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Civil war and the economies of the peace dividend

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  • Paul Collier

Abstract

Civil wars dramatically reduce income. Peace might therefore be expected to generate a dividend which both the government and the private sector can spend. Paradoxically, those civil wars which are prolonged and therefore do most damage create only small instant peace dividends. Income has fallen because capital has been lost and so cannot recover until capital has been reaccumulated. However, some of the capital losses are reverable. Once confidence in a secure environment is restored there is a delayed peace dividend as private capital is repatriated and `social capital' is rebuilt. Postwar governments should therefore focus not upon how to spend an illusory early dividend, but on how to restore private confidence.

Suggested Citation

  • Paul Collier, 1995. "Civil war and the economies of the peace dividend," CSAE Working Paper Series 1995-08, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:1995-08
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    File URL: https://ora.ox.ac.uk/objects/uuid:e8dd4a1c-7a0c-4304-92ef-470b33dcf497
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    References listed on IDEAS

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    1. Azam, Jean-Paul & Bevan, David & Collier, Paul & Dercon, Stefan & Gunning, Jan & Pradhan, Sanjay, 1995. "Some economic consequences of the transition from civil war to peace," Policy Research Working Paper Series 1392, The World Bank.
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    Cited by:

    1. Frances Stewart & Frank Humphreys & Nick Lea, 1997. "Civil conflict in developing countries over the last quarter of a century: An empirical overview of economic and social consequences," Oxford Development Studies, Taylor & Francis Journals, vol. 25(1), pages 11-41.
    2. Bassil Charbel, 2013. "Macroeconomic Consequences of War and Terrorism in Lebanon," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 19(3), pages 415-429, December.
    3. Meghan O'Sullivan, 1997. "Household entitlements during wartime: The experience of Sri Lanka," Oxford Development Studies, Taylor & Francis Journals, vol. 25(1), pages 95-121.
    4. Wijeweera Albert & Webb Matthew J., 2010. "A Peace Dividend for Sri Lanka: The Case for a Return to Prosperity Following the End of Hostilities," Global Economy Journal, De Gruyter, vol. 10(2), pages 1-11, May.
    5. Piffaretti, Nadia F., 2010. "From Rent-seeking to Profit-creation: Private Sector Development and Economic Turnaround in Fragile States," MPRA Paper 26558, University Library of Munich, Germany.
    6. Dercon, Stefan & Ayalew, Daniel, 1998. "Where have all the soldiers gone: Demobilization and reintegration in Ethiopia," World Development, Elsevier, vol. 26(9), pages 1661-1675, September.
    7. Tobias, Jutta M. & Mair, Johanna & Barbosa-Leiker, Celestina, 2013. "Toward a theory of transformative entrepreneuring: Poverty reduction and conflict resolution in Rwanda's entrepreneurial coffee sector," Journal of Business Venturing, Elsevier, vol. 28(6), pages 728-742.
    8. Arias Andrés F. & Laura Ardila, 2003. "Military Expenditure and Economic Activity: The Colombian Case," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, September.
    9. Colin W. O'Reilly, 2015. "Firm Investment decisions in the post-conflict context," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(4), pages 717-751, October.
    10. Mark Henstridge, 1998. "The reconstruction of a macroeconomic dataset for Uganda," CSAE Working Paper Series 1998-03, Centre for the Study of African Economies, University of Oxford.
    11. Binetti, Marco Nicola, 2023. "Rebuilding energy infrastructures and the manufacturing sector in post-conflict countries," Energy Policy, Elsevier, vol. 172(C).
    12. Colin O’Reilly, 2014. "Investment and Institutions in Post-Civil War Recovery," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 56(1), pages 1-24, March.
    13. repec:ilo:ilowps:324861 is not listed on IDEAS
    14. Uzoma Iloanugo & Indranil Dutta & M. Emranul Haque, 2020. "Do Amnesty Policies Reduce Conflict? Evidence from the Niger-Delta Amnesty Program," Economics Discussion Paper Series 2011, Economics, The University of Manchester.

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