Investing in Peace

In recent years, international aid donors have committed large sums to the reconstruction of war-torn societies. Agencies that invest in economic development confront a new responsibility: investing in peace. This study analyses aid in the wake of negotiated settlements to civil wars, drawing on recent experiences in Bosnia, Cambodia, El Salvador, and Guatemala. It focuses in particular on the use of conditionality to link aid to specific actions by the recipients. Conventional economic conditionalities need to be modified in light of the special circumstances of countries emerging from a civil war. At the same time, donors have opportunities to exercise peace conditionality, linking their aid to steps to implement peace accords and consolidate the peace. At the national level, aid can strengthen the hand of those who are committed to building peace, vis-a-vis those who remain willing to return to war. At the local level, aid can support critical peace-related tasks such as the return of refugees and the reduction of social tensions across fault lines of conflict. But without careful attention to how it is distributed, aid can have the opposite results. Efforts to invest in peace face several challenges. How can aid encourage domestic investment in peace rather than substituting for local resources? How can long-run peacebuilding objectives be reconciled with short-run humanitarian imperatives? What obstacles do the donors' usual priorities and procedures pose to effective aid for peace? This study explores these issues. The author concludes that investing in peace requires not only the reconstruction of war-torn societies, but also the reconstruction of aid itself.