The Effects of War and Peace on Foreign Aid

Although the stock market ratified Manley’s shift in policy, going back to the IMF was a difficult pill to swallow, and many accused Manley of abandoning his principles. For example, in her book Reclaiming Development, Kari Levitt writes, “It is one thing to bow down to conditionalities imposed by international financial institutions.... It is quite another to adopt the ideology of the regime change introduced by Thatcher and Reagan.”31

On the last day of July in 1991, Prime Minister Sandiford called an emergency meeting of representatives from Barbados’s trade unions and the private sector. His message was clear: Barbados was in the throes of an unprecedented economic crisis, the government was in discussions with the IMF about how to avert disaster, and Sandiford needed the help of all three parties at the table—employers, the government, and unions. Sandiford told the group that the IMF proposed to provide Barbados with emergency funding, but in return wanted the country to adopt a number of economic reforms, including a devaluation of the currency, the introduction of a stabilization tax to raise revenue, and a reduction in government spending on a range of items from health care and education to various subsidies to the private sector. In lieu of devaluing the currency, the government’s plan to trim the deficit and restore cost competiveness was an 8 percent wage cut for all government employees that would remain in effect for eighteen months, plus a 10 percent reduction in the overall size of the public sector.32

Leadership’s sustained commitment to the future paid great dividends for Barbadian society, but discipline sometimes carries a great personal cost. Just over a year after the signing of the tripartite agreement, the Barbados Labor Party defeated the Democratic Labor Party in the general election of 1994. The DLP did not return to power for fourteen years, and Sandiford, the man who guided Barbados through its worst economic crisis as a sovereign nation, would never again be prime minister. When asked by a journalist whether the sacrifice was worth it, Sandiford replied, “I think that the price that I paid was small in comparison to the good that came to the country.”33

Though a quick glimpse at the news strongly suggests otherwise, the world today may actually be more peaceful than it’s been in a long time. As of 2013 there are 33 ongoing armed conflicts in the world; at the end of the Cold War, just a few decades earlier, there were over 50 conflicts raging across the globe. And, according to Uppsala University’s Conflict Data Program (UCDP), one of the world's most reliable war-tracking organizations, “Conflicts claiming more than 1,000 lives…have declined by more than 50 percent, from 15 in the early 1990s to seven in2013.” 1

Warfare itself has also changed. Most of the world’s current conflicts are no longer between different countries, but within them. 24 of the 33 modern conflicts are considered “intrastate conflicts," a term for “political violence that takes place between armed groups representing the state, and one or more non-state groups.” 2 In short, they are civil wars. The nationalistic, alliance-driven warfare that defined the 20th-century has largely given way to internal battles.

Most of the current fighting is taking place in the developing world. As the main reading in this chapter, “Breaking the Conflict Trap,” explains, this is because “the key root cause of conflict is the failure of economic development.” It follows, then, that the world’s poorest countries have a higher risk of conflict than wealthier ones. A lack of money makes it difficult to create and fund the critical institutions that keep violence in check such as a functioning army and police force, criminal justice system, and a durable political system. Also, citizens in poor countries have less to lose from upheaval, and thus are often more susceptible to recruitment by rebel groups that promise a better future, however unlikely.

There is an additional factor at play. In a cruel twist of fate, it turns out that poor countries that have abundant natural resources are actually more likely to experience conflict than poor countries that don’t. This seems counterintuitive, but it makes sense if you think it through. In developed, well-functioning countries, natural resources provide an economic boost in the form of jobs, increased tax revenue, and expanded national wealth. In nations that are poor or have weak governments, however, natural resources may be more curse than blessing. Because it’s much easier to take control of the resources, there is a much higher likelihood that aspiring rebel groups will attempt to do just that. Resources such as oil, "blood diamonds," and even illegal drugs can be harvested relatively easily, and, of course, have a willing market to sell to around the world. When they are sold, these resources can generate money to fund violent causes like rebellions (or even just drug gangs

Control of natural resources, then, is critical for rebel groups, because it enables them to finance their agenda (whether political, criminal, or otherwise). Even more importantly, natural resources help rebel groups recruit rebel soldiers, who are nearly always impoverished young men. For these men, rebellion offers an economic opportunity and power they have been denied in their regular lives.

Perhaps unsurprisingly, a major risk factor for civil war...is civil war. In other research, Paul Collier—the lead author of “Breaking the Conflict Trap”—calculated that it takes countries emerging from civil war an average of ten years to return their economic growth to its prewar level. 3  Given this correlation between economic growth (or lack thereof) and civil war risk, this is yet another reason to avoid war.

The dilemma poor countries find themselves in could be described as a catch-22: it takes money and security to build institutions and create economic growth, but a lack of economic growth and institutions make this building so difficult. Development experts call this negative, self-reinforcing cycle “the conflict trap.” Without some sort of intervention or peacemaking strategy, unstable countries lurch from disaster to disaster, worse for the wear after every fresh outbreak of hostilities.

The conflict trap is the main focus of this chapter. The works in the chapter take a look at some of the causes and consequences of war, as well as war's effect on development.

Some of the findings in "Breaking the Conflict Trap," such as the fact that civil war negatively affects a country’s economy, seem pretty obvious. Others, such as the discovery that most civil war-related deaths are due to disease—not actual fighting—are perhaps less so. Surprising or not, however, the impacts of civil war are almost always negative. It’s little wonder, then, that the report characterizes civil war as “development in reverse.”

The Ghost City

It seems obvious that war is bad for all the things we call development. But how bad? What happens when a country with a thriving economy and vibrant tourist trade becomes a war zone? Somalia, once known as “the pearl of the Indian Ocean,” puts these questions to the test. Watch the documentary “The Ghost City” before answering the questions below.

  https://youtu.be/Xv72Hh-9Fh0

Breaking the Conflict Trap: Cry Havoc: Why Civil War Matters

CIVIL WAR DIFFERS RADICALLY FROM BOTH International war and communal violence. Unlike international war, it is fought outside any structure of rules and entirely within the territory of the society. Unlike communal violence, it implies a rebel organization equipped with armaments and staffed with full-time recruits. Such rebel armies usually have little option but to live off the land. These features typically escalate the social costs of civil war above the costs of either international war or communal violence. For example, the same conflict between Eritrea and Ethiopia generated both a civil war and, following Eritrean independence, an international war. As a civil war the conflict lasted for 30 years and was ended only by military victory. As an international war the conflict was subject to the fullpanoply of international mediation and ended swiftly in a negotiated settlement. To analyze civil war we need to know what we mean by it. We adopt a precise but conventional definition: civil war occurs when an identifiable rebel organization challenges the government militarily and the resulting violence results in more than 1,000 combat-related deaths, with at least 5 percent on each side. There are many other forms of group violence, such as protests, riots, and pogroms, but we do not consider them here.

The perpetrators of civil war usually adopt the rhetoric that the war is a necessary catalyst for social progress. Occasionally this is right, but more typically war is an economic and social disaster for the affected country. Therefore, for those who care about development, civil war is a major problem. This is the focus of chapter 1: a theme of the chapter is that civilians, not the active combatants, suffer the main adverse consequences of civil war, and that many of these consequences accrue long after the war is over. Hence the people who determine whether war occurs are likely to ignore much of its adverse consequences. Furthermore, civil war has severe consequences that spill over regionally and globally, and civil war is not just a problem for the countries directly affected. Thus the attitude “let them fight it out among themselves” is not just heartless, it is foolish.

During a civil war a society diverts some of its resources from productive activities to violence. As a result, the society loses twice over. The diverted resources are lost to productive activity, analogous to the loss from what economists call rent-seeking. Because much of the increase in military spending is on government forces paid for out of the government budget, resources are disproportionately diverted from government provision of useful public goods, such as health care and policing. However, whereas rent-seeking activities are simply unproductive, the increase in violence is harmful. One part of society is producing while another part is destroying.

Most of the costs of civil war accrue from these destructive activities. The power of the gun displaces civil rights. Men with guns, from both rebel and government forces, can steal, rape, and murder with impunity. Behind this veil of havoc, the localized collapse of order extends impunity to criminal and other antisocial behavior. The primary response to the fear of theft, rape, and murder is flight. People try to shift their assets to safety, and they themselves flee. This flight in turn creates massive problems, especially for health, as people are pushed into areas where they lack immunity to disease. They then carry these diseases with them, infecting host populations.

Breaking the Conflict Trap: Civil War as Development in Reverse

DURING A CIVIL WAR A SOCIETY DIVERTS some of its resources from productive activities to destruction. This causes a double loss: the loss from what the resources were previously contributing and the loss from the damage that they now inflict (Figure 2).

Figure 2

GDP Per Capita Before and After Civil War

The first loss can to some extent be quantified, as governments increase their military expenditure during civil war, and this directly reduces economic growth. During peacetime the average developing country, defined as a country with less than US$3,000 per capita gross domestic product (GDP) in 1995, spends about 2.8 percent of GDP on the military. During civil war, on average, this increases to 5 percent. This is likely to cause a decrease in other public expenditures such as those on infrastructure and health. The decrease in the supply of such public goods has consequences for incomes and social indicators, and here we focus on the effects on income. Before taking any of the destructive effects of military activity into account, we can estimate its consequences for crowding out productive expenditures. Knight, Loayza, and Villanueva (1996) quantify the costs to growth of military spending during peacetime. Their simulations suggest that the additional 2.2 percent of GDP spent on the military, sustained over the seven years that is the length of the typical conflict, would lead to a permanent loss of around 2 percent of GDP. Of course, the increase in government military spending is only part of the diversion of resources into violence. The resources rebel groups control are also a diversion from productive activities.

However, the main economic losses from civil war arise not from the waste constituted by diverting resources from production, but from the damage that the diverted resources do when they are used for violence. The most obvious cost arises from the direct destruction of infrastructure. During the war rebel forces target physical infrastructure as part of their strategy. The main targets are the enemy’s communication and support lines, such as telecommunications, airports, ports, roads, and bridges. In addition to this strategic destruction of key infrastructure, rebels and government soldiers loot and destroy housing, schools, and health facilities. An example is Mozambique (Brück 2001), where about 40 percent ofimmobile capital in the agriculture, communications, and administrative sectors was destroyed. The prewar transport system had been a large foreign income earner, as goods were transported from and to the neighboring states of Malawi, South Africa, Swaziland, and Zimbabwe, but 208 out of 222 units of rolling stockwere lost or badly damaged between 1982 and 1989. Similarly, during the war in Liberia in the mid-1990s all major infrastructures were damaged and looted. Monrovia, the largest port, suffered major damage during the first few months of the war, most of the electricity generating capacity of the Liberian Electricity Corporation was destroyed, and looting removed much of the distribution and transmission systems. Infrastructure is an important determinant of economic growth (Canning 1998), and so destruction of infrastructure on such a scale is bound to reduce incomes.

Probably a more substantial cost arises from the fear that violence inevitably generates. Frightened people flee from their homes. They also tend to lose the few assets they possess. For example, in a survey of households in Uganda, Matovu and Stewart (2001) found that two-thirds of respondents had lost all their assets. Their houses were bombed or unroofed; their household belongings, such as bicycles and furniture, were looted; and their cattle were stolen by soldiers. In Mozambique less than a fifth of the recorded 1980 cattle stock remained by 1992. Cattle were lost because of direct rebel activity, that is, rebels stole them to feed their troops and killed them to spread terror, and because of indirect effects of warfare, namely, a lack of feed and veterinary attention during the war. Faced with the prospect of such losses, people try to protect their assets by shifting wealth abroad (Collier, Hoeffler, and Pattillo 2002). Prior to conflict the typical civil war country held 9 percent of its private wealth abroad. By the end of the civil war this had risen to an astonishing 20 percent, so that more than a 10th of the private capital stock had been shifted abroad. Even this probably underestimates the extent of overall capital flight, for example, cattle may be moved to neighboring countries and sold.

The disruption of civil war shortens time horizons and the displacement severs family and community links. Both weaken the constraints on opportunistic and criminal behavior. For example, during the Russian civil war of 1920 the town of Nikolaev was in limbo between White and Red occupation for two days. During those two days local crooks chopped down all the trees lining the main avenue and stole the wood (Figes 1996). During the Rwandan genocide of 1994, those with assets faced a greater risk of being murdered (Andre and Platteau 1998). Colletta and Cullen (2000) analyze the relationship between violent conflict and the transformation of social capital using four case studies: Cambodia, Guatemala, Rwanda, and Somalia (see box 1.1). In response to heightened opportunism and uncertainty, people invest less and retreat into those subsistence activities that are less vulnerable. For example, in Uganda during the long period of social chaos the share of the subsistence sector increased from 20 percent of GDP to 36 percent.

Investigators have used both econometrics and case studies to estimate the overall effect of civil war on the economy. An econometric study finds that during civil war countries tend to grow around 2.2 percentage points more slowly than during peace (Collier 1999). Hence after a typical civil war of seven years duration, incomes would be around 15 percent lower than had the war not happened, implying an approximately 30 percent increase in the incidence of absolute poverty. The cumulative loss of income during the war would be equal to around 60 percent of a year’s GDP. Note that this is much larger than the loss directly caused by the resources wasted on extra government military spending, which suggests that most of the costs of war are due to the adverse effects of violence rather than simply to the waste of resources. Stewart, Huang, and Wang (2001) survey data from about 18 countries affected by civil war. For the 14 countries whose average growth rates of gross national product per capita could be calculated, the average annual growth rate was negative, at –3.3 percent. Furthermore, they found that a wide range ofmacroeconomic indicators worsened during the conflict: in 15 countries per capita income fell, in 13 countries food production dropped, in all 18 economies theirexternal debt increased as a percentage of GDP, and in 12 countries export growth declined.

Social Costs

The most direct human effects of civil war are fatalities and population displacements. In the modern civil war the composition of victims differs radically from the wars of the early 20th century, in that the impact has shifted from military personnel to civilians. At the beginning of the 20th century about 90 percent of the victims were soldiers, but by the 1990s nearly 90 percent of the casualties resulting from armed conflict were civilian (Cairns 1997).

To some extent the rise in civilian casualties is a consequence of new military practices. Rebel recruitment strategies are now commonly coercive, so people flee to avoid recruitment. For example, in response to a recent rebel attack in rural Nepal, “About 35,000 people (out of a population of 75,000) have left the district, mainly young men moving to India to avoid being forcibly recruited by the Maoists” (Holt 2003, p. 23). Furthermore, the military sometimes deliberately targets civilians to create forced migration. Azam and Hoeffler (2002) analyze the different motives for targeting civilians in internal wars. On the one hand, soldiers may terrorize civilians because they need loot to augment their resources. An alternative hypothesis suggests that terrorizing the civilian population plays a direct military role. Using cross-country data from Sub-Saharan Africa they find support for the latter hypothesis. Civilians are targeted mainly because the displacement of large fractions of the civilian population reduces the fighting efficiency of the enemy, as they cannot hide and obtain support as easily.

Forced migration broadly consists of two groups: refugees and internally displaced persons (IDPs). The United Nations High Commission for Refugees (UNHCR)provides data on “people of concern,” that is, people who received assistance from the organization. Approximately 86 percent of people of concern are refugees and IDPs. In 2001 the UNHCR assisted about 12 million refugees and about 5.3 million IDPs worldwide (Figure 3).

Legacy Effects of Civil War

TO THE EXTENT THAT CIVIL WAR HAS A POLITICAL RATIONALE it is as a catalyst for social progress. A rebel leader might honorably accept the terrible costs incurred during war as a high but necessary price to pay for future improvements, but far from being a catalyst for beneficial change, civil war typically leaves a persisting legacy of poverty and misery.

Economic and Political Legacy

Several of the adverse economic effects of civil war are highly persistent. Recall that during civil war military expenditure rises as a percentage of GDP from 2.8 to 5.0 percent; however, once the war has ended, military expenditure does not return to its former level. During the first postconflict decade the average country spends 4.5 percent of GDP on the military. The government often presents the modest reduction in military spending from its wartime level as a peace dividend, but a more accurate way of viewing postconflict military spending is to see it as a major hidden cost of conflict, hidden because abnormally inflated military spending persists long after the conflict is over. Cumulatively over the first decade of peace some 17 percent of a year’s GDP is lost in increased military spending. This is far from being the only postconflict cost of war, but alone it is substantial: during the typical conflict the total income loss cumulates to around 60 percent of a year’s GDP.

A second cost during conflict is capital flight. Recall that during war capital flight increases from 9 percent of private wealth to 20 percent. By the end of the first decade of postconflict peace capital flight has risen further to 26.1 percent. Far from realizing a peace dividend here, the country experiences a war overhang effect. A possible reason for this is that asset portfolios can only be adjusted gradually, so that even by the end of a war the typical portfolio may not have fully adjusted to the political uncertainty created by the war. Once a country has experienced a civil war it is much more likely to see further conflict, so that even though peace is an improvement, risk levels do not return to their preconflict level. Thus even once peace has returned, people may still wish to move more of their assets abroad. Capital repatriation requires more than just peace. The same is true, only much more powerfully, for human flight. Civil war gives a big impetus to emigration, but some of these emigrants, especially those in industrial countries, then provide a postconflict channel for further emigration.

A third persistent adverse legacy is the loss of social capital. Civil war can have the effect of switching behavior from an equilibrium in which there is an expectation of honesty to one in which there is an expectation of corruption. Once a reputation for honesty has been lost, the incentive for honest behavior in the future is greatly weakened. Clearly civil war is not the only way in which a society can become corrupted, but the point is that the costs inflicted by corruption are likely to persist long after the conflict is over.

For civil war to have some redeeming features, the most hopeful areas would be policies, political institutions, and human rights. The impact of civil war on each of these can, to an extent, be measured. With respect to policy we use a measure adopted by the World Bank, the country policy and institutional assessment (CPIA). The CPIA is an assessment on a 5-point scale of economic policy in four areas—macro-economic, structural, social, and public sector management—with a higher score indicating better policies. While what constitutes “good” policies can be controversial, consensus on the recognition of bad policies is wider, and, unfortunately, civil war countries tend to be at this end of the spectrum. Those low-income countries that are neither at war nor in the first decade of postwar peace have, on average, a CPIA score of 2.75. For those countries that have had a civil war and reestablished peace, we can track whether the war served as a catalyst for improvement. On average, during the last five years prior to war the CPIA for these countries was 2.56. During the first postconflict decade it averaged only 2.29. Although the numbers are close together, they actually reflect a substantial deterioration in policies. All four policy areas are worse in postconflict societies: their macroeconomies are less stable, their structural policies such as trade and infrastructure are less conducive to growth, their social policies are less inclusive, and their public sectors are less well managed. Civil war is thus not normally a catalyst for policy improvement, but rather for policy deterioration.

Social Legacy

Civil War Increases Mortality Rates. Mortality rates only capture one dimension of the human consequences of conflict; however, they are a useful summary measure of the crisis and its impact. Mortality estimates can be highly inaccurate, but they are often better and more easily captured than other health indicators, which may be subject to different definitions and cultural interpretations (Keely, Reed, and Waldman 2000). Other human damage as a consequence of conflict includes morbidity and psychological effects, but mortality rates have been one of the most easily and accurately measured indicators in emergency settings.

The long-term effect of civil war on mortality can be investigated using both econometrics and case studies. A new econometric study investigates the effect on infant mortality (Hoeffler and Reynal-Querol 2003). Unsurprisingly, the mortality effect depends on the duration of the conflict. Considering a typical five-year war, the study finds that infant mortality increases by 13 percent during such a war; however, this effect is persistent, and in the first five years of postconflict peace the infant mortality rate remains 11 percent higher than the baseline.

Guha-Sapir and Van Panhuis (2002) collected intensive case study data on mortality rates following civil conflicts. They find that the impact on adult mortality is generally even worse than that on infant mortality (Figure 4). The numbers indicate the percentage change in deaths per month from before the war for children under five years old and for the rest of the population. The figure compares the mortality rates of refugees and IDPs with the mortality rate of the country in the year before the conflict started (the baseline year). Among the cases listed in the table, 60 percent of the cases refer to refugees, 20 percent to IDPs, and 20 percent to residents of the country. Mortality rates were higher after conflict than before. While the rise in adult mortality might be expected to have occurred because of adults’ greater exposure to the risk of combat death, few of these adult deaths are directly combat related. A comparison of these increases in mortality with the estimates of deaths as a direct result of combat reveals that the death of combatants is only a minor component of the overall rise in mortality. These numbers suggest that civil wars kill far more civilians even after the conflict is over than they kill combatants during the conflict.

Figure 4

Increase in Mortality Rates Due to Civil War

Why are these health effects of civil wars so persistent? They affect people through the following two main channels (Ghobarah, Huth, and Russett 2003):

· Channel 1: “technical regress,” that is, changes in living conditions make staying healthy more difficult. Civil wars raise the exposure of the civilian population to conditions that increase the risk of disease, injury, and death.

· Channel 2: the government has less money in the budget to spend on public health. Civil wars produce longer-term negative consequences for public health by reducing the pool of available financial resources for expenditures on the health care system.

Ghobarah, Huth, and Russett (2003) find that infectious diseases are the most important cause of the indirect deaths of civil war. Of these malaria is the most important, and the evidence suggests that all the age groups under 60 are affected by malaria.

Conclusion

THIS CHAPTER HAS FOCUSED ONLY ON THE EFFECTS OF CIVIL war within the affected country and has clearly shown that most of the suffering inflicted by civil war accrues to noncombatants who typically have no say in either whether the conflict is initiated or whether it is settled.

During the war income losses are severe and mortality and morbidity exhibit large increases. Even if a war is viewed as a costly investment for subsequent social progress, the costs during the conflict are typically so high that postconflict progress would need to be dramatic for subsequent benefits to outweigh these costs. Yet the legacy effects of civil war are usually so adverse that they cannot reasonably be viewed as social progress. Many of the costs of the war continue to accrue long after it is over. For example, the country tends to get locked into persistently high levels of military expenditure, sees capital continuing to flow out of the country at an unusually high rate, and faces a much higher incidence of infectious disease. Even economic policies, political institutions, and political freedom appear to deteriorate. Hence most modern civil wars are not remotely like the 19th century American civil war that ended slavery. Of course, finding some modern civil wars that can reasonably be seen as ushering in social progress is always possible, but these are surely the exceptions. On average, modern civil war has not been a useful force for social change, but has been development in reverse.

Breaking the Conflict Trap: What Makes a Country Prone to Civil War?

CIVIL WAR IS FUELED PARTLY BY THE circumstances that account for the initial resort to large-scale organized violence, and partly by forces generated once violence has started and that tend to perpetuate it. We refer to the initial circumstances as the root causes and to the perpetuating forces as the conflict trap.

Most people think that they already know the root causes of civil war. Those on the political right tend to assume that it is due to long-standing ethnic and religious hatreds, those in the political center tend to assume that it is due to a lack of democracy and that violence occurs where opportunities for the peaceful resolution of political disputes are lacking, and those on the political left tend to assume that it is due to economic inequalities or to a deep-rooted legacy of colonialism. None of these explanations sits comfortably with the statistical evidence. Empirically, the most striking pattern is that civil war is heavily concentrated in the poorest countries. War causes poverty, but the more important reason for the concentration is that poverty increases the likelihood of civil war. Thus our central argument can be stated briefly: the key root cause of conflict is the failure of economic development. Countries with low, stagnant, and unequally distributed per capita incomes that have remained dependent on primary commodities for their exports face dangerously high risks of prolonged conflict. In the absence of economic development neither good political institutions, nor ethnic and religious homogeneity, nor high military spending provide significant defenses against large-scale violence. Once a country has stumbled into conflict powerful forces—the conflict trap—tend to lock it into a syndrome of further conflict.

Each war is distinctive, with its own particular personalities, events, and antecedents. Any all-embracing, general theory of civil war would therefore be patently ridiculous, and sensibly enough most analyses are country-specific, historical accounts. However, when we pan back from the particular patterns emerge, some of them surprisingly strong, which suggests that some characteristics tend to make a country more or less prone to civil war. This chapter summarizes the evidence on these statistical patterns based on global experience since the 1960s. We abstract from triggering events: the day by day political and military changes that usher in war. Our focus is on a country’s longer-term social, economic, and institutional features. Recall that we are using a precise definition of civil war that excludes several other forms of violence: civil war occurs when an identifiable rebel organization challenges the government militarily and the resulting violence results in more than 1,000 combat-related deaths, with at least 5 percent on each side.

Statistical patterns are useful in that they can suggest policies that might typically work in particular situations. They can also defend us from the temptation to overgeneralize from particular conflicts and from the tendency to pick out from the multiplicity of possible causes that which conforms with the beliefs of the researcher. We will see that the large differences in proneness to conflict reflect the conjunction of several risk factors. In this sense, a conflict will usually have multiple causes.

Patterns, however, are only a supplement to analysis, not a substitute for it. Patterns come about because of behavior. Civil war occurs if a group of people forms a private military organization that attacks government forces and ordinary civilians on a large scale and with a degree of persistence. The typical such organization has between 500 and 5,000 members, although a few, such as theSudanese People’s Liberation Army , range up to 150,000 (table 3.1). Globally, such organizations are rare, but they are relatively common in extremely poor countries. To understand the root causes of civil war we need to understand the formation of these private military organizations. Why are such groups formed, that is, what are their motives? How are they formed, that is, what are their opportunities?

Understanding Rebellion

REBEL LEADERS USUALLY PROCLAIM SOME NARRATIVE OF grievances against the government, that is, they are usually at least in part leaders of political organizations pursuing objectives of political change. While this is evidently an element in their formation, political opposition to governments is not usually conducted through military organizations. The normal vehicles for political opposition are political parties and protest movements. These are quite differently structured from a private military organization.

Most political opposition is somewhat democratic and participatory, whether structured political parties, such as the African National Congress during the apartheid era in South Africa and the Movement for Democratic Change in present-day Zimbabwe, or unstructured, non-hierarchical protest movements, such as the revolutions that overthrew the communist dictatorships in Eastern Europe. By contrast, a private military organization is typically small and highly hierarchical, with power concentrated at the top of the organization, often in a single charismatic leader, with a high degree of discipline and severe punishment for dissent.

Furthermore, most political opposition does not require substantial finance for the organization to be effective. Most participation is voluntary and part-time, and activities do not require a lot of expensive in-puts. By contrast, a private military organization is a costly operation. It must meet a payroll, because most members are full-time and therefore dependent on the organization for their material needs, and it must be able to purchase a good deal of imported military equipment.

Thus as well as being a political organization, a private military organization is an army and a business. Those analyzing rebel groups must always keep this triple feature—political organization, military organization, and business organization—in mind. Rebellions occur predominantly in countries where circumstances are conducive to all three features. So what are the features conducive to each aspect of a successful rebel organization?

Rebel Groups as Political Organizations

Like all political organizations, a rebellion thrives on group grievances; however, political organizations opposing the government are found in virtually all societies. Even in societies where group grievances are relatively modest, as in the high-income societies where income is equally distributed, vigorous mass opposition parties exist. Political grievances and the political conflict they generate are universal. If the main impetus for rebel groups is the representation of political grievances, then the obvious question is why does political organization take the unusual form of small, hierarchical, violent rebellion rather than the more conventional forms of mass parties or mass protest?

Why Are so Many Rebellions Ethnic?

An important circumstance in which ethnic differentiation can appear to be the cause of rebellion is if a country discovers a valuable natural resource such as oil. Natural resources are seldom found uniformly distributed over the entire country, but are usually concentrated in a particular part of it. The issue then arises as to who owns the resources, the whole nation or the lucky locality. The inhabitants of the lucky locality have an obvious interest in seceding from the rest of the nation and keeping the wealth for themselves. In all societies locality is one aspect of people’s identity, and in ethnically differentiated societies ethnicity can be used to reinforce this sense of local identity. In most societies, wherever valuable resources are discovered some particular ethnic group is likely to be living on top of them that then has an incentive to assert its rights to secede. All ethnically differentiated societies have a few ethnic romantics who dream of creating an ethnically “pure” political entity, but resource discoveries have the potential to shift such movements from the margin of romanticism to the core agenda of economic self-interest. Take, for example, the politics of oil in the United Kingdom. Oil was discovered off the shores of Scotland during the 1960s, but it first became really valuable in 1973 when its price quadrupled. The following year the tiny Scottish Nationalist Party, which had only one seat in parliament, launched the “it’s Scotland’s oil” campaign, and gained 30 percent of the Scottish vote (Collier and Hoeffler 2003).

Statistically, secessionist rebellions are considerably more likely if the country has valuable natural resources, with oil being particularly potent (Figure 5). Examples of this sort of secessionist movement are Cabinda in Angola, Katanga in the then Congo, Aceh and West Papua in Indonesia, and Biafra in Nigeria. Some evidence suggests that rebel leaders massively exaggerate the likely gains from capturing ownership of the resources. Partly this exaggeration is strategic: the leaders of secessionist movements are often ethnic romantics who simply use the resource issue opportunistically to reinforce their support. Party leaders may themselves succumb to the glamour of natural resources and overestimate the likely gains. For example, leaders of the Gerekan Aceh Merdeka (the Aceh Freedom Movement or GAM) rebellion in Aceh told the local population that secession would raise their incomes to the level of Brunei’s, a more than 10-fold exaggeration. Although such natural resource secessions are ethnically patterned and deploy the language of historic ethnic grievances, regarding their root cause as ethnicity is surely naïve (see Ross 2002b for a detailed discussion of the civil war in Indonesia).

In many developing countries the government is unwilling to meet such demands for secession, even if a majority of the locality supports it. Indeed, strong ethical arguments can be made against secession. For example, the influential theory of justice proposed by Rawls (1971) asks us to imagine making our choices behind a veil of ignorance: would the secession still be as well supported if the local population did not know in what region of the country the resources were located? The government has a legitimate interest in retaining these resources for use by the poorer majority rather than permitting them to be expropriated to create a small, rich group. The local demand may well be rational, but were such demands met, the world would become more unequal. A more legitimate demand would be that the resources should indeed be used for the poor majority rather than for a small elite. In many countries natural resources have been associated with elite corruption. For example, the International Monetary Fund (IMF) has recently reported that more than US$1 billion per year of Angolan oil revenues have been misappropriated, with large sums being paid directly into offshore bank accounts. Where a region sees a corrupt national elite stealing “its” resources, secessionist pressures are surely more likely.

Another reason why rebel leaders promote ethnic grievances so prominently is that they are a plausible and legitimate smokescreen for less reputable agendas. The discourse of grievances articulated by rebel groups cannot necessarily be trusted. As with all political movements, the rebel organization needs to emphasize grievances, and if necessary it will attempt to exaggerate them or to disguise its true interests in terms of more populist ones. For example, a violent attempted coup d’état in Fiji appeared at first sight to be motivated by the interests of the indigenous ethnic group. It turned out, however, that the leader of the coup attempt was a businessman who had been seeking a timber concession for the private American company he was representing. When the government awarded the contract to a public agency instead, he launched the coup. The coup’s rallying cry of “power to indigenous people” was undoubtedly more appealing, but perhaps less accurate, than had it been “give the timber contract to the Americans.” Similarly, the litany of grievances proclaimed by the Revolutionary United Front(RUF) in Sierra Leone eventually led to the offer of a settlement by the government in which the rebel leader, Foday Sankoh, would become vice president of the country. Sankoh refused this offer and instead demanded political control of the diamond trade. When he was offered this he accepted the peace settlement. As with most conflicts, that in Sierra Leone had multiple causes, including a history of clientalist politics. Natural resources are seldom the entire story behind a conflict, but they have the potential to compound other problems and make them unmanageable.

Risk of Civil Wars from Natural Resources Endowment

Figure 6

Natural Resources and the Risk of Civil War for Low-Income Countries

Recruiting a Private Army

In terms of recruitment rebel groups usually look much more like an army than a political movement. First, the actual numbers of people involved in rebel activities are usually only a tiny proportion of the society. “Given the right environmental conditions, insurgencies can thrive on the basis of small numbers of rebels without strong, widespread, freely-granted, popular support rooted in grievances and, hence, even in democracies” (Fearon and Laitin 2003, p. 81). Even a relatively large rebel group such as the Fuerzas armadas revolucionarias colombianas (the People’s Army or FARC) in Colombia is recruiting less than 1 Colombian in 2,000.

Second, the people who join rebel groups are overwhelmingly young, uneducated males. For this group objectively observed grievances might count for relatively little. Rather, they may be disproportionately drawn from those easily manipulated by propaganda and who find the power that comes from the possession and use of a gun alluring. Social psychologists find that around 3 percent of the population has psychopathic tendencies and actually enjoys violence against others (Pinker 2002), and this is more than is needed to equip a rebel group with recruits. 5  In Nigeria’s Maitatsine region, a rebel movement was created in the 1980s by a “prophetic” leader, Marwa, who recruited 8,000 to 12,000 members. Ideological indoctrination and religious teaching were targeted on the homeless and refugees. Their insurgency caused around 5,000 deaths (Zinn 2002).

Third, as chapter 1 noted, a seemingly paradoxical, yet common, motivation for recruitment is safety. Compared with the starvation and disease facing the thousands of people displaced from their homes, the organized facilities of a rebel group provide a haven.

Fourth, many rebel movement “recruits” do not volunteer; for example, around 80 percent of Resistência Nacional Moçambicana (RENAMO) recruits were coerced. One standard technique is to kidnap recruits and then force them to commit atrocities in their home areas, thereby reducing their incentive to escape. Another technique, which the RUF in Sierra Leone adopted, was to target drug addicts on the grounds that such recruits would be easier to control. A further widespread technique is to recruit children. Children are attractive to rebel groups because they are cheap and have little regard for their own safety. For example, in Burundi rebel groups recruited children by force, purchasing Kenyan street children at the price of US$500 for 150 boys (Ngaruko and Nkurunziza 2002). Obviously children do not join rebellions because of objective social grievances.

Even where rebel groups do rely upon grievances for recruitment, they sometimes exploit them. A technique common to several groups is to target people whose parents were victims of previous government atrocities. The recruiter pretends to know who on the government side committed the atrocity and offers the opportunity for revenge (Ross, 2002b).

Recruits frequently desert. In the largest civil war of the 20th century, Russia in 1919–21, around 4 million men deserted from the Red and White Armies. The desertion rate was 10 times greater in summer than in winter, because most recruits were peasants whose time was much more valuable during the harvest season (Figes 1996).

What Sorts of Commercial Enterprises Do Rebel Groups Engage In?

Most successful rebel organizations now rely substantially on generating finance by running businesses alongside their military and political activities. The question then becomes in what types of business activities are rebel organizations likely to be competitive? Unfortunately, the obvious answer is that rebel groups have only one competitive advantage, namely, their possession of an usually large capacity for violence. Thus the business activities to which they are well suited are various forms of extortion rackets or activities that only require military control over a limited territory. These business activities are most commonly associated with the extraction of natural resources, and civil wars occur disproportionally in countries with extensive dependence on natural resources (Figure 6).

Recall that for military reasons rebel groups will tend to locate in rural areas. Most rural areas are poor. Obviously extortion rackets only work if there is something to extort, and this constitutes a major limitation on rebel activity: extremely poor areas are not well suited to extortion, and so tend to be unsuited for rebellion. 6 However, a minority of rural areas are well suited to extortion, namely, if they are producing primary commodities with high economic rents. Such commodities are generally for export, and the largest rents are usually from the extraction of natural resource wealth. Where such activities are under way, for rebel groups to run an extortion racket that involves charging producers for protection is a relatively simple matter. The best known example is diamonds in Angola and Sierra Leone. Alluvial diamonds are particularly well suited to rebel groups because the technology is so simple that the organization can directly enter the extraction process. Similarly, timber felling is a simple technology.

However, high-value agricultural exports are also sometimes a target for rebel extortion. Here the rebel group does not produce the crop itself, but levies informal taxes on production. The most spectacular example is illegal drugs, which because of their illegality are extremely valuable. Current global policy on drugs implies that drugs can only be grown on territory outside the control of a recognized government. Those rebel groups that control territory on which drugs can be grown can therefore charge large rents to producers. For example, when the U.S. government ceased to fund the mujahideen in Afghanistan, the group shifted into drug production. Similarly, estimates indicate that FARC in Colombia generates around US$500 million per year from its control of drug cultivation. Even lower-value export crops are sometimes the target of rebel extortion rackets. For example, the RUF in Sierra Leone started by levying informal taxes on coffee, and only shifted its activities to the diamond areas once it had become established.

Some extractive industries require technology that is too sophisticated for rebel groups and requires multinational corporations (MNCs), but this does not prevent extortion. Rebel groups can target MNCs by threatening expensive infrastructure. The classic infrastructure target is a pipeline: typically oil companies pay protection money to “violence entrepreneurs” in local communities. Such entrepreneurs sometimes fight among themselves for the right to extort. For example, in the delta region of Nigeria violence entrepreneurs from rival villages on either side of a new Shell pumping station recently fought it out for the extortion rights, resulting in 75 deaths. Violence in the Nigerian delta began in the mid-1990s at a modest level. It was essentially political, being directed against a military government. Despite democratization, the violence has escalated sharply, but has been transformed into something more akin to American gangland fights for control of the drug trade.

A particularly remarkable recent development is for rebel groups to raise finance by selling the advance rights to the extraction of minerals that they currently do not control, but which they propose to control by purchasing armaments financed through the sale of the extraction rights. Kabila, subsequently president of the Democratic Republic of Congo, reportedly raised several million dollars from Zimbabwean commercial interests in return for extraction contracts before launching his successful assault on Kinshasa (Graduate Institute of International Studies 2001). Similarly Denis Sassou-Nguesso, subsequently president of the Republic of Congo, reportedly sold extraction rights to help finance his military bid for power.

Breaking the Conflict Trap: The Conflict Trap

ONCE A REBELLION HAS STARTED IT APPEARS TO DEVELOP A momentum of its own. Getting back to peace is hard, and even when peace is re-established, it is often fragile.

Reverting to War

The typical country reaching the end of a civil war faces around a 44 percent risk of returning to conflict within five years (Figure 7). One reason for this high risk is that the same factors that caused the initial war are usually still present. If before a war a country had low average income, rural areas well endowed with natural resources, a hostile neighbor, and a large diaspora, after the war it is still likely to have these characteristics. Some countries are intrinsically prone to civil war by virtue of their geography and economic structure, so that as the government settles with one rebel group another is likely to emerge. We would expect a country such as Colombia, with mountains, forests, and a lot of sparsely populated territory, to have a persistently higher incidence of civil war than, say, the Netherlands.

This is indeed part of the explanation for the persistence of civil war. For example, countries that go into civil war tend to have much lower incomes than other countries. This low income tends to make the conflict last a long time and to make the country more likely to have a further conflict once it has reached peace. However, another possibility is that a high degree of conflict persistence arises because of a vicious circle of civil war. We now explore various ways in which conflict in one period may increase the risks of subsequent conflict.

and Just After War

War Reverses Development

The most obvious way in which conflict has a feedback loop is that civil war interrupts, and indeed reverses, economic development. As chapter 1 showed, during a civil war a country loses, on average, around 2.2 percentage points off its normal annual growth rate. Because the average civil war lasts around seven years, by the end of the war per capita income is around 15 percent lower than it would otherwise have been. Our previous analysis indicates that this will raise the long-term incidence of conflict for the country both by increasing its risk of further rebellion and by increasing the duration of rebellion should one occur. For the typical country experiencing a civil war, this effect of the war would increase the risk by 13.5 percent and the duration by 5.9 percent, so that the long-term incidence would rise by 16.9 percent. 7

A related feedback loop works through the effect of conflict on the structure of the economy. Natural resource exports are relatively robust in the face of conflict, because of the high rents normally involved in their production and their relative independence of inputs from the rest of the economy. By contrast, more sophisticated exports are typically low-margin and dependent on a fragile network of business interdependencies, and these tend to get severely disrupted by the war. Furthermore, economic policy and institutions deteriorate significantly during civil war, and this takes time to put right. Studies show that diversification out of primary commodity dependence is influenced both by the level of income and by policies and institutions (Collier and Hoeffler 2002b). Thus as policies, institutions, and income all deteriorate during war and take a long time to rectify, for a much longer period than the war itself the country will find itself trapped into dependence on primary commodities. This in turn will increase the risk of further conflict.

Conclusion

THE INTERPRETATIONS OF CIVIL WAR THAT HAVE BEEN MOST common in industrial countries either treat them as wholly an outcome of primordial ethnic and religious hatreds or force them into the familiar framework of Western politics. Rebel leaders have learnt to play up to these images of their organizations, raising money from ethnic diasporas while styling themselves as heroic political leaders. Another tempting framework, favored by economists, is to see rebel leaders as being at the apex of organized crime, enriching themselves from massive protection rackets at the expense of the wider society. The recent prominence of so-called “conflict diamonds” has increased popular awareness of this darker side of rebellion. Both these interpretations miss the reality of many rebellions; that is, even though rebel leaders are indeed violence entrepreneurs heading private military organizations that run protection rackets, they usually have some political agenda. However, they are not conventional political leaders in that they have chosen not to lead normal political movements.

Motivations—grievances and greed—are obviously part of the explanation for rebellion, but if we focus exclusively on motivation we rapidly encounter a paradox. In many situations of the most grievous injustice, both currently and historically, rebellion does not occur. Highly repressive societies often fail to trigger civil war, such as Iraq and the Democratic People’s Republic of Korea. Highly unequal societies often fail to trigger civil war, such as Chile and Kenya. Extreme cases of ethnic abuses of power have often failed to trigger civil war, such as white domination in South Africa, and, delving back into history, Norman domination in England, although some forms of ethnic political exclusion do appear to increase the risk of war. Greed perhaps fares a little better as an explanation, as secessionist rebellions seem to be linked to the desire to appropriate valuable resources and some rebel leaders appear more committed to a personal than to a social agenda; however, even greed does not seem to get us very far, because states with large aid inflows are much more attractive to capture, but they do not face any greater risk of rebellion.

While the literature that tries to explain civil war has focused overwhelmingly on motivation, we also need to note that the circumstances in which rebel groups are militarily and financially viable are relatively rare. Hirshleifer (2001) has put forward a depressing proposition, the Machiavelli theorem, whereby no advantageous opportunity to exploit someone will be missed. Even though many rebellions are not motivated by the desire to exploit someone, a closely analogous proposition may be fairly accurate: no militarily and financially viable opportunity to promote a political agenda by rebellion will be missed. If a neighboring government is sufficiently hostile and the circumstances are propitious, it will seek out and promote a local violence entrepreneur. If resource-extracting MNCs offer sufficiently easy pickings in unprotected rural areas, local violence entrepreneurs will set up rudimentary protection rackets loosely linked to political demands. In such circumstances the ostensible grievance might be any of a wide range of things: grievances are not in short supply.

Globally, one of the largest mass political protests of recent years, which brought more than 400,000 people onto the streets of London, was to defend the right to hunt foxes. The typical rebel group does not need a cause that attracts anything like this level of support: a few hundred or a few thousand people will suffice to reach the level of violence that constitutes civil war. Thus most societies probably have several issues on which it is possible to find a small core of people who feel passionate and who are not averse to violence. Identifiable political groups have perpetrated violence in France (Breton separatists), the United Kingdom (animal rights activists), and the United States (anti-abortion activists), and political assassinations have occurred in Italy, the Netherlands, and Sweden. Hence most societies have the political potential for violence. Whether such violence remains peripheral, as in the foregoing examples, or becomes large enough to generate wide-spread death and destruction, may depend as much upon whether an illegal, private, military organization is militarily and financially viable as upon the political issue itself.

Obviously governments should address justified grievances, whether or not they are likely to lead to large-scale violence. A government that is considerate and inclusive is surely less likely to face rebellion, and, in any case, it will be a better government. However, we should be wary of vilifying those governments of low-income, natural resource–dependent countries that face rebellion. Rebellion need not be a symptom that they are markedly worse than other governments. Instead, they may be in an economic and geographic environment where rebellion is particularly easy, and perhaps even particularly attractive. A journalist interviewed Kabila when he was marching on Kinshasa. He reportedly explained that in Zaire rebellion was easy—all that was needed was ten thousand dollars and a satellite phone. The dollars were to recruit a small army, cheap because the population of Zaire was among the poorest in the world. Recall that even in Zaire the quote was an exaggeration. Kabila had received several million dollars and the support of foreign armies to launch his assault. The satellite phone was to make deals with foreign businesses in extractive industries.

Although occasionally rebellion leads to an improvement in government, more often it leads to spectacular deterioration, and therefore the presumption that rebellion should be avoided is reasonable. Partly this is a matter for governments to make greater efforts to redress reasonable grievances, but it is also a matter of making rebellion less easy. Many of the things that would make rebellion more difficult require action at the regional or global level, and the international community can actively discourage rebellion without taking sides in political disputes. This is the subject of part III.

Although political conflict is common to all societies, civil war is concentrated in the lowest-income countries. In a sense this is hopeful. It is an indication that peace does not depend on resolving all political conflict and that such conflict is normal. Rather, economic development is the critical instrument in preventing rebellion and in building the conditions in which groups engage in their conflicts through normal political means. Economic development in the lowest-income countries is not easy, but neither is it unprecedented, incredibly complex, or wildly expensive. Once a rebellion has started, a society risks being caught in a conflict trap. Ending the conflict is difficult, and even if it ends, the risk that it will start again is high. Strong global actions can be targeted toward conflict prevention in these high-risk environments. Building a peaceful world is not just a matter of encouraging tolerance and consensus. It involves a practical agenda for economic development and the effective regulation of those markets that have come to facilitate rebellion and corrupt governance.

Organization Spotlight: Doctors Without Borders

This organization spotlight will focus on Doctors Without Borders, the international humanitarian organization that provides health care to areas of the world without access to doctors. (The NGO, which was founded in Paris, is also known as Médecins Sans Frontières.) Because the world’s biggest health challenges disproportionately occur in war zones and areas stricken by natural disasters, Doctors Without Borders workers—many of whom are volunteers—are specially trained to work under severe conditions. As a result, the organization is often the only source of health care in a region. For its efforts, the organization received the Nobel Peace Prize in 1999. Watch the video below to learn more.

https://youtu.be/iy7sbagRV-A .