Fiscal aspects of the transition from war to peace

When a country emerges from a lengthy war, it is inevitable that the transition to a peacetime economy should have profound budgetary consequences. A number of African countries have embarked on this transition in recent years, and it is to be hoped that others will soon follow suit. In these circumstances, it is natural to enquire whether the fiscal challenges and opportunities accompanying the transition have common features, and whether the experience of countries which began the process relatively early may be useful in the formulation of policy in the others. This paper considers this question, using the experiences of Uganda and Ethiopia to illustrate Section 2 identifies a number of potentially systematic features, and later sections look at these in more detail. Section 3 discusses the revenue characteristics of the transition and Section 4 considers expenditure patterns. Section 5 looks briefly at the impetus to decentralise, and Section 6 concludes.