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Foreign Aid and the Recurrence of Violence in Post-Conflict Countries

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Foreign Aid and the Recurrence of Violence in Post-Conflict Countries FOREIGN AID AND THE RECURRENCE OF VIOLENCE IN POST-CONFLICT COUNTRIES A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Master of Public Policy in Public Policy By Lesley Diane Hsu, B.A. Washington, DC April 12, 2019 Copyright 2019 by Lesley Diane Hsu All Rights Reserved ii FOREIGN AID AND THE RECURRENCE OF VIOLENCE IN POST-CONFLICT COUNTRIES Lesley Diane Hsu, B.A. Thesis Advisor: Andreas T. Kern, Ph.D. ABSTRACT There has been increasing attention and research focused on the sustainability of peace in post-conflict countries. Countries that emerge from civil war become highly dependent on foreign aid to provide basic services and help rebuild institutions and infrastructure. However, research has shown that in post-conflict countries, there is a fifty percent chance that a country will re-engage in conflict, or otherwise become highly aid dependent. This statistic is concerning as foreign assistance is often necessary to help reconstruction efforts, and counterproductive aid can have devastating consequences in a fragile country. As a result, the following paper will investigate what kind of role foreign aid may have in deterring renewed conflict. Using data on the aid share of GDP following dyadic peace agreements in the time span between 1975 and 2005, the analysis looks at the probability of the recurrence of violence within five years in countries just emerging from conflict. My main findings hint that an increased share of aid is associated with more lasting peace; however, this relationship is not significant. From a policy perspective, these results suggest that while foreign aid may provide a welcome economic boost to a country emerging from conflict, the effectiveness of the aid in helping maintain peace is more highly influenced by the environment in which it is disbursed. As a result, donors should be mindful of the context of the conflict when making decisions on how foreign aid is distributed. iii I would like to acknowledge my advisor, Dr. Andreas Kern, for his guidance and support throughout this process. Many thanks, Lesley Diane Hsu iv TABLE OF CONTENTS Introduction ..................................................................................................................................... 1 Background ...................................................................................................................................... 4 Literature Review ............................................................................................................................ 7 Conceptual Framework ................................................................................................................... 9 Empirical Analysis ........................................................................................................................ 13 Data Description ......................................................................................................................... 13 Kaplan-Meier Survival Model .................................................................................................... 18 Regression Results ...................................................................................................................... 20 Conclusion ..................................................................................................................................... 24 Appendix ....................................................................................................................................... 26 References ..................................................................................................................................... 33 v LIST OF FIGURES Figure 1. Post-conflict Countries and Number of Failed Peace Agreements ................................ 15 Figure 2. Duration of Peace Agreements by Year ......................................................................... 17 Figure 3. Kaplan-Meier Survival Curves ...................................................................................... 19 LIST OF TABLES Table 1. Logit Results .................................................................................................................... 22 Table 2. Post-Cold War Logit Results ........................................................................................... 23 Table A1. Definition of Variables ................................................................................................. 26 Table A2. Descriptive Statistics .................................................................................................... 28 Table A3. Post-Cold War Descriptive Statistics ........................................................................... 28 Table A4. List of Peace Agreements ............................................................................................. 29 vi Introduction With the growing prevalence of civil war over any other type of conflict in the past few decades, much research has been dedicated to investigating the conditions and motivations that foster intrastate violence. One recurring theme that studies have found is that economic performance or the presence of an economic shock has been a significant factor in predicting the onset of conflict. For example, countries with lower levels of GDP per capita income, slower growth rates of per capita income, and more increased dependence on a primary commodity export have displayed higher risks of entering into conflict (Collier and Hoeffler 2002; Fearon and Laitin 2003). Given that foreign aid becomes an important source of revenue for post- conflict countries, especially in the years following conflict when inflows are substantially enlarged from humanitarian and state aid appeals, the distribution and application of aid plays an important role in creating and sustaining an environment that discourages and prevents conflict. Low economic development in the years following conflict can increase the risk of conflict relapse, as individuals are more likely to enlist with rebel groups in these conditions (Walter 2004). Therefore, this paper will be exploring the following question, what is the relationship between foreign aid and the likelihood of recurring civil violence in post-conflict countries? The difficulty of ending civil conflict has been complicated over the years with changes in the dynamics and technology of organized violence, and varying levels of international intervention. For example, Howard and Stark (2018) argue that the international political environment has played a large a role in the sharp decrease in number of civil wars that have ended in a decisive victory after the Cold War, pushed along by the “absence of major threats and the quest for democratization” by the US and their allies (2018, 130). In Doyle and Sambanis’ (2000) dataset covering civil wars from 1944 to 1997, 20% (13 of 61) of conflicts 1 during the Cold War ended in a “tie” (truce or settlement) while 70% (38 of 54) of conflicts after the Cold War ended in a “tie” (Fortna 2009). This has placed more pressure on the cooperation and voluntary demobilization of all participating groups to maintain peace. Outside interventions have consistently played a role in initiating, negotiating, and ending conflict. While civil conflicts are limited within one country’s borders, neighboring countries often have an interest in the outcomes of conflict as they are impacted as well through the migration of refugees fleeing violence, disruptions in trade, and possible overflow of violence into their own borders. For example, because of shared ethnic backgrounds, states may intervene indirectly through covert support, allowing arms transactions, or allowing rebel operations on their territory (Gleditsch 2007). In the post-conflict period, outside intervention has often continued in forms such as support of peacekeeping forces, implementation of development programs, and involvement in institutional reforms, for which foreign aid has been a primary source of funding. Once a conclusion to a civil war has been reached, the costs of long-running violence and destruction are even more difficult to overcome. Even in countries such as Sierra Leone and Liberia that have deliberately included disarmament, demobilization, and reintegration (DDR) processes in their peace agreements, the implementation of these mechanisms has not always been successful. Countries that have experienced war “have a two to four times higher risk of subsequent war,” which becomes substantially decreased after maintaining post-conflict peace for 10 years, but still remains higher than in pre-war conditions (Collier et al. 2003, 104). In fact, a 2011 World Development Report found that “90 percent of the civil wars since 2000 occurred in countries that had experienced a civil war in the previous 30 years.” (von Einsiedel et al. 2014, 3). Collier et al. (2003) have referred to this cycle of violence as a conflict trap. 2 As a result, my research attempts to build on this growing area of research and focuses on how the international community has attempted to maintain peace and security, specifically through the distribution of foreign aid to post-conflict countries. My key hypothesis is that countries with higher aid shares of GDP are less likely to revert back to conflict, which is tested using a replication dataset that contains a compilation on dyadic peace agreements from 1975
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