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The Challenge of Reducing the Global Incidence of Civil War

Author: P Collier and A Hoeffler
Date: 2004
Size: 30 pages (304 KB)

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Summary

What are the costs of civil war, and what kind of international interventions are likely to be effective in reducing them? This paper, prepared for the Copenhagen Consensus, focuses on the challenge of reducing the incidence of civil war by looking at the costs and benefits of five different policy interventions. It argues that whereas some instruments would be radically uneconomic, some could offer remarkably large returns. Such interventions include international action to improve domestic governance of resource rents and curtailing rebel access to natural resource markets.

The benefits of successful efforts to reduce the incidence of Civil War accrue at the national, regional and global levels. At the country level, the economic benefits of avoiding war can be estimated by looking at the effect of war on growth rates, as well the effects of changes in the composition of expenditure in wartime. Civil war also causes a severe deterioration in health states. At the regional level, there are impacts on the growth rates of neighbouring countries. A civil war can also trigger neighbourhood arms races, which have adverse effects in terms of diverting spending to the military. Finally, at the global level, civil war has contributed to three major scourges: The production of hard drugs, AIDS and international terrorism. These effects are too speculative to quantify, however.

There are a number of possibilities for reducing the incidence of civil war:

• Aid as an instrument of conflict prevention: Aid has significant positive effects on growth rates. This can have a positive effect on the risk of civil war developing, both directly through growth rates and cumulatively through increased income. However, the benefits of this approach are found to be less than ten per cent of the costs.
• Improved governance of natural resource rents: Natural resource rents are often detrimental to growth, and there is evidence they are a risk factor in civil war.
• International action could improve domestic governance of such rents by establishing a ‘template’ with core principles of transparency of revenues and inter-temporal revenue management. Successful promotion of such guidelines could feasibly produce a saving of $89 billion due to reduced conflict risks, with negligible costs.
• Curtailing rebel access to natural resource markets: International initiatives to certify that they have a legitimate source can have the effect of reducing the price of illegitimate goods. This constrains funding for rebel groups. Such a strategy could produce a global saving of around $6 billion.

The last two possible interventions deal with reducing risks in the post-conflict period:

• Post-conflict aid: During the post-conflict decade, growth is typically higher than normal, especially in the middle of the decade. Increasing aid in this period could yield a gain of more than twice the cost.
• Military expenditure: In early post-conflict situations the risk of reversion to conflict is very high and rapid growth and political design cannot reduce it to acceptable levels. Governments tend to maintain high levels of military spending in the post-conflict period, but this seems to be counter-productive in keeping the peace.
• This creates an opportunity for international interventions to keep the peace. The global net benefits from these interventions could be remarkable if adopted universally: $392 billion. This is assuming that the force eliminates the risk of conflict, and that after a ten-year presence the risk reverts back to normal levels.
• All the estimates in this study are gross approximations, but provide guidance as to orders of magnitude, and as such can be useful. They suggest that whilst some instruments would be radically uneconomic, others offer remarkably large returns.

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Source: Collier, P. and Hoeffler, A., 2004, 'The Challenge of Reducing the Global Incidence of Civil War', Copenhagen Consensus Challenge Paper, Centre for the Study of African Economies, Oxford