Post‐War Recovery and the Role of Markets: Policy Insights from Six Years of Research
| Published date | 01 May 2018 |
| DOI | http://doi.org/10.1111/1758-5899.12560 |
| Author | Richard Mallett,Adam Pain |
| Date | 01 May 2018 |
Post-War Recovery and the Role of Markets:
Policy Insights from Six Years of Research
Richard Mallett
Overseas Development Institute
Adam Pain
Swedish University of Agricultural Science
Abstract
Markets and private sector development are considered central to the recovery of economies and people’s livelihoods after con-
flict. But the specific ways in which they shape this process, and the question of how governments and development partners
might best support market resuscitation, are patchily evidenced and poorly understood. The Secure Livelihoods Research Consor-
tium was established in 2011 as a cross-country research programme tasked with asking and answering questions about state-
building, service delivery and livelihoods in conflict-affected situations. As part of its broad agenda of livelihoods research from
2011 to 2017, the Consortium undertook a specific investigation of the role that markets, and people’s engagement with them,
play in processes of post-conflict livelihood recovery, ultimately with a view to informing policies and programmes that are fit for
purpose. This Policy Insights paper summarises the main findings and policy recommendations emerging from a synthesis of the
Consortium’s market studies, drawing also on key evidence and insights from the wider literature.
Nowhere is economic d evelopment a more pres sing chal-
lenge than in countries rec overing from war.
1
An ever-
expanding body of evidence points to the many ways in
which violent conflict dis rupts and suppresse s economic
activity at multiple scales –from the livelihoods of individu-
als and households to pe rformance at the natio nal level,
typically quantified through impacts on gross domestic pro-
duct (GDP) (Blattma n and Miguel, 2010; Malle tt and Slater,
2012).
After the signing of peace agreements comes the monu-
mental task of revitalising these spheres of economic activ-
ity. For aid agencies and other development actors, that
means supporting affected countries and their governments
to rebuild what has collapsed –and doing so relatively
quickly. Part of what drives this urgency is the idea that
stagnation and underdevelopment in the post-conflict phase
can easily push countries back into violence. Of particular
concern are large populations of unemployed youth, espe-
cially young men, to whom a lack of jobs is seen to lower
the ‘opportunity cost’of (re-)participating in armed insurrec-
tion (cited in Stewart, 2015).
The usual outcome is a range of aid-funded reforms and
interventions to try to engineer economic development, legit-
imised by a relatively well-accepted understanding that this is
a process requiring active facilitation (see, for example, DFID,
2017; World Bank, 2011). Central to this ‘toolbox’are efforts to
resuscitate markets, conventionally understood by orthodox
(neoclassical) economics as the spaces through which goods,
services and labour are exchanged in accordance with the
textbook logics of impersonality, rationality and meritocracy
(Fleetwood, 2011; Kabeer, 2012; White, 1993). Just as with
livelihoods and economic activity more broadly, conflict is
generally understood to collapse markets into dysfunction,
with the effect that they can no longer support positive,
broad-based economic outcomes. Their regeneration is thus
framed as a priority from the standpoint of both peace-build-
ing and economic development, critical for getting house-
holds, communities and countries back on their feet.
Market resuscitation is often pursued through a strong
focus on private sector development, around which a thriv-
ing aid ‘cottage industry’has emerged. The emphasis here
is on promoting business by attracting investment, remov-
ing barriers to enterprise, and encouraging people’s
entrance into the economy. In practice, the range of tools
used to achieve these goals looks relatively standardised
across contexts, and primarily includes:
•A menu of broad reforms associated with the likes of the
World Bank’sDoing Business initiative, which measures
barriers to enterprise (such as excessive taxation and red
tape), ranks countries accordingly (identifying the easiest
and most difficult places in the world to ‘do business’),
and diagnoses priority areas for reform (typically through
the removal of unnecessary regulation and enforcement
of various protections and rights). These are essentially
about getting the ‘enabling environment’right, and can
be considered alongside the recent trend towards public
financial management (PFM) reforms in fragile states.
•A series of more targeted, intervention-based policies.
This includes specific measures such as vocational
©2018 University of Durham and John Wiley & Sons, Ltd. Global Policy (2018) 9:2 doi: 10.1111/1758-5899.12560
Global Policy Volume 9 . Issue 2 . May 2018
264
Policy Insights
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