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Building prosperity and peace: integrating peacebuilding into economic development

March 30, 2015

This is a draft of a document I’m working on for publication by International Alert in a few months. Therefore comments would be very welcome indeed.

1              Introduction

Despite major gains for peace in the past few decades, violent conflict remains a factor in too many places. Over 1.5 billion people live in fragile and conflict-affected countries, and the current situation of people in countries as diverse as Syria, Yemen, Libya, Myanmar, Afghanistan, Philippines, Mali, India, Colombia, Pakistan, the Democratic Republic of Congo, Iraq, Ukraine, Nigeria, South Sudan, Somalia, and the Central African Republic – and in fragile parts of more stable countries where gang- and crime-related violence prevails – is a salient reminder of the need to focus national and international efforts on peacebuilding.

Economy and conflict are intimately linked. Competition over access to resources lies behind, indeed is often at the heart of most wars and other forms of organised violence. Sustainable peace within and between societies is really only possible when people have fair access to sustainable livelihood and asset accumulation opportunities, combined with general well-being, justice, security in a context of good governance.

Economic success is clearly the main preoccupation of businesses. And economic development is often the major preoccupation of governments and individuals – prosperity symbolises their ambitions for progress and a better life. So those promoting economic development play an influential role in defining how societies make progress. In countries affected by violent conflict, or where institutional fragility increases the likelihood of violent conflict, the nature of economic development takes on even more importance. This is because it is not axiomatic that economic development is good for peace. Unfortunately, while some economic development approaches support progress towards sustainable peace, some approaches can also undermine peace. For example economic growth based on narrow, non-labour intensive sectors like mineral extraction have contributed to instability and violence. It can be perceived as excluding many people from the benefits of growth, and is also apt to be captured by narrow elite interests who therefore do their best to retain control of the levers of political and economic power. A more diverse and labour-intensive economy, on the other hand, typically allows for wider participation and thus a stake in stability and further development.

This means that how people and organisations leading economic development efforts do so, is of fundamental importance to peace in their contexts. Their actions shape the economy, which in turn helps shape the prospects for peace. Politicians, civil servants, businesses, NGOs and international organisations all play a role in shaping the economy, and thus peace, through a combination of policy, business and investment decisions, and development programmes and projects. International agreements and norms, and those who determine them, also play an influential role.

But most of these people and institutions pay little attention to this aspect of their role and those who do, often lack guidance in how to integrate peacebuilding into their work. The larger report summarised here provides them with broad guidance. It elucidates a framework within which they can integrate peacebuilding goals and strategies into their primarily economic plans, and provides overall practical advice on how they can begin to do this. Finally, it provides higher level recommendations which, if taken on board, would enable economic development promoters to integrate peacebuilding into their work more routinely, and thus combine economic development, profitable business and investment, and progress towards sustainable peace.

 

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2              A peace-conducive economic development framework

Figure 1 above illustrates the main elements of the peace-conducive economic development framework which we explain here. It is organised in four categories.

2.1 Outcomes of peace-conducive economic development

‘Peace’ is intuitively obvious at a human level, but seems very vague and distant to those defining policy, project or business outcomes. So one of the challenges is to identify simple, practical and recognisable indicators of progress towards peace which are relevant for economic promoters. Drawing on International Alert’s experience and this research, we isolated four broad outcomes of peace-conducive economic development for this purpose:

  • Decent livelihoods. People are gainfully employed in decent work (self-employed or employed by others). They earn enough to live with dignity, and are treated with equality and dignity while working. They are not treated in an inhuman or degrading way; and 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, to minimise exclusion and maximise mobility. This requires per capita economic growth.
  • Capital. People are able to own and accumulate economic assets securely, 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, access to capital accumulation opportunities needs to be fair. Capital may be individually or jointly owned and managed, including by the community or the state as in the case of welfare safety nets.
  • Revenue and services. The state, or other authorised institutions, collect 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.
  • Environmental and social sustainability. Economic development enhances or at least avoids damaging the environment, and enhances or at least avoids undermining peace-positive attributes in society.

To integrate peacebuilding, businesses, governments and others should thus explicitly map how they will contribute to these outcomes through their policies, projects, business plans and approaches.

2.2 The political economy

Political economy is an analytical lens through which to understand the intersection of political and economic power, where power over different opportunities is held and resources allocated, and by whom. All economic policies and projects must be devised and implemented within the realities of the political economy, so as to capitalise on opportunities and avoid being obstructed by vested interests. Otherwise they will fail.

Most political economy analysis frameworks seem to converge on four fundamental, inter-linked parameters – ‘the four Is’:

  • Interests: of individuals and groups, in relation to changes versus the status quo
  • Incentives for stasis or change, as they apply to different specific interests
  • Ideology and values, underpinning people’s perception of what is in their interests, and which may modify the most obvious rational economic preferences
  • Institutions, inasmuch they provide opportunities for particular courses of action, especially in terms mediating between the different interests of different actors. Institutions are as often informal – for example culturally determined approaches to decision-making, deference to older people, civic duty, informal taxation paid to gangs – as formal.

Interests and incentives define how those with or without power will respond to a given situation or opportunity, either seeking change or to maintain the status quo. People’s interpretation of their interests is coloured or modified by their values or ideology. And institutions are the norms and mechanisms through which people’s and organisations’ actions and transactions are mediated in line with their interests and the incentives operating on them, and which tend to reflect and reinforce the prevailing values – or at least the values of those with power. In short, the political economy determines where opportunities for change do or don’t exist.

2.3 Seven levers of change

We identified seven domains of intervention in which economic development promoters can plan their contribution to peace. For economic development actors wanting to contribute to peace, these are the ‘levers of change’.

The make-up of the economy – the kinds of economic activity which prevail, and how people contribute to and benefit from them.

Variables include imports and exports; openness; the strength of consumer demand; diversity; the relative proportions of primary, secondary and services sectors; peasant versus commercial farming; and vulnerability to supply chain or market risks. Over the long term peace is correlated with diversity, a high jobs:investment ratio, dynamism and creativity; long, multi-stranded value chains providing opportunities for new business and for jobs, and taxation and regulation; and economic sectors which are by nature dynamic – e.g. thriving small and medium sized enterprises (SMEs) contribute to a more creative political and economic culture. An economy dominated by natural resource sectors tends to be liable to elite capture, and may reinforce clientilism, corruption and exclusion. ‘Shadow’ or illicit economic sectors and practices can have a similar effect. But it is important to contextualise these kinds of issues: e.g. open markets are better for peace, but allowing powerful elites privileged access and economic power may provide short-term stability. Likewise informal economies may be hard to tax, but may be the best way to maximise livelihood opportunities in the short and medium term.

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.

This assumes a well-educated population, and specifically in skills relevant to important economic sectors, creative problem solving, entrepreneurship and teamwork; a spirit of inclusion, and an openness to human capital improvement across gender and identity groupings; a reasonably healthy population with sufficient access to meet their basic needs and to entertain and fulfil aspirations. These attributes are critical to peaceful problem and conflict management and resolution, and thus to peace; and also, in the main, to economic development.

Relationships – functional relationships across and between societies enable communication and foster predictability and trust, which in turn underpins functional relationships.

Collaboration and resilient relationships both within and between gender and other identity groups is a critical element of peace. Relationships allow people to understand the interests and needs of others, and provide the opportunity for the development of trust, empathy and collaboration which is essential to routine, non-violent management of conflicts.

The rule of law – the availability and accessibility of formal and informal mechanisms, based on clear a priori rules, for avoiding and adjudicating disputes, and punishing those who break rules and norms.

Rule of law assumes the predictable production and execution of judgements by authorised parties; and in this predictability resides its power to prevent violence. It means the application of clear, consistent and fair rules, emphasising property rights and the rights of the individual; the absence (or rareness) of impunity. No-one is above the law. It ultimately replaces and discourages unfair and violent behaviours and is thus good for peace; while impunity encourages them and undermines peace. It also encourages investment.

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, of individual and group capacity, and of the strength and quality of social norms, relationships and social capital.  Cicero wrote that the security of the people is the highest law, and it remains one of the key components of peace. Without it, the risk of violence and harm increases, and therefore pre-emptive violence also becomes more likely; whereas security allows people to build trustful relationships. A sense of security allows and encourages people to accumulate economic assets and build human capital, thus increases their resilience to shocks. Security is also an enabler of business and economic activity more broadly.

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.

Infrastructure should be tailored to actual needs and opportunities across society, not favouring only some groups. It should be open, accessible and maintained – and thus ideally funded through tax or other sustained income. Public infrastructure should be managed for public good. Access to information prevents distorted rumours from exacerbating conflict; access to other infrastructure allows needs to be met and enables progress on the other elements in this model. And infrastructure is of course an essential enabler of economic development.

Land and capital – the opportunity to accumulate or borrow financial capital for investment, and/or to acquire the rights to use land.

When capital is widely accessible, based on business merit rather than identity or relationships, it allows for a more diverse and resilient economy, which is by nature more resilient to violence, as there are more resource options and less narrow competition. Access to capital and/or land is important for peace in that it allows for inclusion, and for the creation of jobs and business opportunities; people in decent work and with developed capital or land (i.e. a stake) are less likely to fight.

2.4 Opportunity, leadership and agency 

The economies of conflict-affected societies are by definition insufficiently conducive to peace. They are unlikely to be transformed automatically, not least because their political economies tend to be dominated by those with an interest in, and the power to maintain the status quo. Changes of the kind needed to support peace tend to be incremental, often organic, and non-linear: but they also benefit from a combination of three factors: opportunity, leadership and agency.

Moments which are propitious for change occur. These are opportunities for progress, if seized by the right leaders with sufficient capacity and agency. The risks of conflict associated with large mining or oil projects in a fragile context are well-known. On the other hand, the arrival of a large disruptive mining or other economic project, with multiple stakeholders and potential winners and losers, represents an opportunity to practise and demonstrate good governance. By engaging multiple stakeholders and respecting their interests, those leading such a project can create an experience of participation, consensus and compromise which may be relatively rare in some contexts, resulting in improved relationships among citizens, and between citizens, state and businesses, which can be built upon for other governance purposes. Likewise, new technologies, the end of a war, or reconstruction after a natural disaster represent opportunities to use or test new approaches.

Leadership for peacebuilding through economic development is provided by politicians and government, as in the case of structural changes to the rural economy underway in Rwanda, designed to promote the twin aims of economic growth and long-term stability; by businesses, as in the development of communications infrastructure and the fair allocation of jobs by investors, and the adoption of new practices by farmers; by civil society activists promoting local livelihoods and economically literate education, etc.; by international agencies operating within the country in question; or by international actions with cross-border impacts, such as the implementation of anti-money laundering measures or moves to decriminalise drugs. Despite concerns about ‘doing-no-harm’, and the complexity and limits of cause-and-effect models, the role of progressive agency remains critical, at whatever level or scope.

2.5 Tensions between economic development and peace

We saw in 2.3 that economic development and peacebuilding go hand-in-hand, in many respects. By promoting one, we can often promote the other. But this is not automatic, and there are undeniable tensions between some economic development initiatives, and the needs of peace, for example:

  • Fast-tracking economic growth initiatives may undermine peace processes if they are insufficiently inclusive or conflict-sensitive
  • Economic growth or transformation initiatives which make land or other resources accessible for commercial investors may create new land- or resource-based grievances
  • Promoting socio-economic mobility too rapidly may undermine the perceived or actual interests of incumbents
  • There may be competition between human capital and infrastructure needs for public investment funds, with infrastructure having the fastest economic return, but the latter having a greater sustainable peace return
  • A trade-off between enabling rational strategic economic investment opportunities, focused in few geographical areas, and the need for more widespread investment in infrastructure to enable peace dividends across society
  • In general, there is a tension between short-term stability and long-term sustainability; and between incumbency and openness
  • Meanwhile some peace processes may ignore economic factors, for example the interests of potential peace spoilers, and thus fail: new democratic institutions seen as good for peace may hinder existing economic norms, and thus be subject to spoilers.

Managing these tensions is critical in ensuring that economic development contributes sustainably to peace.

4              Using the framework

The framework is designed for analysis and planning by politicians, civil servants, businesses, NGOs and international agencies – separately or together. Its utility is in working out how to integrate peace into economic development: in practical terms, to adapt economic approaches so they promote peace. The starting point for most planners will therefore be their own initial economic development niche or project. Obviously the processes for determining public policy, or planning business development projects are rarely linear. But for the sake of clarity, we outline a generic five-step planning process which consists of clarifying the mandate, defining relevant peace outcomes, analysing the political economy and the seven ‘levers of change’, developing a concrete plan, and then implementation and evaluation.

Step 1: Mandate

If most economic development promoters ignore their potential contribution to peace, a critical first step is clarify this – engaging all key stakeholders (for example politicians, constituencies, boards of directors and shareholders). For governments and many international agencies this should present no problem a priori, and businesses are increasingly aware of their responsibility to create ‘shared value’, i.e. ‘identifying and expanding the connections between societal and economic progress’. Many international agencies increasingly recognise a role in contributing to peace, as illustrated by the World Bank’s creation of a Center for Conflict, Security and Development to guide its programming.

Step 2: Relationship to the four peace and prosperity outcomes

The next step is to determine a more specific ambition in terms of our four ‘outcomes’ of peace-promoting economic development: sustainability, decent livelihoods, revenue and services, and safe capital accumulation. Most economic projects expect to have some impact on some of these, by default. But we must go beyond the ‘default’. This means examining all four characteristics to determine whether and how the agency and its project can make a difference to them as they link to peace and conflict in the specific context. This also requires identifying the tensions between peace and economic development which we noted earlier, and working out how to resolve them.

Step 3: Analysis of the political economy and the seven levers of change

The next step is to identify the extent to which the project’s contribution will be possible within the constraints of the political economy, the likely opportunities for change, the leadership and agency needed, and the mechanisms for adaptation in terms of the seven ‘levers of change’. Above all this requires a thorough and critical analysis of the context using a political economy lens, and of any proposed strategy.

Step 4: Plan

Once the project analysis has been done, pathways through which to achieve the peaceful prosperity outcomes using the levers of change are defined. This should involve a wide range of stakeholders, to ensure buy-in but also that the plans are reality-checked, and take sufficient account of diverse interests.

Step 5: Implementation, adaptation and evaluation

The project is then implemented, with continuous participatory monitoring by disinterested parties to ensure that assumptions about the political economy were sound, that the intended outcomes for peace and economic development are being achieved as planned. Plans are adapted as needed and lessons are learned and shared.

5              Examples

The full report gives an account of how this framework can be used by governments in public policy, by businesses, NGOs, international agencies and in international norms and policies. We draw on a small number of these here as illustrations, applied to the political economy and to each of the seven levers of change. Taken all together, they reinforce the idea that change is incremental, indirect and often small in scale, and requires leadership, agency and opportunity. They also show that integrating peacebuilding into economic development is practical and feasible.

Political economy

As an example of how political and economic power can interact in support of peace: the incidence of piracy in Somalia is lower in areas where clan leaders (i.e. institutions) benefit from informal taxation of imports and exports, as piracy disrupts this trade and thus their interests. Piracy grew when livestock exports to Saudi Arabia were banned; and then reduced when the ban was lifted. In another example, business leaders with access at the highest level of government in the Philippines have come together to provide politicians with advice on bringing the country’s long-running civil wars to a sustainable close, and in Kenya to help avoid election violence. Both cases combined close links to politicians with a business interest in stability.

The make-up of the economy

After the 1994 genocide, the government saw that Rwanda’s economic dependency on small farms, poor soils and limited consumer markets provided insufficient resilience to the demographic and social pressures which had contributed to instability. It has joined the East African Community to enlarge its markets, is modernising the agricultural sector, and is developing the information technology sector through specialised training and infrastructure: all this with the twin aims of improving the economy and reducing tensions. Banks in Peru require businesses to complete a kind of social impact study as part of their loans process, to ensure projects contribute to ‘shared value’ in society as well as commercial gain. NGOs, the government and international organisations all contributed to restructuring Burundi’s coffee sector, to make it less corrupt, more efficient and more open to participation, as a contribution to peace.

Human capital

Recent research described how a mining company supported the establishment of a multi-stakeholder forum to explore alternative livelihoods for land-poor communities in its area of operation, as a contribution to local stability through wider economic participation and social stability. The formal disciplines and culture of many modern businesses is often quite different from local informal, sometimes clientilist approaches, and can thus create a model of different, often more effective and fairer approaches. These values sometimes ‘leak’ out into society through the business gates. The idea of jobs creation programmes for peace was popularised by the 2011 World Development Report, but this has not yet been translated into practice on a wide scale. International agencies, businesses and host governments could consider jointly developing programmes to create jobs in very large numbers, over sufficient time – perhaps twenty-five years – in fragile contexts to provide work for young people who might otherwise become radicalised for violence, an economic boost, and peace-promoting infrastructure development, all at once.

Relationships

The study Local Business, Local Peace gives examples of employers consciously integrating staff from different ethnic or religious identities at work, in contexts of mutual mistrust outside, as a contribution to improved harmony and economic success, e.g. in the Philippines. In many countries, business networks have played proactive roles lobbying for improved relationships across conflict divisions, or better local justice and security provision. Trade can strengthen relationships. In Uganda the Lord’s Resistance Army – a rebel group associated with the Acholi tribe – attacked Lira town. The population of Lira, predominantly from the Langi tribe, boycotted Acholi businesses. Commerce as a whole stagnated, and it was Langi business leaders who initiated a process to reopen trade relations. Last year in Colombia over 120 businesses launched a #Soy Capaz (‘#I can’) peace campaign, aimed at reinforcing the peace process, using symbols of togetherness linked to their products such as “I can …wear my enemy’s shoes” and “…buy him a drink”. In Uganda, NGOs have bridged the communications gap between government, community members and oil companies, helping to reduce misunderstandings and conflicts and help ensure the oil sector contributes to prosperity and peace.

Rule of law

Businesses can help improve justice mechanisms. In Colombia the rebel group Ejército de Liberación Nacional (ELN) attacked oil pipelines in the 1980s and 1990s to extort money from oil companies. When the latter tried to deal with this through the justice system, they found it corrupted and of no help. So they collaborated with central government to resource a parallel, independent justice task force. This contributed to a drop in ELN attacks on the pipeline and the local population. The Ugandan NGO Advocates Coalition for Development and Environment has supported communities and local governments to use the courts to prevent large scale agricultural economic projects going ahead which risked undermining relations in society, as well as between citizen and state.

Security

All businesses can contribute to improved local security by ensuring their own guards, or any they hire as contractors, or government security services they collaborate with follow human rights norms in line with the international Voluntary Principles for Security and Human Rights. They can also go further, making improved local, human security a specific part of their own planning as a contribution to enhancing the living environment, and design their projects and practices accordingly. Mobile phone companies can ensure they site communications masts to maximise coverage in insecure areas. Government and NGOs are collaborating in Philippines to test new approaches to gun control in areas affected by civil war and criminal violence, aiming to improve people’s safety without undermining the informal economic activities on which many people depend.

The UN Global Commission on Drug Policy’s 2014 report proposes replacing the failed ‘war on drugs’ approach with a global drug policy regime centred on health and safety, with an end to the criminalization and incarceration of drug users together with targeted prevention, harm reduction and treatment strategies for dependent users. It recommends governments regulate drug markets and adapt their enforcement strategies to target only the most violent and disruptive criminal groups rather than punish low level players. This is politically difficult, but an effective illustration of how global policies interact with people’s security, and of how this could be transformed, with sufficient political will.

Infrastructure

In the DRC, NGOs have facilitated discussions and community decision-making to ensure that local infrastructure projects are peace-conducive. On a bigger scale the government of Myanmar has worked with NGOs over the past two years to run participatory consultation processes in designing its Special Economic Zones, so they contribute to economic progress and are socially sustainable. This way of working can lead to multiple outcomes: a better project, more likely to succeed, and a sense of ‘democratic’ participation in a country with little history of that. The Asian Development Bank in Nepal and the World Bank in Sri Lanka and Kyrgyzstan have integrated positive peace analysis and peace objectives into infrastructure projects, typically using them as opportunities to improve local participation in decision-making and governance, as important factors in sustainable peace.

Land and capital

NGOs in the Philippines have supported indigenous communities, settler communities, the government and mining companies to map and plan fairer and clearer access to land in areas where it has been a source of conflict around economic development.

6              Conclusions

The objective of this research was not to evaluate existing initiatives. Given the long-term and non-linear nature of peacebuilding, and the relative newness of economic peacebuilding as a field, it would have been beyond our resources to find and assess examples of successful peacebuilding-through-economic-development approaches which have stood the test of time. But one inescapable finding is that peace is far from being integrated routinely into economic development policies, programmes and projects. The concept of conflict-sensitivity is becoming well-known and taken into account as a mitigation approach. But conflict-sensitivity is usually about mitigating harm. The idea of using economic development as a positive peacebuilding tool remains underused, beyond the simplistic and often wrong-headed notion that ‘economic development is good for peace’.

Those integrating peace into economic development need to understand and deal with tensions and paradoxes. This means navigating a careful course between meeting the needs of incumbents in the political economy, and opening up opportunities to others. It means getting the balance right between short-term and longer term benefits, and between the needs of growth and participation. At times it means balancing starkly different peace and economic development needs, as well as short-term and long-term stability needs. Pathways to peace will often be harder to argue for than economic growth, so navigating these tensions requires analytical and political skill, especially as the pathways to peace relatively indirect and unpredictable.

In the absence of any other practically-oriented framework for analysing how to integrate peace into economic improvement, we have provided one. This aims to simplify and bring together a complex set of issues and integrate peace within a more familiar language of development. It identifies four generic peaceful economy outcomes, recognises the importance of political economy, and above all isolates seven ‘levers of change’ for programming. It is one framework among many which might have served the same purpose, and makes no claim to be more than an accessible starting point. We nevertheless recommend it to economic development promoters in conflict-affected countries as a way to consider how they might contribute to peace – as they have a responsibility to do.

Taking a broad look at economic development in fragile and conflict-affected contexts, we also make the following recommendations to help peace become more effectively and routinely integrated into economic development in fragile contexts:

  • Governments, international agencies, businesses and economic development NGOs in fragile and conflict-affected countries should to integrate contributing to peace into their formal mandates, their economic policies, programmes and projects.
  • This means identifying and seizing opportunities to pull the ‘levers of change’. Some of these are readily available, and any economic development work being planned or done on any of the seven levers of change is potentially an opportunity for peacebuilding.
  • Practitioners should engage in more public discussion, also including academics in fragile and conflict-affected countries about the links between economy and peace, to define what they look like in practice in different contexts, and tease out the opportunities, paradoxes, tensions and overlaps.
  • Researchers should identify how economic interventions have had an impact on peace historically over the longer term, and tease out and share lessons for the present day.
  • International and local peacebuilding experts should do more to make their expertise available to economic development promoters; and the latter should do more to engage with and learn from them in a spirit of joint enterprise and collaboration.
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