The Elusive Peace Dividend of Development Policy: From War Traps to Macro Complementarities

Posted: 12 Aug 2021

See all articles by Dominic Rohner

Dominic Rohner

University of Lausanne; Centre for Economic Policy Research (CEPR)

Mathias Thoenig

University of Lausanne; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2021

Abstract

This article reviews the literature on civil conflict and development with a focus on the socioeconomic consequences of violence and on promising policies for fostering peace. We make four main points. First, one of the reasons conflict is still often overlooked as key factor for development is that conflict costs are typically underestimated, in particular the shadow costs of deterrence. Second, there are several types of war traps that hold countries back, both economically and politically. Third, to break these traps, policies must be calibrated to address jointly both poverty and social tensions, as there is a strong macro complementarity between peace and development objectives. We document how single-minded policies that ignore this dual challenge can spectacularly fail, and we discuss in depth a series of particularly promising policies. Fourth, we highlight the increasing potential of novel data collection methodologies and the need for policy evaluation tools in violent contexts.

Suggested Citation

Rohner, Dominic and Thoenig, Mathias, The Elusive Peace Dividend of Development Policy: From War Traps to Macro Complementarities (August 2021). Annual Review of Economics, Vol. 13, pp. 111-131, 2021, Available at SSRN: https://ssrn.com/abstract=3903096 or http://dx.doi.org/10.1146/annurev-economics-073120-102652

Dominic Rohner (Contact Author)

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Mathias Thoenig

University of Lausanne ( email )

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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