Advanced Search
MyIDEAS: Login to save this paper or follow this series

Some economic consequences of the transition from civil war to peace


Author Info

  • Azam, Jean-Paul
  • Bevan, David
  • Collier, Paul
  • Dercon, Stefan
  • Gunning, Jan
  • Pradhan, Sanjay


Drawing on evidence from Africa - especially Ethiopia and Uganda - the authors of this volume draw conclusions about economic policy in the aftermath of civil war. A sample of conclusions follows. Civil wars differ from international wars. They are informal, often have no clear beginning and end, weaken rather than strengthen the authority of the state, and leave two unreconciled armies to be demobilized within one territory. Civil wars erode the institutions of civil society, leading to a decline in the stock of social capital, which takes some time to restore. Private investment and government revenue are slow to recover, and military expenditures are not easily reduced. As a result, there is little or no peace dividend in the short run. The period of transition to peace is a particularly suitable time for radical policy reform, despite the high degree of polarization typical in countries engaged in civil war. And speedy reform, far from increasing uncertainty, is likely to reduce it. After a civil war, private agents are fearful both of each other and of the government. This, perhaps even more than physical damage to infrastructure, hinders private-sector-led recovery, as irreversible investment is delayed despite being financeable. The transition to peace is primarily the transition from fear and the defensive responses that became ingrained in wartime. The peace dividend comes as a gradual recovery of confidence induces repatriation of financial and human capital. Such confidence can be boosted by the early sequencing of investment-sensitive policy reforms and by preserving low inflation through direct consumer price index targeting. Lack of confidence can be compensated for by temporary undervaluation of the exchange rate, or however, may prove more difficult to make credibly time-bound. Finally, aid can permit accelerated rehabilitation of the infrastructure (especially transport networks) needed to return to a market economy. Contrary to the studies hypothesis, the authors found that demobilization - at least in Uganda - did not lead to a significant upsurge in insecurity. In the short term, demobilization significantly reduced crime, unless the demobilized lacked access to land. If the demobilized returned to their home areas and were given some assistance, with identifiable exceptions they were able to find income-earning opportunities.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1392.

as in new window
Date of creation: 01 Dec 1995
Date of revision:
Handle: RePEc:wbk:wbrwps:1392

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Web page:
More information through EDIRC

Related research

Keywords: Debt Markets; Emerging Markets; Economic Theory&Research; Investment and Investment Climate;


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. van Wijnbergen, Sweder, 1990. "Trade reform, policy uncertainty, and the current account," Policy Research Working Paper Series 520, The World Bank.
Full references (including those not matched with items on IDEAS)


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mehlum, Halvor & Moene, Karl-Ove & Torvik, Ragnar, 2003. "Plunder & Protections Inc," Memorandum, Oslo University, Department of Economics 10/2002, Oslo University, Department of Economics.
  2. Patricia Justino, 2006. "On the Links between Violent Conflict and Chronic Poverty: How Much Do We Really Know?," HiCN Working Papers 18, Households in Conflict Network.
  3. Paul Collier, 1995. "Civil war and the economies of the peace dividend," Economics Series Working Papers, University of Oxford, Department of Economics WPS/1995-08, University of Oxford, Department of Economics.
  4. Stefan Dercon, 2001. "Economic reform, growth and the poor: evidence from rural Ethiopia," CSAE Working Paper Series 2001-08, Centre for the Study of African Economies, University of Oxford.
  5. Tilman Brück, . "Macroeconomic Effects of the War in Mozambique -," QEH Working Papers, Queen Elizabeth House, University of Oxford qehwps11, Queen Elizabeth House, University of Oxford.
  6. Kimbambu Tsasa Vangu, Jean - Paul, 2012. "Analyse de la Relation Guerres Civiles et Croissance Économique
    [Civil Wars and Economic Growth in DRC]
    ," MPRA Paper 42424, University Library of Munich, Germany, revised 05 Feb 2012.
  7. 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.
  8. Dercon, Stefan & Ayalew, Daniel, 1998. "Where have all the soldiers gone: Demobilization and reintegration in Ethiopia," World Development, Elsevier, Elsevier, vol. 26(9), pages 1661-1675, September.
  9. 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.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1392. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.