Introduction: Economic Recovery Strategies: Strategies & Models

As the consensus around the meaning of economic recovery is evolving, so too are strategies and models for implementation. Debates around emphasis of particular components and sequencing lie at the heart of discussions on strategy. While the dominant economic growth model has inspired most economic recovery strategies to date, there is growing recognition of the particularities of context that have relevance in thinking about operational issues.

Five "models" or "strategic approaches" associated with post-war recovery are highlighted here. Given the relative newness of economic recovery as a concept and the lack of consensus on its use, these models are contested and debated, and discussed more in the section on debates later. They are followed by a discussion of strategic frameworks and institutional mechanisms for supporting economic recovery, which are commonly being developed by international and national actors to ensure coherence and coordination.

Approaches to economic recovery

Two economic recovery models are outlined here that are based on Susan Woodward's analysis, followed by Roland Paris' institutionalization before liberalization approach, the early recovery approach proposed by the New York University Center on International Cooperation, and, finally, the approach proposed by the Bureau for Conflict Prevention and Recovery in its new report on economic recovery. While they cannot all be deemed "models" of economic recovery, they at least each constitute a different approach that significantly impacts upon and/or incorporates economic recovery, with important implications for peacebuilding.

Orthodox models

Susan Woodward argues that the Natural Disaster Model and the Postwar Stabilization and Reconstruction Model, which have been used for decades by the international community and, especially, the IFIs, were designed with different types of war economies in place.1 These models prioritize rapid stabilization, price liberalization, and privatization, or what is sometimes called "shock therapy."2 There is an assumption that these activities are implemented with a government fully capable of effectively functioning and an operational market economy, as was the case with post-Second World War European nations. Modern wars typically start in developing countries, where there may have been a lack of human and financial infrastructure to begin with and the presence of an economy that relies on informal activities, barter systems, and illegal trafficking.3 Thus, scholars such as Woodward and Roland Paris argue that rapid liberalization is not appropriate for today's post-conflict economic recovery efforts and may, in fact, be harmful to long-term development and durable peace.

Go to Natural Disaster Model and Postwar Stabilization and Reconstruction Model

Woodward asserts that rapid liberalization following conflict fails to build social infrastructure, such as healthcare and schools, because it focuses on macroeconomic policies while exacerbating economic inequalities, especially in the short term.4 In addition, "tight monetary policy inhibits cheap credit for the promotion of local small and medium enterprises (SMEs), even though their critical importance early on in the peace process is now widely acknowledged even by World Bank staff."5

Post-war stabilization and reconstruction model

The post-war stabilization and reconstruction "model" that has dominated practice over the last decade is essentially the neoliberal economic strategy based on economic growth and free trade. Developed and used by IFIs, particularly the IMF, to meet the needs of post-Second World War Europe, it evolved into a strategy applied to post-conflict reconstruction. This approach prioritizes macroeconomic stability as first economic policy, which then sets all other aid and policy conditions. The World Bank mobilizes loans from donors for "Bank-designed" physical infrastructure projects and economic reforms in favor of liberalization and privatization "that are said to promote economic growth and attract foreign investment."6

Critiques of this approach are focused on the notion that it is in conflict with the goals of social peace and reconciliation, and that it conflicts with United Nations mandates to implement peace agreements, which usually include more of the social peace components.7 Critiques of the neoliberal approach to economic strategy more generally, and its relationship to conflict and peace, are elaborated in the debates section.

Natural disaster model

Focusing on the first year or two after conflict, the natural disaster model is a short-term, rapid response humanitarian approach. Although not meant to, it often lasts longer because humanitarian agencies have a vested interest in the situation. This, however, often does not facilitate the transition to development and self-sufficiency.

This approach is usually organized by crisis-response divisions of bilateral development agencies and implemented by international emergency response and disaster relief NGOs. The approach aims to: (1) provide an immediate, visible peace-dividend in food, shelter, and basic utilities until longer-term developmental projects can be implemented, and (2) move the population as rapidly as possible toward self-sufficiency and away from aid dependence.

Woodward recognizes a historical tendency among donors to divide "economic tasks" into separate relief and development categories. In the 1990s, aid agencies recognized the need for a transition period between relief and development, during which programming overlapped and the division was seen in terms of a continuum. Few aid agencies have developed policies that reflect this view. The natural disaster model is still used for crisis relief, but the associated strategies are frequently used for longer than necessary and compete with long-term development programs.

Woodward highlights how the World Bank, the dominant force globally in defining post-conflict reconstruction strategy, acknowledged in its 1998 review of its experience in post-conflict reconstruction that the model underlying that strategy from its origins in the 1970s and 1980s to 1998 was also that of recovery from natural disaster.8 She also points out that the post-war stabilization and reconstruction model has been "hamstrung" by the rigidities of the IFIs' neoliberal policies.9

Emerging models

Several prominent scholars argue that the priorities associated with orthodox recovery models have little applicability in today's conflicts and require a retooling of strategies. In response, new models are emerging for post-conflict economic recovery. Roland Paris "institutionalization before liberalization" model and the early recovery approach, which is based on filling the relief to development gap, seek to modernize post-conflict recovery efforts by responding to the economic realities of today in ways that are sustainable and conflict sensitive.

Institutionalization before liberalization

Roland Paris, of the University of Colorado, Boulder, provides an alternative to the dominant liberal peace model of the 1990s that is particularly relevant in post-conflict recovery contexts. He states, "Peacebuilding missions in the 1990s were guided by a generally unstated but widely accepted theory of conflict management: the notion that promoting liberalization in countries that had recently experienced civil war would help to create the conditions for a stable and lasting peace."10 Paris argues that the rapid liberalization and marketization of post-conflict economies and politics was more detrimental than effective in consolidating peace and promoting economic recovery: "International efforts to transform war-shattered states have, in a number of cases, inadvertently exacerbated societal tensions or reproduced conditions that historically fueled violence in these countries. The very strategy that peacebuilders have employed to consolidate peace--political and economic liberalization--seems, paradoxically, to have increased the likelihood of renewed violence in several of these states."11

Paris' alternative model, institutionalization before liberalization (IBL), "begins from the premise that democratization and marketization are inherently tumultuous transformations that have the potential to undermine a fragile peace."12 The IBL approach prioritizes domestic institution building before democratic and market-oriented reforms are introduced into the fragile environment. Once national institutions have the capacity to support liberalization, these reforms can be implemented with gradual and deliberate steps.

Key Elements for an "Institutionalization before Liberalization" Strategy
- Wait until conditions are ripe for elections;
- Design electoral systems that reward moderation;
- Promote good civil society;
- Control hate speech; and
- Adopt conflict-reducing economic policies.
- The common denominator: rebuild effective state institutions.

Source: Paris, Roland. At War's End: Building Peace after Civil Conflict. Cambridge: Cambridge University Press, 2004, 188.

Early recovery approach

As outlined by the New York University Center on International Cooperation (CIC), an early recovery approach is focused on identifying and responding to the strategic response "gaps" that have been identified in post-conflict settings. Priorities to address them then fall into the following areas:
  • Early efforts to secure stability;
  • Early efforts to establish the peace;
  • Early efforts to resuscitate markets, livelihoods, and services, and the state capacities necessary to foster them; and
  • Early efforts to build core state capacity to manage political, security, and development processes.1
Go to Relief to development: Definition

The authors "define an effective strategy as one able to (i) provide a framework that guides interventions by all relevant actors here, at a minimum, the peacekeeping/political operation, the key UN development and humanitarian agencies, the Bretton Woods institutions, and the main bilateral donors; and (ii) provide a framework for selecting competing priorities."14

Like the IBL model, the early recovery approach prioritizes national capacity building for long-term self-management and continual reinforcement of the peace process to avoid a return to conflict.Perhaps most important, the early recovery approach relies on conflict and context sensitivity, rather than on a standardized framework for sequencing and prioritization.15

A clear model for how such a strategy would operate, CIC argues, has emerged from several years of thinking on early recovery, in particular from bilateral efforts, such as the Office of the Coordinator for Stabilization and Reconstruction at the US Department of State and the Stabilization Unit (formerly the Post-Conflict Reconstruction Unit) at DFID.16 The model outlines three layers that mark the bridge from planning to execution, reflecting theory emanating from both military and civilian planning.17 These layers are:
  • System interoperable strategy: To determine how to respond to early recovery needs, the system (the international community) needs to be able to determine which of the tools in its toolbox it needs to deploy. This requires having access to a basic assessment framework, a set of tools to determine needs.
  • Field-level dynamic planning: Once an overarching strategy is in place, that strategy must continually evolve to reflect dynamic political, social, and economic conditions in the country.
  • Execution: Execution capacity must back up dynamic planning capacity.18
From this framework, early recovery efforts should provide a firm foundation for post-conflict efforts, which overall seek to foster the development of a state that is "able to manage its political process and build a social contract with civil society and the citizenry; that can sustain its own security; and can respond to its peoples demand for development, both through the provision of services and public goods, and through creating a framework for economic growth, and meeting its international obligations, such as human rights and non-proliferation."19 Early recovery efforts, then, seek to ensure "enough government capacity to carry that process forward; enough momentum on the political process and enough activity on the economic front to sustain confidence at both elite and popular levels in the viability of the political alternative to war."20

This approach was developed by CIC through a study commissioned by DFID, following a speech by British Prime Minister Gordon Brown in which he criticized the international community for its peace strategies, especially during the early post-conflict phases. The British government has argued that international mechanisms--particularly those used within and by the United Nations--should be better organized to support stabilization and early recovery from conflict. While the "gap" has been the subject of numerous and lengthy "reform" processes, this new initiative constitutes an important departure from past efforts, which have been led by international agencies focused on humanitarian or peacekeeping concerns, rather than by those with an eye on longer-term development and its linkages with sustaining peace.21

Among its strategy recommendations, the CIC early economic recovery approach suggests that:
  • Capacity-building programs need to be willing/able to take risks to build national capacity absent clear national direction;22
  • "Good enough development" is necessary, ensuring a willingness to spend money to secure the peace dividend and in ways that serve the important short-term goal of stability and sustainability of recovery;23
  • Programming needs to be more fluid and flexible, responding to reality, political climates, and shifting institutional capacities and supported by assessment strategy and planning;24 and
  • Donors must be willing to sacrifice the donor flag to common strategy and to take greater risks than is the norm in traditional programming.25
Also potentially relevant, though not tested in post-conflict settings, is the "one UN" model being piloted to test recommendations of the High-level Panel on System Coherence.26

Economic recovery

The Bureau for Conflict Prevention and Recovery's (BCPR) 2008 report, Post-Conflict Economic Recovery: Enabling Local Ingenuity, represents the United Nations' most current thinking on economic recovery, an approach focused on how countries can "rebuild the foundations and establish the conditions for a self-sustaining, inclusive growth in the immediate aftermath of violent conflict."27 It argues that a sound economy is a fundamental requirement for human development and that, in the post-conflict context, "broad-based economic recovery is critical for avoiding the recurrence of violence."28

BCPR considers economic recovery from three angles: (1) indigenous drivers; (2) macroeconomic policies to support economic recovery; and (3) the role of the state.

The BCPR approach is rooted in the belief that economic recovery is most sustainable and successful when strategies are developed through locally owned processes, in what it calls "indigenous drivers": "The indigenous drivers perspective locates the efforts of individuals, households and communities within their socio-historical context and highlights these as the most viable platform on which to base post-war recovery and international support." This concept is based on the idea that local actors have the most motivation to build a strong economic base for their livelihoods.29

The indigenous drivers approach to economic recovery is linked with the common principles of participation, national ownership, and capacity building but strives to go beyond these concepts. For example, "The approach also encompasses the familiar notion of capacity development. However, it is larger because of its additional focus on reducing conflict risk. Nurturing indigenous drivers involves explicitly identifying the capacities, capabilities and tensions inherent in systems and processes and in organizational, community and even national dynamics as observed in the immediate aftermath of conflict."30 According to BCPR, indigenous drivers can "be reinforced and stimulated in six critical areas":
The BCPR report also prioritizes macroeconomic policies that can support recovery in the tough post-conflict economic environment: "When war ends, countries face serious macroeconomic problems including massive unemployment, moderate to high inflation, chronic fiscal deficits, high levels of external and domestic debt and low domestic revenues." In response to these challenges, the bureau argues that managing inflation, effectively and efficiently managing external aid, building an investment climate that is attractive to the private sector, and achieving fiscal autonomy, combined with steady economic growth, are the keys to successful economic recovery.32

The third focus of the BCPR approach concerns the role of the state in post-conflict economic recovery: "After war, the recovery and rehabilitation of the state itself is a priority, particularly because a functioning state is essential for peace consolidation. The key governance and institutional needs that are critical both to economic recovery and peace consolidation include: restoring effective government control over public finances; reconstituting mechanisms for oversight and accountability; recreating a professional public administration; and rebuilding representative and inclusive political mechanisms and institutions."

The BCPR approach is also rooted in the belief that sustainable recovery is not possible without context- and conflict-sensitive thinking. From a contextual point of view, economic recovery strategies should be designed according to several layers of influential characteristics:
  • Level of per capita income;
  • Presence of horizontal inequalities;
  • Natural resource abundance or scarcity; and
  • Current economic environment.33
In addition, BCPR recognizes that external actors can play an important role in supporting indigenous drivers when local capacity is low.34

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Sequencing and prioritization

Post-conflict environments are extraordinarily complex, and there are many simultaneous needs to consider, with limited funding, capacity, and time.35 The authors of the CIC report state, "The most complex challenge in the strategic process may be prioritization."36

As demonstrated in the previous section, which outlines competing approaches to economic recovery, there is little agreement on priorities and sequencing of activities, despite widespread recognition that getting sequencing right is vital to peacebuilding efforts. The complexity of the task is no doubt compounded by the fact that there is no agreement on precisely what is being prioritized, to what end, and within what timeframe.

Problems associated with developing "models" or guidelines for sequencing and prioritization are compounded by the fact that external actors may often have to make concessions for political reasons--to buy political leaders' consent--without which reconstruction may not be possible.37

Three perspectives on sequencing are discussed here. The first is what can be considered the "orthodox" approach, which prioritizes securing the environment before shifting to long-term development measures. This approach is often used for developing countries without sufficient consideration of post-conflict economic recovery needs. A combined approach put forward by Tony Addison is then discussed, followed by a more context-driven approach advocated by BCPR and others.

Security first, then development

The orthodox approach to post-conflict sequencing is that economic reforms should be delayed until political stability efforts, including disarmament, demobilization, and reintegration (DDR), are well underway and the political situation has been stabilized. Under this thinking, this phase would last two to five years after a peace agreement and would be followed by economic reforms aimed at poverty reduction.38

IFIs support this view, noting, "security, and the associated capacity problems, is an impediment to developing I-PRSPs and receiving debt relief under HIPC." However, there is the paradoxical recognition that I-PRSPs can encourage security by providing support for reconciliation and DDR, as well as activities to restore a functioning economy.39

UNDP argues that security is a prerequisite for economic recovery: "While limited economic activity can exist in dangerous and unstable environments, full-fledged economic development requires that people can move around safely, are not forced to waste time and energy on ensuring their own personal safety, and have a degree of confidence in their ability to predict future economic developments."40 With the latter essential for making business decisions, leadership must focus on "securing" development. In the short term, measures aimed at breaking the dynamics of violence are important, such as the disarmament and economic reintegration of armed groups and/or community policing arrangements, while in the long term, the focus is on strengthening justice and security, as well as implementing social and economic programs that target high-risk groups or potential conflict triggers.41

"Reconstruction" and economic reform simultaneously

Tony Addison proposes the concept of broad-based recovery, whereby the reconstruction and reform agendas are addressed simultaneously (with the recognition that activities will need to be prioritized within this broader agenda). By the reconstruction agenda, Addison means those activities that seek to build peace and secure political stability, including: institution building, community reintegration of displaced persons, demobilizing, disarming and reintegrating former combatants, and rebuilding economic and social infrastructure.42 He argues that broad-based recovery and growth only hold a limited chance of success if the policies that impede poverty reduction are not changed during the reconstruction phase (or during the war itself, if circumstances permit).43

Economic reforms, Addison argues, are intrinsic in reconstruction because a state needs transparent, accountable public finance mechanisms in order appropriately to channel extra resources from reduced military spending and extra international aid.44 Economic reform can refer to any change in economic policy, including public expenditure reform (changing the allocation of public money and its management), revenue reform (changing the origin and methods for collecting taxes and other revenues), trade and currency reform (altering the structure of import tariffs and quotas, as well as policy toward the foreign exchange market), financial sector reform (adjusting controls on lending and borrowing by the financial system, together with the institutions of financial supervision), and sector reform (changing policies for agriculture, industry, energy, and utilities).45

These agendas are expansive and often compete for scarce financial and human resources, which leads to questions of sequencing. Yet, when they are compartmentalized "what may well result is not a broad-based recovery in which the poor benefit the most, but a narrow recovery in which an elite (sometimes consisting of those who profited from war) strengthens its position while poor communities stagnate, or fall further behind."46 Well-designed reforms raise the chances that recovery will be broad-based instead of narrow.

A context-sensitive approach

BCPRs economic recovery report argues that policy makers should promote recovery that is self-reinforcing by building on early economic and political dividends to generate goodwill and buy-in for subsequent reforms: "Excessively complex reforms, particularly in the domains of financial liberalization and privatization, risk backfiring if a proper regulatory regime is not yet in place."47 Moreover, it is not whether quick action is needed but "what set of policies is most appropriate in the immediate aftermath of conflict, and is more likely to create the conditions for recovery." With this in mind, BCPR suggests that economic recovery sequencing issues are likely to constitute two levels of priorities:
  • First-order priorities
    • Reducing the risk of conflict;
    • Promoting the risk of resumption of investment activity; and
    • Installing an appropriate institutional framework.
  • Second-order priorities
    • Lowering inflation to single-digit levels;
    • Pursuing competitiveness or raising taxes right after conflict ends;
    • Building in early political and economic dividends to create "buy-in" for reforms;
    • Exhibiting caution when implementing complex reforms, especially for financial liberalization and privatization, which can backfire if the regulatory institutions are not yet in place.48

BCPR suggests that earlier, deeper donor involvement can play a "catalytic role" through debt relief and project or program aid by providing the breathing space so needed in post-conflict settings. Finally, "political will, conflict sensitivity and context appropriateness appear to be key ingredients for success," reinforcing the notion that there is no one-size-fits-all policy package for each setting.49

The early recovery approach suggested by CIC similarly relies on conflict and context sensitivity, rather than on a standardized framework for sequencing and prioritization:50 "Where Lebanon required attention to rebuilding infrastructure to restore livelihoods, Afghanistan required more focus on the security sector, Sierra Leone on youth employment and disarmament, and the DRC [Democratic Republic of the Congo] on securing control of natural resources. All of these sectors interact, of course, and it is only through a deep understanding of context that prioritization is possible."51

Coherence and coordination of international aid

As peacebuilding and post-conflict economic recovery have gained prominence, the number of actors involved has increased. With this new focus, however, there is also increasing attention to the necessity for strategic coordination of roles and activities. In the 2005 United Nations Development Programme Human Development Report, strategic coordination is highlighted as a key determinant of recovery success or failure. Using Bosnia and Herzegovina as an example, the report argues that the failure of coordination and coherence is a primary reason that the country has not recovered economically.52

Many scholars have identified challenges and obstacles to coherence and coordination. James Boyce and Madalene O'Donnell of CIC argue, "Although calls for better coordination have become so frequent as to be almost a platitude, efforts to achieve it run up against the familiar obstacles of bureaucratic rivalries and contests for resources."53 They emphasize that getting priorities right is not only a technical challenge but also a political one.54 In a similar vein, Roland Paris argues that while better coordination is a necessary condition for international action, it is often too easily prescribed "as the remedy for the shortcomings and contradictions of state-building, which run much deeper," while ignoring the realities of the post-conflict environment.55

Coordination problems exist because there is a multitude of actors dealing with extraordinarily complex issues, in parallel with the lack of a coordinating body and limiting mandates.56 Problems of coordination can be identified at four inter-related levels:

  • At the field level, between the various international actors (including governmental and non-governmental agencies) involved in statebuilding missions and domestic actors within the country itself, including government authorities;
  • Within the bureaucracies of the major donor governments, whose different departments and agencies often pursue different goals and activities within the same mission;
  • Within the United Nations system, where bureaucratic rivalries and turf battles are legion; and
  • At the headquarters level, between all the major international statebuilding actors as well as the major governments supporting these actors.57
Even when a body for coordination is established, there is often a lack of desire to be coordinated. Bruce Jones describes how "recent efforts to enhance structures for strategic coordination on the ground, both within the UN and beyond, have been frustrated by the sheer numbers of actors involved, the limited extent to which these actors accept the coordinating authority of the UN, or analogous body, and the absence of policy coordination structures at the headquarters level."58 In addition, coordinating bodies lack the budget and implementation control necessary to "give coordination real teeth."59 There is hope that the United Nations Peacebuilding Commission (PBC) will be able to improve coordination and coherence, as well as integration within the UN, on recovery and peacebuilding issues, as set out in its mandate. While the PBC's activities into 2008 focused on recovery efforts late in the peacebuilding process,60 it is now spearheading the development of a report by the secretary-general on early recovery and peacebuilding.

Failure to effectively coordinate strategies can result in opportunities for peace spoilers, derailment of peace processes, added costs, reduced effectiveness, and slow success.61 Research by Alvaro de Soto and Graciana del Castillo,for example, has shown that the economic approach and decisions of IFIs, particularly the IMF, and the political tasks of implementing a peace mission are often directly in conflict.62 Susan Woodward points out, however, that despite this knowledge, bilateral donors and UN agencies tend to leave leadership on macroeconomic stabilization and policy reform to IFIs, while designing and financing development projects, either as donors to the World Bank program or as independent actors, along sectoral lines within that framework.63

In outlining areas for enhanced coordination aimed at supporting partner country efforts to strengthen and improve development performance, the Paris Declaration on Aid Effectiveness highlights:

  • The need for donors to align with partners' strategies, linking funding to a single framework of conditions and/or a manageable set of indicators derived from the national development strategy;64 and
  • The need for donors to implement, where feasible, common arrangements at the country level for planning, funding (e.g., joint financial arrangements), disbursement, monitoring, evaluating, and reporting to government on donor activities and aid flows.65
The New York University Center for International Cooperation (CIC) also recommends clearer divisions of labor at the United Nations through the use of a six-pillar system:

  • Peacekeeping operations, including security, security sector reform (SSR), police, and corrections; 
  • Political affairs, including political reform, constitutions, and elections
  • Humanitarian affairs, including humanitarian services and protection and links to the United Nations Office of the High Commissioner for Refugees (UNHCR), the World Food Programme (WFP), the United Nations Childrens Fund (UNICEF), and non-governmental organizations (NGOs);
  • UNDP's BCPR, with a focus on statebuilding, public administration, and justice systems
  • The World Bank, with a focus on finance, economic frameworks, infrastructure, and investment; and
  • The Office of the High Commissioner for Human Rights (OHCHR), with a focus on human rights and transitional justice.66 
The report also recommends that the UN secretary-general use the Peacebuilding Support Office (PBSO) and the Policy Committee to create change within the UN system and to implement the six-pillar system at the country level, in coordination with UN Country Teams (UNCTs). According to the report, "Success will depend also on continuing efforts to achieve the goals of the 'integrated mission' process, but flexibly so; on applying the 'One UN' concept to conflict settings; and to realize the ambitions behind the creation of the Peacebuilding Commission."67 Special representatives of the secretary-general (SRSG) and deputy special representatives of the secretary-general, in their respective capacities, (or resident coordinators, where there is no political lead) are well placed to guide decisions regarding sequencing and prioritization. SRSGs in particular have resources to draw on to reinforce their judgments about prioritization.68

With the agreement, however, that ultimately economic recovery and broader processes of peacebuilding must be nationally led comes recognition of a need for "organizational coherence among the legitimate representatives of the host society itself, so that international actors can engage effectively with national leaders." Efforts to identify national-level interlocutors can result, as the CIC report warns, "in an over-emphasis on elites based in the capital, at the expense of regional and local institution-building."69 Nonetheless, as is fully acknowledged within the UN, national leadership remains essential. This is particularly true for sequencing decisions, where "national actors can define their needs, and response mechanisms better than any other."70

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Strategic frameworks

Strategic policy frameworks were adopted in the 1990s to coordinate political, humanitarian, and development actors around shared goals. Since that time, most integrated missions have developed, or are developing, a strategic framework of some form to guide their operations in concert with national actors. These have been defined by the PBSO as "mutually accountable and time-bound agreements, between a government and international partners, for directing scarce foreign and public technical financial and political resources toward building national capacities to address the root causes of violent conflict."71 A central operational challenge is that in any one setting there tend to be a plethora of operating frameworks and processes, which can generate more confusion than coherence, particularly for new governments overwhelmed by competing priorities and demands.72

The United Nations Development Assistance Framework (UNDAF) is linked to, or even articulated as responding to, government strategies and priorities, now defined through poverty reduction strategies. At the same time, challenges remain to aligning the different instruments, largely because of different time lines and positions in the program cycle.73 The United Nations Resident Coordinator in the affected country has the responsibility of working to get the agreement of the government on early and better harmonization of UN frameworks with the national planning cycle.74

The ways in which PRSPs and the UNDAF address specific issues of economic recovery, including the private sector, financial management, community reintegration, natural resource management, and employment, are discussed in the thematic sections, alongside other strategic frameworks focused more directly on these issues.

Poverty reduction strategy papers (PRSP)

PRSPs elaborate a long-term national development plan that is linked to the Highly Indebted Poor Countries (HIPC) Initiative. They are now a prerequisite for debt relief and concessional loans from the World Bank and the International Monetary Fund (IMF). The PRS process is rooted in the ideas of country ownership, broad participation, and equitable, pro-poor development.75 While still a relatively new concept, increasing efforts are underway to ensure that conflict and peacebuilding issues are taken into account in the PRSPs of conflict-affected states (now increasingly, more generically, referred to as poverty reduction strategies).

Two central issues make PRSPs a unique departure from previous economic policies, namely structural adjustment policies: the linkage of aid to "domestically developed, results-based poverty strategies" and the value placed on process. A broad, participatory dialogue with representatives of civil society and the private sector is expected tri-annually to produce a PRSP that:
  • Helps national authorities develop a better understanding of the obstacles to poverty reduction and growth, and to devise good indicators of progress in poverty reduction;
  • Deepens a shared vision of desired poverty reduction goals across society;
  • Leads to the formulation of priorities for public actions to achieve the desired poverty reduction outcomes; and
  • Encourages the development of participatory processes for setting poverty reduction goals and monitoring implementation and progress.76
In the broader development context, PRSPs have become a framework for coordinating domestic and international efforts to achieve the Millennium Development Goals (MDGs), and governments are expected to show links between the MDGs and their macroeconomic policies.77

Extensive debates have emerged over the effectiveness of PRSPs in helping governments with post-conflict economic recovery specifically and long-term development more broadly. In its own research, the World Bank has found that, in PRS processes, participation is focused at the national level and is much weaker at the local government and community levels. Moreover, national governments may lack capacity to drive the process, and there may be insufficient ownership of the process.78 A common criticism is the propensity for countries to fail to link macroeconomic policies with poverty reduction goals, which is supposed to be a key element of the PRS. Former United Nations Special Rapporteur on Foreign Debt and Structural Adjustment Fantu Cheru found that this failure is a result of countries rushing the process in order to "earn" quick debt relief and the "unequal power relations between indebted countries and the Bretton Woods institutions that manage the HIPC process."79

For these same reasons, countries often put a strong priority on macroeconomic considerations, at the expense of participation.80 Critics also argue that PRSPs, if implemented improperly, can exacerbate or fail to address inequalities, which can undermine a fragile peace.81 Finally, some policy makers and scholars assert that PRSPs are just more of the same neoliberal policies that the international community has promoted for decades and that have failed to create pro-poor policies or a real reduction in poverty.82

Based on his study, Cheru prescribes several actions to mitigate the shortcomings of the PRS. First, he believes that the development of a realistic and fully linked PRSP is unlikely under current IFI time expectations. Second, the report found that PRSPs must detail specific strategies to solve the identified problems. Cheru also encourages countries to link more fully macroeconomic policies with poverty reduction goals and strategies. Centrally, HIPC debt relief should be delinked from the PRSP process, and the only condition imposed on countries receiving debt relief should be that they establish an independent entity to channel freed resources towards social development.

Additionally, the World Bank and the IMF should by no means have an exclusive role as overseers of poverty reduction programs; other United Nations agencies should be included. New rounds of talks aimed at finding a solution to the debt burden of many poor countries should be organized, the Poverty Reduction and Growth Facility of the IFIs, he believes, should be abolished, and a serious dialogue should be undertaken on how to integrate macroeconomic policy issues with broader social development goals.83

United Nations Development Assistance Framework (UNDAF) and other international frameworks

The United Nations has its own planning frameworks for development operations of the UN system at the country level that aim broadly to foster UN coherence in support of national government priorities. These include the Common Country Assessment (CCA), a diagnostic tool intended to develop a common understanding of key risks and challenges associated with the development process, upon which the UNDAF is based.

As defined in UN guidelines, the CCA is an essential first step for the preparation of the UNDAF. It generates a common understanding in the UN family in an affected country of the causes of development problems and the country's needs and priorities. This consensus "helps define the purpose and strategy of UN system support to a country as described within the UNDAF." Moreover, the teamwork promoted by the CCA "is indispensable for uniting the UN system around the UNDAF and building partnerships with key development actors."84

The UNDAF is the planning framework for the development operations of the UN system at the country level and, as such, lays the foundation for cooperation among the UN system, government, and other development partners through the preparation of a complementary set of programs and projects. The UNDAF consists of common objectives and strategies of cooperation, a program resources framework and proposals for follow-up, and strategies for monitoring and evaluation.

UNDAF preparation requires full government participation and its full ownership through the agreement of the recipient government. The UNDAF is considered "both as a process and a product" and is linked with a number of other key instruments of development cooperation employed by the UN system and other partners.85 These include the consolidated appeals process (CAP), which is undertaken in countries emerging from a complex emergency. UN system assistance is programmed through the CAP, and it is envisaged that the UNDAF will build upon the recovery efforts initiated by the CAP. The UNDAF is also encouraged to ensure complementarity with Bretton Woods Institution frameworks, such as the World Bank Country Assistance Strategy (CAS).86

One of the tools for mainstreaming conflict prevention in development assistance is through the CCA/UNDAF processes,87 although this is not yet widely practiced. A review of CCAs and UNDAFs found that conflict analysis is well integrated in some CCAs and UNDAFs. In general, however, the analysis of conflict in the assessment of key internal and external risks, as well as consideration of how development and policies are implemented in light of conflict, are not sufficiently considered.88

1. Woodward, "Economic Priorities for Successful Peace Implementation," 192.
2. Ibid., 192.
3. Ibid., 192.
4. Ibid., 193.
5. Ibid., 193.
6. Ibid., 191.
7. Ibid., 191.
8. Ibid., 190.
9. Ibid., 191-93.
10. Paris, At War's End: Building Peace after Civil Conflict, 5.
11. Ibid., 6.
12. Ibid., 7.
13. World Bank Post-Conflict Fund, "Workshop on Closing the Gap," 2.
14. CIC, "Recovering from War," 32.
15. Ibid., 34.
16. Ibid., 32.
17. Ibid., 32.
18. Ibid., 32.
19. Ibid., 26.
20. Ibid., 26.
21. Ibid., 2.
22. Ibid., 7.
23. Ibid., 7.
24. Ibid., 7.
25. Ibid., 7.
26. Ibid., 27.
27. BCPR, Post-Conflict Economic Recovery: Enabling Local Ingenuity, xvii.
28. Ibid., xvii.
29. Ibid., 49.
30. Ibid., 50.
31. Ibid.
32. Ibid., xvii-xviii.
33. BCPR, Post-Conflict Economic Recovery: Enabling Local Ingenuity, 9-10.
34. Ibid.
35. Woodward, "Economic Priorities for Successful Peace Implementation," 189.
36. CIC, "Recovering from War," 34.
37. Comment from Janvier Nkurunziza (November 2008).
38. Addison, From Conflict to Recovery in Africa, 9.
39. World Bank and International Monetary Fund (IMF), Assistance to Post-Conflict Countries and the HIPC Framework (Washington, DC: World Bank/IMF, April 20, 2001).
40. Ohiorhenuan and Kumar, "Sustaining Post-conflict Economic Recovery," 6.
41. Ibid., 6.
42. Addison, From Conflict to Recovery in Africa.
43. Ibid., 10.
44. Ibid., 10.
45. Ibid., 8.
46. Ibid., 10.
47. BCPR, Post-Conflict Economic Recovery: Enabling Local Ingenuity, 137-38.
48. Ibid., 137-38.
49. Ibid., 137-38.
50. CIC, "Recovering from War," 34.
51. Ibid., 34.
52. UNDP, "Violent Conflict," 171, 178.
53. Boyce and ODonnell, "Peace and the Public Purse," 294.
54. Ibid., 296.
55. Roland Paris, "Understanding the 'Coordination Problem' in Postwar State-building" (draft paper for the Research Partnership on Postwar Statebuilding, October 2006), 1.
56. Bruce D. Jones, "The Challenges of Strategic Coordination," in Ending Civil Wars: The Implementation of Peace Agreements, ed. Stephen John Stedman, Donald Rothchild, and Elizabeth M. Cousens (Boulder, CO: Lynne Rienner, 2002), 90.
57. Paris, "Understanding the 'Coordination Problem' in Postwar State-building," 6.
58. Jones, "The Challenges of Strategic Coordination," 90.
59. CIC, "Recovering from War," 4.
60. Ibid., 4.
61. Ibid., 89.
62. Alvaro de Soto and Graciana del Castillo, Obstacles to Peacebuilding, Foreign Policy 94 (1994): 69-83.
63. Woodward, "Economic Priorities for Successful Peace Implementation," 194.
64. Organisation for Economic Co-operation and Development (OECD), The Paris Declaration, para. 16.
65. Ibid., 32.
66. CIC, "Recovering from War," 8.
67. Ibid., 9.
68. Ibid., 34.
69. Paris and Sisk, Managing Contradictions, 6.
70. CIC, "Recovering from War," 34.
71. Richard Ponzio, Lessons Learned from Peacebuilding Strategic Frameworks since the Late 1990s (New York: United Nations Peacebuilding Support Office, September 14, 2007).
72. Erin McCandless, Integrated Approaches to Peacebuilding in Transitional Settings: Lessons from Liberia (Johannesburg: Institute for Security Studies, April 2008).
73. United Nations Development Group (UNDG), Guidance Note on UN Country Engagement in PRSPs (New York: UNDG, December 2003), 1.
74. Ibid., 1.
75. World Bank, Toward a Conflict-Sensitive Poverty Reduction Strategy, 8.
76. Erin McCandless and Ezekiel Pajibo, "Can Participation Advance Poverty Reduction? PRSP Process and Content in Five African Countries (Harare: African Forum and Network on Debt and Development, April 2003), 1.
77. McCandless and Pajibo, "Can Participation Advance Poverty Reduction?" 36; Fantu Cheru, The Highly Indebted Poor Countries (HIPC) Initiative: A Human Rights Assessment of the Poverty Reduction Strategy Papers (PRSP) (New York: United Nations Economic and Social Council, January 18, 2001), 3.
78. World Bank, Toward a Conflict-Sensitive Poverty Reduction Strategy, 14.
79. Cheru, The Highly Indebted Poor Countries (HIPC) Initiative, 3.
80. Ibid., 3.
81. World Bank, Toward a Conflict-Sensitive Poverty Reduction Strategy.
82. McCandless and Pajibo, Can Participation Advance Poverty Reduction? 1.
83. Cheru, The Highly Indebted Poor Countries (HIPC) Initiative, 4.
84. United Nations (UN), UNDAF Guidelines (New York: UN, April 1999), 4.
85. Ibid., 4.
86. Ibid., 5.
87. Ibid., 4.
88. Ibid., 2.

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