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Post-Conflict Risks

Centre for the Study of African Economies, Department of Economics, University of Oxford

Anke Hoeffler

Centre for the Study of African Economies, Department of Economics, University of Oxford, anke.hoeffler{at}economics.ox.ac.uk

Måns Söderbom

Department of Economics, School of Business, Economics and Law, University of Gothenburg

Post-conflict societies face two distinctive challenges: economic recovery and reduction of the risk of a recurring conflict. Aid and policy reforms have been found to be effective in economic recovery. In this article, the authors concentrate on the other challenge — risk reduction. The post-conflict peace is typically fragile: nearly half of all civil wars are due to post-conflict relapses. The authors find that economic development substantially reduces risks, but it takes a long time. They also find evidence that UN peacekeeping expenditures significantly reduce the risk of renewed war. The effect is large: doubling expenditure reduces the risk from 40% to 31%. In contrast to these results, the authors cannot find any systematic influence of elections on the reduction of war risk. Therefore, post-conflict elections should be promoted as intrinsically desirable rather than as mechanisms for increasing the durability of the post-conflict peace. Based on these results, the authors suggest that peace appears to depend upon an external military presence sustaining a gradual economic recovery, with political design playing a somewhat subsidiary role. Since there is a relationship between the severity of post-conflict risks and the level of income at the end of the conflict, this provides a clear and uncontroversial principle for resource allocation: resources per capita should be approximately inversely proportional to the level of income in the post-conflict country.

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