The Consequences of Conflict: Dr Richard Newfarmer began his presentation by outlining some of the data on conflict from the 2011 World Development report. This report showed that countries that are affected by violence have little to no reduction in their level of poverty and no progress in their growth overall. The staggering figures show that continued violence can cost a country over 30 years of GDP growth. This result is well illustrated by the case of Burundi and Burkina Faso, which at independence had comparable levels of GDP growth. However, over the following decades, Burundi experienced substantially more violent episodes than Burkina Faso. By 2008, both countries had experienced drastically different paths of growth, and Burkina had incomes that were [3x?] times that of Burundi. Overall, violence across 17 countries have led to an estimated cumulative loss of 3 decades of growth.

Virtuous Cycles: However, he noted that of the 40 countries that were classified as fragile for five or more years between 1978 and 1990, 23 of those countries managed to escape poverty and violence.  They were able to do this as they could unleash a virtuous cycle of self-reinforcing improvement. To do this, the governments that came into power took immediate measures to create confidence. This then led for the space to allow institutional transformation, better living conditions and new confidence and ultimately unleashed a virtuous cycle that opened the way to further reforms.

Restoring Confidence: To restore confidence, governments need to have signals, realistic plans and commitment mechanisms to enforce these plans. The signals are important for the market and to create inclusive enough coalitions. Here, Dr Newfarmer gave the example of South Africa where Nelson Mandela managed to bring together a big enough coalition before the 1994 election. Another signal that government’s can send is through credible ministerial appointments. In terms of realistic plans, “best fit” programs that may fall short of “best practices” but are actionable in a country’s political context and improve policy.  These create space for future changes towards best practices.  “Commitment mechanisms” – promises overseen by external constituencies — are important to provide a larger signal that the government is transparently accountable. Some post conflict governments, such as the case in Timor Leste, implemented a dual key budgeting system or have independent executing agencies, such as was the case with customs in Kosovo for a brief period.

Transforming Institutions: In addition to restoring confidence, governments also have to work towards transforming institutions, particularly to ensure citizen security, access to justice, and jobs. These three areas are fundamental to the successful development to a post conflict society, and there are examples of successes such as the consensual program to reform the military in the Democratic Republic of the Congo, public financial management reforms that were enacted in Sierra Leone and community based employment programs in Timor Leste that managed to generate jobs for more than 50,000 people.

Rwanda: Rwanda is an example of a post-conflict country that was able to release this virtuous cycle. In 1994, the per capita income of Rwanda was 200 USD. By the time they had enacted reforms in 2012, it had grown to 644 USD per person. After the genocide, production was down by 40% and the country’s economic growth rate was not enough to keep up with population growth. Now growth rates exceed 8% annually and Rwanda has managed to lift more than one million people out of poverty. Additionally, maternal and child mortality has fallen and life expectancy has risen. Rwanda managed to do this by a series of different reforms it put into place between 1994 and 2000. There were three classes of policies:

  • An immediate re-establishment of security and justice: As there was a large outmigration of people across the border, reintegration after the genocide was important. Therefore Rwanda started a number of social programs to deal with orphans and widows. Additionally, they used community justice systems to deal with the criminals from during the genocide
  • Signals: There were a whole host of economic reforms to liberalize the economy which were enacted in a 2 year period. This included removal of trade barriers and privatization of enterprises amongst other reforms.
  • Transforming institutions and enforcing transparency: One major policy they had was to curb corruption, which came from the President’s Office down.