Transition After the Surge: Five Enduring Tensions and Ten Key Challenges

The common refrain that the surge has produced military success that has not been matched by political progress fundamentally misrepresents the nature of Iraq’s political evolution. The increased security achieved over the last two years has been purchased through a number of choices that have worked against achieving meaningful political reconciliation. The reductions in violence in 2007 and 2008 have, in fact, made true political accommodation in Iraq more elusive, contrary to the central theory of the surge. Rather than advancing Iraq’s political transition and facilitating power-sharing deals among Iraq’s factions, the surge has produced an oil revenue-fueled, Shia-dominated national government with close ties to Iran. This national government shows few signs of seeking to compromise and share meaningful power with other frustrated political factions. The surge has set up a political house of cards. But this does not mean that the U.S. military must stay longer to avoid its collapse. Quite the contrary: Without a U.S. military drawdown, Iraq will not be able to achieve the true internal consolidation of power necessary to advance U.S. security interests in the Middle East. Iraq will need to overcome numerous hurdles in its political transition before the end of 2009, including two elections and a long list of unresolved power-sharing questions. Not all of the 10 key challenges outlined in this report are of equal magnitude-failure to resolve some would likely lead to major, systemic crisis, while failure on others would simply be suboptimal. Yet all are interconnected, and none have been resolved by the security improvements of the last 18 months or will be meaningfully addressed simply by postponing U.S. troop withdrawals.

The Secretary Will Deny All Knowledge of Your Actions: The Use of Private Military Contractors and the Implications for State and Political Accountability

This article argues that the main issue regarding the use of private military contractors (PMCs) is that of accountability. It begins by exploring the status of mercenaries in international law, as reflected in various conventions, protocols, and state practice. It maintains that contrary to popular belief, the use of PMCs or mercenaries–no matter how defined–is not a violation of international law. However, their use has serious political implications at both the domestic and state levels because it obfuscates the issue of ultimate responsibility.

Corrupting or Consolidating the Peace? The Drugs Economy and Post-conflict Peacebuilding in Afghanistan

This article examines how the drugs economy emerged, evolved and adapted to transformations in Afghanistan’s political economy. With a primary focus on the conflictual war to peace transition following the signing of the Bonn Agreement, the relationship between drugs and political (dis)order is explored. Central to the analysis is an examination of the power relationships and institutions of extraction that developed around the drug economy. Expanding upon a model developed by Snyder (2004), it is argued that joint extraction regimes involving rulers and private actors have tended to bring political order whereas private extraction regimes have led to decentralized violence and political breakdown. This model helps explain why in some parts of Afghanistan drugs and corruption have contributed to a level of political order, whereas in other areas they have fuelled disorder. Thus, there is no universal, one-directional relationship between drugs, corruption and conflict. Peacebuilding involves complex bargaining processes between rulers and peripheral elites over power and resources and when successful leads to stable interdependencies. Counter-narcotics policies have the opposite effect and are thus fuelling conflict.

Fixing Failed States: A Framework for Rebuilding a Fractured World

The international community has struggled without much success to remedy the problem of failed states. Meanwhile, 40 or 50 countries around the world — from Sudan and Somalia to Kosovo and East Timor — remain in a crisis of governance. In this impressive book, Ghani, a former Afghan finance minister, and Lockhart, who has worked at the World Bank and the United Nations, assess the missteps and offer a new framework for coordinated action. They argue that international responses have failed because they have been piecemeal and have proceeded with little understanding of what states need to do in the modern world system to connect citizens to global flows. They advocate a “citizen-based approach.” State-building strategies would be organized around a “double compact”: between country leaders and the international community, on the one hand, and country leaders and citizens, on the other. The book also proposes methods for the generation of comparative data on state capacity — a “sovereignty index” — to be annually reported to the UN and the World Bank. Ultimately, this study offers a surprisingly optimistic vision. The fact that so many disadvantaged countries have made dramatic economic and political transitions over the last decade suggests that developmental pathways do exist — if only the lessons and practical knowledge of local circumstances can be matched to coordinated and sustained international efforts. The authors provide a practical framework for achieving these ends, supporting their case with first-hand examples of struggling territories such as Afghanistan, Sudan, Kosovo and Nepal as well as the world’s success stories–Singapore, Ireland, and even the American South.

Nation-Building: Beyond Afghanistan and Iraq

Fukuyama brings together esteemed academics, political analysts, and practitioners to reflect on the U.S. experience with nation-building, from its historical underpinnings to its modern-day consequences. The United States has sought on repeated occasions to reconstruct states damaged by conflict, from Reconstruction in the South after the Civil War to Japan and Germany after World War II, to the ongoing rebuilding of Iraq. Despite this rich experience, there has been remarkably little systematic effort to learn lessons on how outside powers can assist in the building of strong and self-sufficient states in post-conflict situations. The contributors dissect mistakes, false starts, and lessons learned from the cases of Afghanistan and Iraq within the broader context of reconstruction efforts in other parts of the world, including Latin America, Japan, and the Balkans. Examining the contrasting models in Afghanistan and Iraq, they highlight the Coalition Provisional Authority in Iraq as a cautionary example of inadequate planning.

Too Little, Too Late? International Oversight of Contract Negotiations in Post-conflict Liberia

International actors involved in transitional post-conflict situations often focus their attention on the reconstruction of a state’s political apparatus. Even where control of natural resources is central to the conflict, there tends to be less consideration of resource governance issues in transitional periods. This article examines one particular aspect of resource governance – the negotiation and signing of foreign investment contracts – in the context of post-conflict, pre-election Liberia. The investment contract process was mishandled by the transitional Liberian government. Although local interests resisted external oversight, international actors could and should have done more, in the interest of all Liberians, to proffer contract negotiation expertise and to prevent the transitional government from locking the state into unsatisfactory deals on major resource assets. International actors did address the contract issue and external oversight of economic governance more generally during Liberia’s formal transitional period, but ultimately their interventions amounted to too little and they came too late.

Mission Without End? Peacekeeping in the African Political Marketplace

Since the mid-1990s the UN, in tandem with major western powers, has embarked upon an ambitious effort of peace support operations in Africa. The results of what we may call the ‘Annan experiment’ are not yet in. But there are good reasons to fear that, in many African countries, such peace operations have defend normative outcomes that are beyond realistic expectation, so that they can never hope to ‘succeed’. This article examines the political and economic functioning of fragile African states using the lens of a ‘political marketplace’ in which local elites seek to obtain the highest reward for their loyalty, over short time horizons, within patrimonial systems. In such systems, political institutions are incapable of managing confect, which means that standard peacemaking efforts and peacekeeping operations do not align with domestic possibilities for settlement. To the contrary, external engagements can so distort domestic political markets that they obstruct national political bargaining and result in an open-ended commitment to peacekeeping in countries such as the Democratic Republic of Congo and Sudan.

Development Co-operation and Conflict in Sierra Leone

This article examines the role of development co-operation in the 1991-2001 civil war in Sierra Leone. British military intervention, sanctions against Liberia for supporting the rebellion and the deployment of UN peacekeepers were key, albeit belated, initiatives that helped resolve the conflict. The lessons are that, first, domestic forces alone may be incapable of resolving large-scale violent conflicts in Africa. Second, conflict tends to spread from one country to another, calling for strong regional conflict resolution mechanisms and deeper regional integration to promote peace. Third, donor policies need to address the root causes of state fragility, especially the political and security dimensions, which they tend to ignore. Fourth, a critical analysis is required to determine circumstances in which elections could undermine peace: the conduct of donor-supported elections under an unpopular military government in Sierra Leone culminated in an escalation of the conflict. Finally, a united international community is crucial to resolve a complex conflict and it should be accompanied by strong and timely measures informed by a full understanding of local conditions.

Investing for Peace: The Private Sector and the Challenges of Peacebuilding

The new environment for peacebuilding is defined by new approaches to aid, a redefinition of the private sector to include hybrid forms of state and market activity, a new balance of emphasis between corporate social responsibility activities on the part of private-sector actors and the foundational importance of robust legal and regulatory frameworks, a structural boom in demand for natural resources, and the opportunity to have essential small and medium-sized private-sector activity catalysed by macro-finance investment in natural-resources sectors. It presents new risks as well as new opportunities and requires, above all, a new compact between the international donor community and governments in countries experiencing or emerging from conflict that seek to trade their way to sustainable development.

Assessing the Environmental Constraints of Repatriation and Reintegration in Post-Conflict Societies: Implications for Policy and a Durable Peace

Postconflict peacebuilding has come to exemplify the process of consolidating peace in war-torn socieities. For the international community, repatriation and reintegration are viewed not only as the most durable solution to addressing refugees but also as critical to postconflict peacebuilding success. This paper uses environmental constraints as an explanatory lens to understand outcomes of refugee repatriation and reintegration. Specifically, it examines two key environmental constraints – access to productive land and natural resources extraction to meet livelihood needs. This paper focuses on the refugee repatriation and reintegration processes in postconflict Mozambique, Guatemala and Rwanda and makes three substantive arguments. First, the underlying norms, assumptions and decisions of national governments and the international community – which emphasizes repatriation and reintegration to one’s home of origin or home community – may actually be counterproductive to short-term protection, sustainable reintegration and long-term stability. Second, although refugees frequently want to return home, their choices are made with the intention of seeking out better livelihoods over time and space. And third, environmental constraints are significant, and can have either positive or negative repercussions for sustained peace in postconflict societies. In the end, this paper is a preliminary assessment that raises questions for further empirical work.

The Political Economy of Armed Conflict: Beyond Greed and Grievance

Globalization, suggest the authors of this collection, is creating new opportunities-some legal, some illicit-for armed factions to pursue their agendas in civil war. Within this context, they analyze the key dynamics of war economies and the challenges posed for conflict resolution and sustainable peace. Thematic chapters consider key issues in the political economy of internal wars, as well as how differing types of resource dependency influence the scope, character, and duration of conflicts. Case studies of Burma, Colombia, Kosovo, Papua New Guinea, and Sri Lanka illustrate a range of ways in which belligerents make use of global markets and the transnational flow of resources. An underlying theme is the opportunities available to the international community to alter the economic incentive structure that inadvertently supports armed conflict.

Profiting from Peace: Managing the Resource Dimensions of Civil War

In contemporary civil wars, combatants’ access to lucrative natural resources has been both a means and a motive for armed conflict and thus has often served to counter incentives for peace. Profiting from Peace offers the first comprehensive assessment of practical strategies and tools that might be used by both international and state actors to help reduce the illicit exploitation of natural resources and the related financial flows that sustain violence