Columbia International Affairs Online: Working Papers

CIAO DATE: 11/2011

The Economics of Peace

Graciana del Castillo

August 2011

United States Institute of Peace

Abstract

The United States’ longest war, in Afghanistan, and one of the largest relief efforts in U.S. history, in Haiti, are testing U.S. leadership in the world, as well as its determination to deal with fiscal imbalances, the debt burden, and economic malaise at home. U.S.-led reconstruction in both countries is lagging and becoming increasingly expensive, and it will not succeed without a major change in strategy. U.S. goals in both countries will be elusive unless the misguided policies and misplaced priorities under which reconstruction has been taking place change in fundamental ways. Each country is different and will need to develop its own strategy. Nevertheless, we have identified basic rules, lessons, and best practices that national policymakers and the international community should keep in mind to improve the provision of aid and technical assistance. During the immediate transition from war or chaos, reconstruction is not development as usual: The peace (or political) objective should prevail at all times over the development (or economic) objective. Without peace there cannot be development.