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A framework for peace-conducive economic development

February 10, 2015

In my previous post, I suggested five ways in which change happens, of relevance to those trying to harness economic development for peace. This is something I am exploring as I write an International Alert report on peace-conducive economic development. That still leaves open the question of how to define a ‘peace-conducive economy’, and how to promote progress towards it? Clearly, simply ensuring economic improvement in a conflict-affected context does not automatically increase peace, as some economic development promoters used to – or perhaps still – believe. So what are the broad indicators of the kind of economic development which motivates people to act peacefully, resolving their conflicts without violence, and in which the presence of positive peace enables economic improvement in a virtuous circle? From the literature and experience, I suggest peace-conducive economic development can be recognised by four broad outcome indicators:

  • Decent livelihoods. People are gainfully employed in decent work (whether self-employed or employed by others) – i.e. they earn sufficient income to live with dignity, and are treated with equality and dignity while working. By this we mean they are not treated in an inhuman or degrading way; that nobody ‘owns’ another person or can force them to work under threat of punishment. Decent livelihood opportunities need to be both available and fairly accessible, so exclusion is minimised, and mobility maximised.
  • Capital. People are able to own and accumulate economic assets securely, both to provide them with a cushion in time of need, to improve their income, and to invest in and improve the economy; and to do so in a way which is fair to others. As with livelihoods, the access to such opportunities needs to be fair. Capital may be individually or jointly owned and managed, even by the community or the state in the case of welfare safety nets.
  • Revenue. The state collects sufficient revenue, and invest it to provide the infrastructure and services needed for the economy and peace to flourish, and to do so fairly and strategically, with both economic growth and strengthening peace as explicit policy intentions.
  • Sustainability. Economic development enhances or at least avoids damaging the environment, and enhances or at least avoids undermining peace-positive attributes in society.

In other words, a society – writ large or small – is more likely to prosper and promote stability and peace, when people have more or less equal access to livelihood opportunities sufficient for their needs, and can plan for and protect themselves from future shocks, and safely invest in improving their own economic condition and in growing the economy of which they are a part; when government is able to provide services and infrastructure; and when the social and physical environment is not being degraded and made less productive or conducive to people’s welfare.

 

model feb 10

More important perhaps, is the question: what makes these four outcomes of a peaceful economy more likely? In other words, what are the underlying features of a peacefully prosperous environment?  Drawing broadly on the literature and our own experience, I have sketched a generic framework to explain this, as shown on the right. This identifies seven mutually interacting levers of change, i.e. arenas in which promoters of economic development can identify ways to integrate peace into their policies, strategies and projects. These are:

  • The overall make-up of the economy: Different countries and zones have different economies, defined by history and geography as well as the other factors in this model. Variables include import/export balance; openness; strength of consumer demand; diversity; proportions of primary, secondary and services sectors; peasant vs. commercial farming; vulnerability to supply chain or market risks.
  • Human capital: The capacity and capability of individuals and groups, and society as a whole to make economic and social progress through the application of spirit, knowledge and skills.
  • Relationships: Functional relationships across and between societies enable communication and foster predictability and trust; which in turn underpins functional relationships.
  • Justice: The availability of formal and informal mechanisms, based on clear a priori rules, for avoiding and adjudicating disputes, and punishing those who break rules and norms. Justice relies on the predictable production and execution of judgements by authorised parties; and in this predictability resides its preventive power.
  • Security: The degree to which individuals, families, communities and organisations are and feel safe, now and in the foreseeable future. Security is a function of service provision by state and other providers, individual and group capacity, and of the strength and quality of social norms, relationships and social capital.
  • Infrastructure: The existence of and access to an enabling physical infrastructure, especially in terms of energy, communications and transport, and essential services such as health facilities and schools.
  • Capital including land: The opportunity to accumulate or borrow financial capital for investment, and/or to acquire the rights to use land for an economic purpose.

These swim in a sea defined by the political economy (i.e. the sum of interactions between values, incentives, interests and institutions), which influences them and is in turn influenced by them – hence a good understanding of the political economy is essential in determining which of the levers can be shifted, and how far.

As I develop this, I’d be interested to hear from both peacebuilders and economic development promoters if this framework makes any sense as a lens through which to plan and judge economic development which proactively aims to be conducive for sustained peace.

 

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