Investing in Peace: How Development Aid Can Prevent or Promote Conflict 9781315703251, 9780765609786

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INVESllNG IN PEACE

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INVFSfING IN PEACE How DevelopmentAid CanPrevent Or Promote Conflict

Robert J. Muscat

Routledge

Taylor & Francis Group LONDON AND NEW YORK

First published2002 by M.E. Sharpe Published2015 by Routledge 2 Park Square,Milton Park, Abingdon, axonOXl4 4RN 711 Third Avenue, New York, NY 10017,USA Routl ~dge is an electronic,

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No part of this book may be reprintedor reproducedor utilised in any form or by any electronic,mechanical,or other means,now known or hereafterinvented, including photocopyingand recording,or in any information storageor retrieval system,without pcnnissionin writing from the publishers. Notices No responsibilityis assumedby the publisherfor any injury andlor damageto personsor property as a mailer of produetsliability, negligenceor otherwise, or from any usc of operationof any methods,products,instructionsor ideas containedin the material herein. Practitionersand researchersmust always rely on their own experienceand knowledgein evaluatingand using any information, methods,compounds,or experimentsdescribedherein. In using such information or methodsthey should be mindful of their own safetyand the safety of others, including partiesfor whom they have a professionalresponsibility. Produi:t or corporatenamesmay be trademarksor registeredtrademarks,and an: usedonly for identilkation and explanationwithout intent to infringe.

Library of CongressCataloging-in-PublicattooData Muscat, Robert J. Investing in peace;how development aid can preventor promoteconflict I by Robert J. Muscat. p. cm. Includes bibliographical referencesand indeJI.. ISBN 0-7656-0978-9(alk. paper) - ISBN 0-7656-0979-7(pbk. : alk. paper) I. Economic assistance.2. Economicdevelopmeot. 3. Ethnic conflict. 4. Conflict management.I. Till e. HC60.M833 2002 338.9I--dc21

2001057822 ISBN 13: 9780765609793(Pbk) ISBN 13: 9780765609786 (bbk)

For my children David, Joshua,and Elysabeth

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Contents

Preface Acknowledgments

xi xix

PartI: Conflicts, Causes,and EconomicDevelopment

1. Introduction: Conffict and the InternationalDevelopment Agencies The Focusof InternationalAttention: Full-Blown Crises and Their Aftermath The Searchfor More Effective Prevention The Many Forms of Internal Conflict InternationalTerrorism The Scopefor Early Prevention Mandatesand Competencefor an OverdueResponsibility

2. Confficts Fought,Confficts Avoided: Nine Cases Conflicts Fought: Aid Complicity Pakistan: Complicity of Donor Advice Rwanda:Donor Culpability Sri Lanka: OpportunitiesTaken,and Missed Yugoslavia:EconomicRightsand IMF Responsibility Conflicts Contained,Conflicts Avoided: SomeAid Assists Malaysia: Conflict Preventionas the Political-EconomicCore Thailand: Learning and Foresight Bhutan: Accommodation Mozambique:PreventingConflict Recurrence Mauritius: Ethnic Power-Sharingand Economic Equity Without Preferences

3. Developmentand Conffict: Connectionsand Precursors Development,Aid, and Conflict: The PeacePresumption Development-ConflictConnections:Exacerbation or Amelioration? DemocraticOptimism

3 8 10 19 21 25 31 44

45 45 51 60 70 74 74 82 92 93 97 103 103 109 124 vii

viii

CONTENTS

SomeDevelopmentParticulars:Illustrationsof Conflict Effects Conflict Modeling and Prediction Getting from Causesto Interventions:DenseReality versusSalientFocus The Fallibility of Conflict Forecasting Illusive but Real: NonmaterialMotivations Conclusion:Multiple CausesCall for Multiple Interventions

127 137 146 150 153 156

Part II: Toward an Agendafor Conflict Prevention

4. Relevanceand Assessment Conflict Assessment

5. Inducing NonviolentPolitics and Conflict Management Top-Down: ReengineeringPolitics Developmentof Civil Society Bottom-Up: BehaviorChangeand Civil Society

165 168 176 176 181 185

6. Economicand SectorPolicies: Reforms,Preferences,

and Harmonizationof Interests Across-the-BoardReform Privatization:Transferof StateAssetsto PrivateOwnership Labor Market Liberalization Changesin Group EconomicRights PreferencePolicies Taxation Internal ResourceAllocation RegionalPreferences ChoosingAmongAlternative Projects Formal Education LanguagePolicy Agriculture Civil ServiceReform and Modernization Conclusion Postscript:Demobilization

7. Persuasion,Leverage,and Sanctions

The Role of Ideas:Against Utopianism,Triumphalism, and Ignorance Ordinary DevelopmentResearch:Illuminating Frictions and Fictions

195 195 201 205 206 207 215 217 217 219 220 223 224 225 227 228 232 232 235

CONTENTS ix

Persuasionand Leverage ResourceAllocation Among Countries:From Support to Withdrawal When Nothing Else Works: Sanctions Donor Coordination:PracticalObstacles Conclusion SelectedBibliography Index

236 238 243 246 248 251 257

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Preface

As I headedfor the front door of the hotel on Zagreb'smain square-itwas in 1996,four yearsaftertheendof theCroatianphaseof theYugoslavbreakup conflict-straightfrom theairportanddraggingmy luggage,I wasapproached by a shabbily dressedold woman. She thrust a piece of paperin my face, which I could not read. No one in the passingcrowd stoppedto help an obviously puzzledforeigner.Bewildered,I enteredthe hotel lobby. The man behindthe registrationdeskhadseenmy little encounter."Justa Gypsy!" he sneered. A little later I was back in the lobby to meet three of the people with whom I hadcometo work. Onewasa womanwho told a chilling story about her family. She camefrom Vukovar, a city in northeasternCroatia that the Yugoslavarmy hadreducedto rubble during a three-monthsiege.While the siegewas under way she had managedto escape,taking her four-year-old daughterbut leaving her husbandbehind.Soonafter, anotherVukovar refugee whohad escapeda bit later told her that her husbandwas dead.Their next-doorneighborhad bludgeonedthe husbandwith a hammer.They had known the killer and his family for years.The two families often had eaten togetherand their children were playmates. Why had the neighborturned into a killer of a fellow besieged?My brush with contemptfor· Gypsieshad beena foretaste.The families of the husbandandthe killer wereall CatholicandconsideredthemselvesCroatian, ethnically andhistorically (settingasidethe decadesof the sharedYugoslav identity, which provedto be only a veneer).The husband,however,had had a Serb grandfatherand bore his grandfather'sSerb family name.As with the "racial" laws of Nazi Germany,this was enoughSerb ancestryto brand the husbandan enemy outsiderin the neighbor'seyes, despitethe husband'sown completeidentity with, andloyalty to, his CroatianCatholic ethnicity. The woman'sconcludingaccountof life in Zagrebseemed to show that the dominanceof ethnic identity for determiningbehavior and rules in Croatian society at the time was not limited to the places like Vukovar experiencingextremesof fear and combat.In Zagreb,becausethe woman'sfamily name was Serb, her four-year old, when she fell ill, was refusedthe free healthcareroutinely providedto refugeesfrom Vukovar and other areasthe Serbshad occupied.After the motherlearned xi

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she was a widow, she revertedto her Croatianmaidenname.The government then acknowledgedthe child's reestablishedCroatian identity and therebyher eligibility for medical attention. That sameyear I visited Lombok Island in Indonesiaas a memberof a teamevaluatingsomeU.S. Agency for InternationalDevelopment(USAID) food aid projects.Lombok had seensomeof the worst slaughterduring the anticommunistrampagein Indonesiain 1965.One of my local interlocutors talked about the killings. He said a friend of his was amongseveralyouths who were roundedup by an army unit and pressedinto a few hours' service to slay "communists"the military had takeninto custody.Neither his friend nor anyoneelse, as far as he could remember,had the slightest idea then what a communistwas.The soldierstold themcommunistswerepeoplewho wantedto banish Islam and the worship of Allah from Indonesia,and that this was sufficient reasonfor them to be killed. The youths were handed machetesand proceededto dispatchthe prisoners.The friend killed two, thenbeggedto be excused.Accordingto my informant,his friend (I beganto suspecthe was actually speakingabout himself), now a middle-agedand better-informedadult like the rest of us, has laboredunderfeelings of guilt ever since. The apparentmotivationsfor the egregiousbehaviordescribedto me in thesetwo conversations,continentsand culturesapart, illustrate the opposite endsof the rangeof explanationsone finds in the literatureon conflict. In Vukovar a man kills spontaneously,going so far asto attackone-on-one; he actsindividually, motivatedby internalizedconvictionthat "Serb-ness"and its ineluctably associatedthreat to Croats-isinherent in any Serb derivation, evenunto the third generationfrom one grandparent,not offset by the Croat three-quarters.This is an exampleof "primordialism"-the deepinfusion of an ethnic identity-basedworldview, a view that ethnicity (a term that can encompass,in different degreesfor different groups,language,religion, culture, homeland,and a group'ssharedbelief in common origin) is the fundamentaldeterminantof vital interestsand the fundamental sourceof conflict behavior.In Lombok the aggressionwas invoked by manipulativeauthorities.Having conjuredup primordial fear and hostility, the local military authoritiesinducedviolenceby activatingreligious apprehensionthat had otherwiseremaineddormant or, more likely, had never beenknown before by the drafted killers. Even if one grants(the facts remain in dispute)that the nationalcoup leaders,and perhapsthe local coup implementers,were(at leastpartly) driven by concernsfor the nation'swellbeing, much of the local violencewas individual score-settlingin the guise of anticommunism. Speakingof this episodeand of all the domesticviolencesinceindepen-

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xiii

dence,Indonesia'smost prominentwriter, PramoedyaAnantaToer, observed,"Everythingcamefrom the government,everythingwas a provocation." In his view, the army attackedthe communistsin 1948to impress the West. The Left then respondedby killing many Muslims. Then perhapsa million communistsand suspectedsympathizers,a large numberof whom were ethnic Chinese,were killed in 1965 in responseto an alleged communistcoup.l Thus,precipitatingthis violencethereweremanystrands, many motivations,amongactorsat different levels of the society-amix of religion, ethnic prejudice, opportunism,political ambition, and national interest. The primordial interpretationsuggeststhat thesehostilities are inevitable and recurrent.Suchconflicts would be difficult if not impossibleto prevent. It hasbeena commonplaceto attribute Balkan wars to primordial hostility. After all, whateverthe particularcircumstancesmay havebeenthat sparked eachconflict, Balkan history seemsmarkedby a propensityof the region's peoplesto leap at eachother'sthroats.The Muslim Moros rebelling in the southernPhilippinessince the country'sindependencein 1946 also fought againstthe American takeoverof the islands from Spain in the nineteenth century after resistingSpanishrule back to the sixteenthcentury.The facile characterizationof suchhistoriesof recurrentconflict as primordial is intellectually seductive;it enablesone to avoid the difficult task of mastering complexrealitiesandto sustain aflattering conviction that one hasplumbed the depthsof the problem. A primordial explanationcan also lead one to concludethat interventionsto prevent or resolve such conflicts are futile. Why risk loss of life or incur pointlessexpenditures? In fact, despitethe overwhelmingevidencethat aggressionis a strong propensityof our species,the primordialismexplanationfor violent behavior, especiallyorganizedwarfarebetweenparticularlarge groups of people, is virtually alwayssimplistic and,consequently,a naivebasisfor public policy. Apparently primordial fears and hatredsoften obscureand mix with hardnosedissuesof economicsand power. By the sametoken, it would be a mistaketo underestimate or dismissthe powerof nonmaterial,non-Realpolitik issues-such asrememberedhistories,recentor evenremoteviolenceagainst a group'scollective forebears,perceptionsof religious or cultural hostility, ancientschismsthat appearto outsidersasdoctrinal minutiae,rival claimsto placesof symbolic or cultic importanceonly-to motivategroupsto take up arms. The realities of violent conflict are often densein the complexity of their origins and their accumulatedmotivations.Conflicts that haveroots in economicand political competition often becomeinflamed and turn "primordial" through the arousalof identity differences. For most people,ethnicity is a given at birth and inculcatedin childhood

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as the core of the individual's identity, a core that is sharedwith all others who claim (or even reluctantly partakeof) a commonancestry.Under this definition,2 ethnicity is the widest and most elastic conceptof kinship. For convenienceI use"ethnicity" (ratherloosely) to refer to any group that may be described,or describesitself, in terms of caste,tribe, nationality (in the anthropological,not legal, sense),culture, or race,all categoriesthat mayor may not coincidewith religion and language.Typically, evenin the absence of defining physical characteristics,a group's ethnicity is evident to itself andto nonmembersthrough"markers"suchas languageor dialect,customs, traditional costume,and rituals. Many writers haveexpatiatedon the complexity of groupidentity andthe multiplicity of ascriptive patternsfound among human societies.In some casesseveralcritical markerscoincideto define multifaceteddifferentiation betweenone or more "ethnic" or "national" groups within a state. In Sri Lanka, for example,the Sinhalesemajority andTamil minority are differentiated by regionalconcentration,language,and religion. Someof the ethnic Chineseminorities in SoutheastAsia are differentiatedfrom the population groupsof longer residenceby physical appearance,religion, (second)language,cuisine, andeconomic occupations.In other cases,many markers maybe sharedby groupsthatdiffer only with respectto onesignificantmarker, a single difference that may be sufficiently delineatingto be the basis for enmity. One exampleis the Protestant-Catholicdifferentiation in Northern Ireland. Ethnic communitiescommonly claim a primordial within-group attachment and a history that is uniquely theirs, separating"us" from all other "them." Writers on ethnicity often observethat the historical and primordial characterof many communitiesis "imagined," resting on beliefs that are partially fictional if not deliberately (and often recently) invented; this is doneto createa senseof nationhood,and political commoninterests,within an ethnic group that previously had only loose commonidentity and weak cohesionfor pursuingpolitical objectivesas a bloc. It is of more than academicinterestthat thehistory of manyethnic groupshasbeenmisconstrued, often deliberately,to overstatethe continuity, homogeneity,anddifferentiating characteristicsthat are claimedto define their uniquenessand to support the justice of their present-dayclaims. The view that contemporaryethnic groupsare historically and socially primordial would appearto supportthe ideathat (at leastmany) ethnic conflicts are recurrentlyunavoidable.Under this view, the conflicts also are primordial, basedon divisions and relations too deeplyantipatheticto be overcomeor transformed.The adoptionby one group of an "imagined" communalmyth implying hegemonyover another group may provoke the latter to developa countervailingmyth of its own.

PREFACE xv

The historical facts often belie all theseassertions.The modem Sinhalese racial reinterpretationof its ancienthistory and relationshipwith the Tamils is an exampleof retrospectivemyth-making.3 Daniel Patrick Moynihan and others have describedhow ethnicity has reemergedin the modemstate,especiallysinceWorld War I anddespitethe powerful ideology of the liberal state,basedon individual citizenshipand sharedfounding principles, and despitethe long and now waning hold of Marxism, basedon classconsciousness and classintereststhat would purportedly override the primitivism of ethnicity and ascriptive association. Whetheralongthe linesof theAmerican"melting pot" or theEuropeannationstatein which historic cultural-linguisticdifferentiationwould be attenuated through assimilationinto the dominant national community, ethnicity had seemedfor a time to be diminishing in salience.Among most developing countries,however,there are few signs of ethnicity being submergedunder conceptsof citizenship or due to the effects of technologicalglobalization and the spreadof masscultures.Ethnic politics, low ratesof intermarriage, and widespreadethnic conflict give vivid indication of the continuing,perhapsrising salienceof ethnicity. In the short run, especiallyin societiesthat are in the midst of, or just emergingfrom, violent conflict, it may seemas if ethnic differencesand their associatedanimositiesare immutable social facts, divisions that are unbridgeable.In fact, numerousexamples exist of ethnicitiesthathavemerged with othergroups,or assimilated.Many languageshavedisappearedor have becomecultural relics spoken by small, aging populations.The intermarriage rate among sharply differentiatedethnicitiesis seldomabove 10 percent,andevenwherethe rate is significantly higher, as it was in Yugoslavia, especiallyin Bosnia,intermarriageis no guaranteethat old animositiescannot be revived by extremistpoliticians. Conversely,thereare alsoexampleswhereintermarriagehasbeenextensive for severalgenerations,easinginterethnictensionand producinga new ethnic amalgam,as with the Sino-Thai and the Sino-Filipino. Theseethnic andcultural changesarelong-run phenomena,but they do attestto the mutability of ethnic identity. In the yearsahead,as in the pastfew decades,it is the developingcountries-notthe wealthy democraticcountries-thatare at risk of falling into internal armedconflict. The "internationaldevelopmentcommunity"-that is, the bilateral and multilateral developmentassistancebanks,aid agencies, and nongovernmentalorganizations-maybe able to contributeto peaceful resolution of material differences,inequalities,and grievancesbefore the partiesfind themselveson a downslidetoward violent conflict. Theseorganizationsare often deeplyinvolved in the financing and shapingof the eco-

xvi

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nomic developmentprocess,years before such downslidesoccur. International intervention,especiallyproblematicwhen the only remedyappearsto be military, is usually contemplatedat the eleventhhour or when violent conflict is alreadyunderway andproducinghumanitariandisaster.This book is an effort to explore conflict prevention-howthe internationaldevelopmentagencies,working on fundamental,long-runeconomicandinstitutional problems,can alleviate some of the problemsthat have often been at the roots of contemporarycivil wars in developingcountries. The conceptof fundamental,nonviolentresolutionis deeplyembeddedin the institutions, political processes,acceptanceof rule of law, and shared value systemsof the establisheddemocraticstates.Resolutionof differences takesplace constantlyat all levels of governanceand jurisprudence,and in the institutionsof civil society.Though all cultureshavetraditional systems of conflict management,the developingcountries,especiallythe recently independentstateswith little history of self-governmentas entities within the inheritedcolonial boundaries,generallyhaveconflict managementinstitutionsandnormsthat are weakfor resolvingdifferencesat the statelevel, or betweenrival subpopulations.For betteror for worse,the only instruments the (official) internationalcommunityhasfor influencingthe underlyingtensions and structures(even in the exceptionalcaseswhere,as occupiers,the internationalpowersforcing the resolutionimposepolitical structures,as in Bosnia, Cambodia,and Kosovo) are the developmentagencies(and to a more limited degree,the InternationalMonetaryFund [IMF]). Thereremain groundsfor doubt that the transplantswill not be rejected.The ability of the developmentagenciesto contributeto conflict-mitigating economicchange is much greaterbefore violent conflict embittersthe antagoniststhan after. That theseagenciescan be significantly relevantto conflict will be demonstratedthroughoutthis book. The problem is how to make such relevance mitigating rather than exacerbating,that is, how to identify mitigating and preventionpossibilities,and how to capitalizeon them. The developmentagencieswhoseactivities arethe main focus of this text compriseboth the international,or multilateral, institutions (i.e., the World BankandtheAsian,African, andInter-Americanregionaldevelopmentbanks, and the various developmentassistancefunds and agenciesof the United Nations [U.N.] system),and the bilateral, or individual country, agencies that administerthe separateforeign aid programsof donor countries.The leading bilateral aid providers,in terms of influence and funds, are among the twenty-onemembercountriesof the DevelopmentAssistanceCommittee (DAC) of the Organizationfor EconomicCooperationandDevelopment (OECD). Taking togethertheir bilateral programsand their contributionsto the internationalagencies,the largestbilateral aid providersare Japan,the

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xvii

United States,Germany,France,the Netherlands,United Kingdom, Italy, Sweden,Canada,Denmark, and Norway. Beyond the donor agencies,the "internationaldevelopmentcommunity"asa whole alsoincludesa vastnumber of nongovernmentalorganizations(NGOs), privatefirms, researchinstitutes,academics,and"developmentpractitioners."Violent conflict demolishes the work of this community.Needlessto say, it is the noncombatantpopulations of the developingcountrieswho bearthe greatestcostsof violent conflict and who reapthe greatestbenefitswhen conflict is prevented.

Notes 1. Far EastEconomicReview,June15,2000,p. 79. 2. From Horowitz, 1985,pp. 52-53. 3. SeeLittle, 1994,pp. 16,26-30.

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Acknowledgments

It is twelve yearssince I was first drawn to thinking aboutthe problemsof failed statesand violent conflict in developingnations.After a careerthat includedlong sojournsin countriesblessedwith relative social stability and improving welfare,I was askedby JohnErikssonin 1989to contemplatethe problemsCambodiawould inherit if the ongoingpeacenegotiationswere to succeed,and what challengesthe international developmentcommunity would face in the effort that would follow to reconstructan economyand societyemergingfrom sucha horrific experience.One thing led to another, especially an assignmentfrom Robert Picciotto to explore the role of the World Bank in postconflictreconstruction.It was a short stepfrom working on reconstructionto thinking aboutpreventionas vastly to be preferred,and about what the developmentcommunity could do to help their "beneficiaries" avoid resortingto violent conflict to resolvetheir internal differences. Although lowe Erikssonand Picciotto a specialdebt (I will not say special thanks;to move from working on countriesmaking progressto countriestearing themselvesapartis not exactly a felicitous careerchange),therehavebeen many otherswho, in the courseof work or casualrumination,knowingly and unknowingly contributedto my educationon theseproblemsover theseyears. I am especiallygrateful to JohnEriksson,RonaldRidker, Milton Esman, DonaldMcClelland,Michael Cernea,Colin Scott,Nat Colletta,andWilliam Renisonfor readingand commentingon the manuscriptin draft. They provided encouragement, savedme from numerouserrors, and made valuable suggestionsregardingthings overlooked.Kevin P. Clementsgave a major assistby taking me on as a visiting fellow at GeorgeMason University's Institute for Conflict Analysis and Resolution(lCAR), wherehe was director at the time. The book would not havebeenpossiblewithout the accessto ICAR's researchmaterialsand the university library. I also owe thanks to DeborahA. Brautigan, Ramish Chander,Eric Griffel, Ronald J. Herring, DeveshKapur, PrincetonLyman, Michael Lund, C. Robless,Leo E. Rose, Stanley W. Samarasinghe,TownsendSwayze, Norman Uphoff, Joseph Wheeler,andMauriceJ. Williams, andto JamesLavelleandRichardMollica. Donald Snodgrassis due particularthanksfor providing me with his manuscript on Malaysia.I am alsoindebtedto E. WayneNafzigerfor sharingwith me his draft manuscript,"The Political Economyof PreventingHumanitarian Emergencies." xix

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Part I

Conflicts, Causes,and EconomicDevelopment

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1. Introduction Conflict and the International DevelopmentAgencies

Our agehas beenboth remarkableand dreadful, the best or worst of times dependingon where one lived and when. With the developmentof enormously destructivemilitary technologies,the mobilization of entire populations and economiesfor warfare,and the astonishingpower of cruel leaders andlunatic ideologiesover the minds of large populations(somemore educated than in any previous era), wars betweenstatesand againstpeoples have surpassedprevioushumanhistory in their casualties,viciousness,and destruction.Oneestimateputsthe numberof peoplekilled by armedconflict in the twentiethcenturyat over 100 million, with another170 million deaths from political violencenot associatedwith warfare.1 Over this sameperiod, increasinglyin the secondhalf of the twentiethcentury,advancesin science and industry, public health, economicactivity, and the arts of governance have brought to the populationsof many nations an unprecedentedrise in longevity andmaterialwealth.Therehasalsobeena wideningacceptanceof the norms of an open, humane,and democraticsociety as the birthright of the citizensof a modernstate.The flow of capital and technologyfrom rich to poor nationshasenabledsomeof the lessdevelopedcountries-those that haveadopteddevelopment-enhancing economicpolicies,andthathavemaintainednonviolentpolitics-toreducepoverty and transformtheir economies and living standardsat a faster rate than ever was achievedby the world's now rich economies. In a fundamentalturn in history, interstatewar erupting in WesternEurope or emanatingfrom Japannow appearsas unthinkableas war in North America. In five decadesof peaceamongthem, the industrially advanced, democraticstateshave developedhighly interdependentsecurity arrangementsand economicsystems.They have createda panoply of treatiesand interstateinstitutions to manageproblemsamong themselves.They maintain constantdialogueat many levels in regular searchfor accommodation and positive-sumsolutions. Since World War II the network of U.N. and otherinternationalsecuritysystemshaspermittedvery few cross-borderinvasionsto succeed,despitethe global reachof the Soviet-U.S.rivalry and the postcolonial proliferation of new and fragile sovereignstates.A cau3

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CONFLICfS, CAUSES, AND ECONOMIC DEVELOPMENT

tiously optimistic view on the future of interstatewarfarehasbecomecredible. As framedby Strernlauand Sagasti, It is now safe to concludethat the ageof imperialismhasfinally passed.

Neverbeforehas so large and diversea constellationof sovereignstates, coveringall of the world's habitableterritory, coexistedso peacefully.If current trendshold, historiansmay one day mark the secondhalf of the 20th century as the beginningof the end for significant interstatewars, fulfilling the dreamof statesmensincethe Treaty of Westphalia(1648).2

It may also be safeto concludethat the age of totalitarian ideologyis winding down. The worst scourgesof the last century, perhapsthe worst in all recordedhistory, havebeenthe vast ideologically motivateddebaclesof the Nazi, Soviet,Maoist, and Khmer Rougeregimes. Thoughboth ideologicalandutopianfervor havevirtually disappearedas sourcesof large-scalestate-sponsored violence (whetheror not state-sponsoredIslamic fundamentalismis emergingasa continuingexceptionremains to be seen),the large numberof ongoing or recentdomesticconflicts of a religious or ethnic characterdemonstratethat the world hasfar to go before a similar statementregardingthe waning of internal violent conflict might also be credible.Despitethe fact that the combatantsin most if not all these internal conflicts define themselves,and their opponents,in ascriptive or religion, history, commondescent,and so forthcultural terms-language, many of the conflicts tend to contradict rather than support Samuel P. Huntington'sthesis that the world's principal conflicts after the Cold War have been, andwill continueto be, betweenentire civilizations-Western, Islamic, Confucian,Hindu, Slavic-Orthodox,and others.3 In many African conflicts especially,the combatantgroupshavebeenco-membersof a common largerculture, much closerto eachotherlinguistically, religiously, and culturally than to any other outsidegroups.In somecases,suchas in Sudan or New Guinea,someof the combatantshavebeenanimists,outsideany of the main "civilizations." Turkey is an exampleof a heterogeneous country that does not fall neatly into one "civilization" or another,nor would the Kurdish insurgencyillustrate an intercivilization fault line. The internationalresponsesto some of the conflicts have also crossed "civilization" lines. In Bosnia,predominantlyChristianand"Western"countries supportedthe Muslim center,which fought againstEasternOrthodox and Catholic opponents.(The most active proponentof civilization clash, Osamabin Laden,ignoredthe Bosnianinterventionandthe West'sinterventions in Kosovo and Kuwait, events inconsistentwith his proclaimed worldview.) During the battle in Chechnyain the fall of 1999,betweenlocal

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 5

and Russianforces, the presidentof Chechnyadecried the absenceof foreign Muslim supportandcalledfor help fromChristiannations.4 Aside from its critics who seethe thesisas glossing over the complexitiesof the postCold War world, Huntington's paradigmis (paradoxically)too narrow an explanationof the conflicts with which we are concernedhere. Nevertheless,"ethnic" fault lines (often separatingdifferentiatedgroups within Huntington'slarge"civilization" categories)havebeencentralto Third World internal conflicts, to a lesserextentin CentralAmericanconflicts than in Africa and Asia, and will be at the centerof this book. Ethnicity remains importantin modemWesternnations,evenin their politics, but differs substantiallyfrom ethnicity in developingcountries.As Martin O. Heislerpoints out, the fact that almostall societiesare multi ethnic often leadsto a view that ethnicboundariesareeverywheresharpandthatethnicity shouldeverywhere be a fundamentalcategory of sociopolitical analysis.To the contrary, the classic anthropologicalparadigm,drawn from study of small, premodern societies,bearslittle resemblanceto the natureand function of ethnicity in complex,modemsocieties.In the former, ethnic groups"form whole social systemsand comprisethe basicsocial,political andeconomicenvironments for their members'lives." In the latter, "insteadof such integrity and comprehensiveness, we find predominantlysymbolic or utilitarian modes of ethnicity." In the former, the individual is moldedcompletelyinto the inherited ethnic identity from childhood;in the latter, the individual hasthe social freedomand mobility, and educationalexposure,to modify or reject adherenceto worldview, religious, esthetic, linguistic, marital choice,or othercharacteristics(or "markers)denotingthe identity impressedduring childhood. In the latter, ethnicity is vitiated for functions outside the cultural and esthetic. Identity becomesshapedby a complexof interestsandassociationseconomic class and function, profession,political conviction, leisure preferences,and so on. Ethnic frictions are betterdescribedas competition and contentionratherthan conflict, althoughthereremainsomeobviousexceptions(e.g.,NorthernIreland,the Basqueprovincesof Spain,fringe xenophobic groupselsewhere).5For the most part, the developingnationsare in transitionbetweenthe "anthropological"and "modem" paradigms.We will return repeatedlybelow to the problemsof identity-basedconflict and their implications for preventiveinterventions. Although the threat of interstatewar has diminished, potentialitiesfor suchconflicts (andassociatedterrorism)remain.Someregionscontainmore sourcesof potential interstateviolence than others, especially the Middle East, the Asian subcontinent,the Caucuses,central Africa, and Northeast Asia. Someof the nationsinvolved may resortto military force to defendor advanceperceivedvital interests.One might plausibly argue that conven-

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CONFLICTS, CAUSES, AND ECONOMIC DEVELOPMENT

tional interstatemilitary aggressionis becominga lessviable option with each demonstrationthat the internationalcommunity is moving, howeverhaltingly, toward norms of acceptableintervention and willingness to mount conflictavoiding and peacekeepinginitiatives. Conversely,the willingness of the permanentU.N. Security Council membersto sanctionsuch interventions,or to incur the risks andcostsof military undertakings,hasvariedcaseby case. Repeateddemonstrationsof how difficult it is for the internationalcommunity to developa joint policy and put togetheran effective intervention coalitionmay actuallyencouragesomefuture potentialaggressors to discount the probabilitiesof such interventionshould they decideto resort to force. The current international fundamentalistterrorism to promote apocalyptic appearsto be a specialcase;rational weighvisions of global rearrangement ing of the risks of potential responseand consideringthe probabilities and implications of successor failure appearto havebeenof little consequence. Unfortunately,while therehasbeena declinein interstatewarfareand an increasein the effectivenessof international(andsomeregional)peacekeeping norms and institutions,and of multilateral action, to preventor contain internationalconflict, the post-ColdWar periodhasalso seena sharprise in violent conflictwithin states.By one count, during the post-ColdWar years of 1989to 1996therewere 101 armedconflicts of which 95 wereintrastate.6 Theseinternal conflicts havevariedin their intensity,from low annualcasualty levels to "ethnic cleansing"and genocide.Somehave spilled over borders and broughton, or exacerbated,violent conflict in neighboringcountries. Many have generatedlarge cross-bordermovementsof refugeesand internal populationdisplacement.As a first step in recording and monitoring these problems,conflict watcherscommonly distinguish betweenlevels of violence.One sourcerecordsfour levels: political tensioninvolving fewer than 25 political killings a year; violent political conflict-under 100 political fatalities a year; low-intensity conflict-between100 and 1,000 fatalities; high-intensityconflict-morethan 1,000a year.?Underthesedefinitionsthere were 17 high-levelconflicts underway in 1997,70low-intensity conflicts, and 74 violent political conflicts, for a total of 161.All but 11 of thesewereinternal. Becausesomelargenations(e.g.,Ethiopia,India, China)recordedseveralseparate internal conflicts, the numberof countriesinvolved was less,about 110. In 1997,high-intensityconflicts occurredin Congo(formerly Zaire),Afghanistan,Algeria, CongoRepublic(Brazzaville),Rwanda,Sudan,Sri Lanka, Turkey, Colombia, Albania, India-Pakistan,Burma, Burundi, Iraq, India (AssamandBihar), andTajikistan.Among the lower-intensityconflicts were severalthat subsequentlyescalated,causinghigh casualtyratesand/orpopUlation displacement,including Chechnya,Angola, and EastTimor. Kosovo had not yet appeared.The list changesyearby yearas someconflicts diminish or

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 7

are resolved,while otherserupt or escalatefrom previouslow-intensity or violent political conflict. Becausemany of theseconflicts havebeenfought with cheap,low-technologyweaponry,even with much individual slaughter effectedwith knives, the strugglescan continuefor yearswith neitherparty gaining a decisiveadvantage. Millions have died: in Theseconflicts have had appalling consequences. Bosnia 150,000,Rwanda 800,000,Sierra Leone 130,000,Sudan800,000. The United Nations Children's Fund (UNICEF)8 estimated850,000child deathsin Angola and Mozambiquebetween1980 and 1988 from combat and from the breakdownof food productionand healthservices.Millions of land mines that will take decadesto removecontinueto claim victims and keep substantialagricultural land out of production.Vast numbersof noncombatantshavebeenforced to flee their homes;in 1997 therewere over 35 million refugeesand internally displacedpersons.There has been massive destructionof economic infrastructure,housing, and productive facilities; further deteriorationof infrastructurefrom wartime suspensionof maintenance;loss or virtual collapseof economicoutput and concomitantslumps in per capita income; and years of developmentaborted.9 Calculationsof what might havehappenedhad conflict beenavoidedare obviously illustrative ratherthan empirical. In the caseof Sri Lanka, one study estimatedthat the opportunitycost ofthe civil war during the years1983 to 1988 was $1.5 billion, equivalentto over20 percentof 1988grossdomesticproduct(GDP).l0 In Rwanda, GDP fell to an estimated46 percentof its preconflict peak, whereasin Bosnia it fell to 27 percentand in Lebanonto 24 percent.ll An estimateof the outputMozambiquelost during the civil war yearsof 1982to 1992 providesanotherexample: Productionlosses[of an estimated$20 billion] were due to the deathsof some1.5 million peopleand the removalof over half the populationfrom customarysourcesoflivelihood (1.5 to 2 million were internationalrefugeesdisplacedinto campsor resettlementschemes,2 million were displacedbut not into formal settlements,andmorethan 1 million wereliving in the vicinity of their ruined villagesbut weresocioeconomicallyor psychologically displaced).The war also inflicted direct damageon markets, communications,public healthservices,andotherinfrastructure.Destruction of capital stock led to continuing lossesof output with difficult-tocalculateimpactson incomeflow and multipliereffects.12 The economiccosts of the civil war in Mozambiqueillustrate what has beena widespreadproblemin sub-Saharan Africa. Much attentionandanalysis have beendevotedto understandingthe relatively poor performanceof sub-Saharaneconomiescomparedwith other regions comprisedlargely of

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developingcountries.Nobel economistAmartya Senhasstressedtheimportance of civil war andother"destructivepolitical forces" asreasonsfor the economic regressacrossthe region. "In the list of worst (1960-1985)performers... the associationis hardto miss.If, for example,we pick the five worst performersin economicgrowth andthe five worst in mortality reduction... we geteight that are sub-Saharancountries,and six of thesehavehad major civil wars." These conflicts have implications for long-run regress;they "not only affect capital andoutput;they alsodisrupttradeandcommerce,discourageinvestments,and ... distancethe political leadershipfrom the economichardshipsof the population." Thesewars also have "spread"effects,"reducingregional tradeand, in neighboringcountries,causingpolitical instability, weakeningthe climate for economicinvestment,and inducing diversionsof economicresourcesto military purposes." 13 Looking at theseconflictsthroughtheireffectson a population's food status,Ellen Messeridentifiedforty-threedevelopingcountriesthat underwent "food wars"between1970and 1990,that is, conflicts resultingin reduced food productionand substantialfood deprivation,including caseswherehunger was deliberately induced as a form of weapon.I4 In casessuch as Afghanistan'slong-runningcivil wars, wherein 199825percentof all children agedsix to thirty-six monthsof agewere found to be wasted(severelyunderweight for height) and 52 percentstuntedin their growth, an entire generation canbe exposedto physical and intellectualimpairment. Civil wars leave a legacy of tom social fabric, and of lingering distrust and hatred amongthe surviving antagonists,who must createa new polity after the conflict has been resolved.The often vicious characterof ethnic conflicts, in which the armedcombatantsof one or both ethnicitiesdeliberately victimize the noncombatantsof the opposingethnic group, can cause lasting psychosocialimpairmentof victims of war trauma.Extendedconflict and victimization can producea culture of criminal impunity and violence, quite apartfrom the specialproblemof violent behaviorof unemployeddemobilized soldiers.IS The psychosocialeffects on individual victims have beenwell studiedin severalpopUlations,from Holocaustsurvivorsto Cambodiansurvivors.In recentyears,postconflictreconstructionprogramshave included assistancefor the creation or strengtheningof mental health services and projectsattemptingto encourageethnicallymixed communitiesto reachaccommodation,and ultimately reconciliation.

The Focusof InternationalAttention: Full-Blown Crises and Their Aftermath The relativeneglectof precrisisconflict preventionis apparentfrom the concentrationof internationalefforts, and scholarship,at the eleventhhour and

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 9

after-namelythe periodsof acutecrisis, conflict resolution,peacekeeping, andpostconflictreconstruction.It is not surprising,of course,that the advent (rather than the threat) of hostilities, mass population dislocation, ethnic cleansing,andoutrightslaughterhascommandedinternationalattention,along with the needsfor immediatepostconflict resettlement,including care for the victims and restorationof essentialsecurity and economic and social services.In addition to the establishedhumanitarianagenciesof the U.N. system(U.N. High Commissionerfor Refugees,the World Food Program), and the various refugeeand rehabilitation organizations createdin the wake of World Wars I andII, large numbersof intergovernmentaland nongovernmentalagencieshavebeenfounded.The developmentaid agencieshavehad to devoteincreasingamountsof their resourcesto these crises.Oneestimate put internationalspendingon emergencyand disasterrelief during the period 1990 to 1994 at $6 billion, about 10 percentof total official development assistance.The annualcost of providing for ex-Yugoslavrefugeesin Germanywas more than the entire Germanaid budget.16 A largeliteratureis emergingfrom practitionersand scholarsstudyingthe manyethical,technical,andmanagerialproblemsof "complexhumanitarian emergency"response.17These emergenciespose unique problems of children'shealth, women'sreproductivehealth, psychosocialtrauma,refugee camp managementand security, preservationof humanrights in situations of chaos,family reunification,careof orphans,rehabilitationof victims of minesand unexplodedordnance,and postconflictsocial rehabilitation.To help meetthe specialtechnical,management, andethicaltraining needsthese problemsraisefor professionalsin the health,psychiatric,disastermanagement, and other fields, many agenciesand universitieshavedevelopednew short-courseand graduateacademicprograms.18 There have beenmany criticisms of the performanceof theseagencies, along with debatesamongthem over issuesof mandatesand coordination. The debateover whetherhumanitarianagenciesshould continueto succor refugeeswhen significant amountsof the food and other aid are being divertedto combatants(in the caseof Rwanda,to perpetratorsofthe genocide) hasbeenparticularly sharp.Anotherideathat hascapturedmuch attentionis the so-calledrelief-to-developmentcontinuum,the notion that the sharpseparation betweenthe humanitarianwork of relief agenciesand the reconstruction/rehabilitation work of the developmentagencieswas artificial and detrimentalto the recoveryprocess.Becauseresistanceto a call for improved coordination,in a searchfor ways to realize any potentiality of this continuum, would havebeenunseemly,the notion hasspawneda certainamount of exploration and agency interaction.Though some emergencyrelief activities have developmentpotential (e.g., preparingrefugeesto be able to

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resumeeconomicactivity upon repatriation),the continuumconcepthasyet to achievesignificantrealization.19 The long-term consequences of psychosocialimpairmentfor social and economicreconstruction,when significant numbersof the youth and the workforce adults have beentraumatizedin the courseof a conflict, are not well understooddespitetheir apparentimportance.Besidescapital flight, other problemsexist: mistrust of everyoneoutside the immediatefamily, withdrawal from cooperativefunctionslike village labor exchange, mistrust of arm's-lengthcontracts,refusal to put money into banks, a high future discountrate that depressessavingsor investmentbehavior-allthesecan be widespread,impedingboth social and economicrecovery. Even in countries where social conflict has not risen to high-intensity violence, the existenceof lower-level social conflict can impedethe functioning of the economy.One quantitativestudy has found significant negative correlationbetweensocialconflict andthe ability of economiesto recover from externalshockssuchas the oil price hikes ofthe 1970s: matter [LJatentsocialconflictsandthe institutionsof conflict management to the persistenceof economicgrowth, ... their effects are measurable. This is an importantconclusionnot only in retrospect-aswe try to understand what went wrong in so many countriesafter the mid-1970s-but alsoprospectively.An increasingnumberof developingcountriesareintegratingthemselveswith the internationaleconomy.As the Asian financial crisis demonstratesvividly, this will increasetheir exposureto shocks. Therefore,it will be all the more important to develop institutions that mediatesocialconflicts.The resultsof this [studyJ ... indicatethat participatoryanddemocraticinstitutions,the rule oflaw, andsocialinsuranceare all componentsof a strategyto enhanceresilienceto volatility in the external environment.20 The Search for More Effective Prevention During the Cold War, internal conflicts in countrieswith economiesmarginal to world trade and investment,relatively small populations,locations of little strategic importance,and few historic or emotional ties to major powers,could still inducethe major powersto interveneor to usedevelopment assistanceas a lure to becomea client statein a global competition. However, since the end of the Cold War, thesesamepowers have shown much less inclination to intervenewhen vital national interestsno longer appearto be at stake, despite the fact that few if any such interventions would entail credible risk of major-powerconfrontation.For a variety of reasons,the international community has had great difficulty developing

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 11

effective responsesto theseinternal conflicts. The countriescapableof unilateral actionor of joint responseunderU.N. or regionalauspicesmustmake judgmentsin each caseregarding the applicableinternationallaw, all the regional orglobal implicationsof action or inaction,and the implicationsfor their domesticpublic opinion and support. In the case of small countries with little geopolitical weight-suchas Rwanda-theUnited Statesand other Westernpowershave beenreluctant to intervene.Theearlierfailed interventionin Somaliademonstratedthe complexity and risks even for great powerswith vastly greatermilitary capacities. Evenin theYugoslavbreakupandits attendantmassacres, the diplomatic and military pressuressucceededin imposing a peaceonly after threeyears of warfare and "ethnic cleansing."Despite the recurrentprotestationsthat lessonshavebeenlearnedfrom eachdelayedandflawed response,the international community is still far from having a reliable responsecapability. Kosovo and EastTimor were recentexamplesof sluggishfinancial, administrative, and security crisis-responses that, although ultimately successful, wereinadequateto preventheavybloodletting,massivepopulationdisplacement, and extensivedestruction.It remainsto be seenif the current campaign against "international" terrorism has any sustainedeffects on the internationalcommunity'sinterestin, andresponseto, internalwarfarewhere one or both partiesemploy terrorist methods. Although the internationalcommunitymight be seenas haltingly moving in the direction of increasedwillingness to interveneagainstgross human rights violations (often in the form of regime terrorismagainstdomesticopponents),importantcountriessuchasChinaandIndia haveobjectedstrongly to the propositionthat humanrights conventionsmight dominateover the principle of sovereigntyas a justification for intervention.The action by the North Atlantic Treaty Organization(NATO) in the Kosovo crisis without U.N. Security Council sanctionwas a striking exampleof illegal intervention in the eyes of countries wanting to keep their own separatistthreats (e.g.,Tibet in China, Kashmir in India) from becominginternationalizedon similar grounds.This casewas especiallystriking becausethe intervening powersinsistedthat Kosovo was still within (rump) Yugoslavia'sjurisdiction. Without seekingexplicit SecurityCouncil sanction,the NATO powers therebyimplicitly assertedthat the U.N. humanrights conventionstrumped the U.N. Charter'sprovisionsregardinginviolability of nationalsovereignty. In his openingaddressto the 54th sessionof the U.N. GeneralAssembly in September1999,Secretary-General Kofi Annan pointedto the contradiction betweenthe international norms regardingsovereigntyand gross humanitarianviolations. He arguedthat a credible, more aggressiveSecurity Council stancewould serveas a deterrentto governmentleaderswho would

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know thatthey could not expectsovereignimmunity if they committedcrimes againsthumanity. Becausethe permanentmembersof the Security Council are not unanimousin supportingthe idea of humanitarianintervention,the secretary-general called on U.N. membersto define a new paradigmfor interventionthat would enablethe internationalcommunity to respondmore swiftly and effectively to future Rwandas.(Those who advocatebringing grosshumanrights violators to justice also believe that internationaltribunals can act as a deterrentby demonstratingthat sovereignimmunity is no longer a protectionfor criminal behavior.)Annan'scall may be seenas another step in the efforts to establishhumanrights as an overriding international norm. Acceptanceof this norm is not a foregoneconclusion,nor are its operational implications clear. The idea that the world as a whole, throughjoint action underinternationalconventions,should no longer tolerategross violations of humanrights whereverthey occur may seema utopian objective for a speciesmany of whosemembersbehavein much the samefashion as humansdid in earlier Hobbesianages.Many of the incentives,responses, andjustificationsfor violent conflict today closely resemblethe conflict behavior of medievalEurope,to takejust one period and place.Religious antagonismpitted Catholic Western Europe againstthe Islamic world in a continuousstateof war for centuries.CatholicVenice,however,tradedcommoditiesandyoungSlavs(i.e., slaves)with Islamic statesdespitepapalthreats, rationalizing their policy by citing its successas a demonstrableheavenly rewardfor their venerationof the relics of St. Mark's. The culturesof some peopleswere more warlike than others.In the ninth and tenth centuriesthe Danishand NorwegianVikings sustainedtheir living standardsby frequent looting raids on the British Isles and the Carolingianempire; their victims were less warlike,defendingbut not retaliating. Long before the arrival of nation-states,ethnic group hatred could be mobilizedto carry out generalslaughterof noncombatants-what we would now call gross violations of humanrights or terrorism. In 1182, the Byzantine emperortried to loosen the grip of the Italian city-statesover eastern Mediterraneancommerceby allowing Byzantium'spopulaceto massacre the residentforeigners,the Pisans,Genoese,and Venetians.Unemployed young Normansof the lessernobility were readily recruitedfor violent asItaly, England, andthe first Crusadeto saults on other societies-southern the Holy Land. Classconflict also spawnedhorrific violence.Between1323 and1328the peasantsof Flanders,burdenedby heavytaxation,roseup against the nobility and the Church in an effort to bring about a social revolution. Both sidesfought with great cruelty. After the Frenchknighthoodcrushed the peasantryin a climactic battle, they urgedthe king, Philip VI, to put the

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 13

country to the torch and to decimatethe peasantry,man, woman,and child. (He confiscatedthe peasants'assetsinstead.)Economiccompetitionamong the Italian cities was seenas a maximalist,negative-sumstruggle,requiring constantwarfare designedto utterly ruin rivals. That an alternativenonviolent solution was possiblewas demonstratedby the North Sea and Baltic ports that joined togetherto form the HanseaticLeaguein 1230 as a common front againstthe kings of Denmark.21 Theideathat hasbeengatheringstrength,albeit haltingly, in recenttimesthat all nationsshouldparticipatein a systemof rules and internationalinstitutionswith the overridingobjectiveof avoidingviolent conflict, bothbetween and within sovereignstates-isa radical departurefrom previous human worldviews. Up until the late tenth century the only Europeanconceptof unacceptableconflict was a narrow one developedin Franceby the Roman CatholicChurch.Conflict wasjustified only if undertakento protectthe helplessand the Church.Becausethe eliminationof violent political conflict was not feasible,the Churchdevelopedthe notion of the "Peaceof God," specifying brief periodsduring the year when fighting was forbidden on pain of excommunication.The attemptto limit warfare among Christianswas not seenas inconsistentwith the idea of "just" conflicts (the Crusades,for example), a conceptwith a long history amongmany religions. In our time we appearto be moving, at times slowly, toward diminishing toleranceof interstateand internal warfare or of leadersand governments that violate human rights with impunity, and toward a definition of rights that incorporatesgroup as well as individual rights. At the Istanbul summit in November1999,the membersofthe Organizationfor SecurityandCooperation in Europe (OSCE) adopteda new treaty that legitimatespossible interventionin conflicts within states,evenbeforesuchconflictshavereached the point of open warfare. Although the treaty in effect opensthe door to interventionin unstableareasonly in Europe,the principle is a far-reaching extensionof the primacy of grosshumanrights violations over the inviolability of sovereignty.22 Difficult questionsremainthat makethe responseof the internationalcommunity in individual casesuncertainandof varying effectiveness,quite apart from questionsof Realpolitik and of achievinga legitimating consensusfor action. Under internationallaw the principlesof sovereigntyand self-determination often conflict with principles of universal humanrights and with U.N. Charterprovisionsthat permit SecurityCouncil action in internal conflicts deemedto constitutea "threat to peace."The developmentof international legal principles that would legitimate and facilitate more timely and effectiveinternationalresponseshassomedistanceyet to trave1.23 It hasalso beenarguedthat establishmentof a principle of internationalinterventionin

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casesof massivehumanrights violations would be a "dangerouscrusade" becausethe frequencyof suchhorrorscould meana commitmentto virtually endlesswarfare. In this view, regional arrangementsbasedon the willingnessof oneintervenerto takethe leadwould be morefeasibleandlessopenended.24 Therearealsoobviouspracticaldifficulties that would face any systemof formal, institutionalized,preconflict intervention.It is difficult to predict if tensionat a particulartime and place will evolve into violent conflict. It is difficult to predict if scattered,low-level violence will escalateinto general conflict. Severalefforts havebeenmade(which we discussfurther below) to develop"early warning" models,setsof indices that (basedon pastexperiencein manycountries)would presagea descentinto violent conflict. These approachescan be elaborate,evenratherobviousafter the fact, but for variousreasons(including the fact that they arestill "works in progress")appear thus far to have had little practical application. Conflicts betweenmassed ethnic groupswheregovernmentservesas nonpartisanconflict managerare very different from conflicts where one group controls the state and uses state powerpreemptivelyagainstother groups, or where one group dominatesstateinstitutionsand statepower and a violent challengeto the stateis initiated by rival or disaffectedgroup(s),or wherethe challengearisesfrom (or is realizableonly from) external manipulationrather than from indigenouspolitical dynamicsandresources,or whererival groupsareessentially (perhapsreluctantly) clients of warlords engagedin winner-take-allpower struggles.Justas the wide variation amongdeeplydivided societiesproneto conflict hasmadeit difficult to developa truly generaltheory of conflict, so the relevant indices of early warning must and do vary widely from one situationto another. In a recentpaperdiscussingyet anotherform of large-scaleinternal conflict, mass movementsof ordinary citizens againstan incumbentregime, Tony Oberschall(1999) setsout a collective action theory to capturemajor variablesthat appearto determinewhetheror not a masschallengeemerges. Despitethe clarification a collective action perspectivemay provide for an understandingof the necessaryand sufficient conditionsfor masschallenge, Oberschallnotes that different scenariosmay result in any case,and that "prediction of path and outcomeof confrontationsare difficult. The uncertainties in the theory are not deficienciesof the conceptualization,but expressthe uncertaintiesof the real world of challengeand confrontation." According to Oberschall,even in a situation where theory may indicate high potentiality for conflict, "The decisionmakerhas limited information andhasto anticipatethe likelihood of future eventsdeterminedby the choices of thousandsof ordinary citizens and by the authorities'countermeasures.

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 15

The authorities themselvesmake guessesabout how the challengerswill respondto social control and to conciliation, and may be uncertain about how their agents,the police andarmy, will conformto their commands.Thus to chart a protractedconflict and predict its outcomeis a demandingtask [eventhough] collective action theory has provided a start." Oberschallalso emphasizesthe speedwith which unanticipatedevents might unfold. "What looks like a stableequilibrium can unravel rapidly, and it astonishesboth the regime and the security forces and the academicsand national securityadvisers."The conflict following the August 30, 1999, referendumin EastTimor presentsa striking exampleof poor predictivepowers.Although EastTimor hadbeensimmeringwith violencefor yearsbecause of its population'srefusal to acceptIndonesia'simposedsovereignty,an assessmentof world conflict potentialities,issuedthat samemonthby the V.S. National IntelligenceCouncil (1999), madeno mention of East Timor and ratedthe situationin Indonesiagenerallyas likely to improve.According to basedon "the coordinatedviews the authorof the report,the assessment was of analystsand expertsfrom agenciesacrossthe FederalGovernment."25 In a final gloomy observation,Oberschallreminds us that even where, as in Rwanda,Bosnia, and elsewhere,the world did have fairly clear indicators and warningsof impendingmassacre,advanceknowledgewas of no avail in the absenceof internationalpolitical will. There is probably no better witnessto the advanceknowledgeavailablein Rwandathan Lt.-GeneralRomeoA. Dallaire, commanderat the time of V.N. forceson the ground.On the problemof internationalwill andthe immorality of preventiveinaction, he has written that the experiencein Rwanda was seenas too difficult and not of sufficient interestand value to prevent the outbreakof violence,and onceviolencehadbrokenout, it wasstill not of sufficient interestto warrantthe expenseof resourcesand risk of more casualtiesto stop the violence from spreading.... Like the crisis at the of not looktime, the needfor a responsemechanismandthe consequences ing for solutions are guaranteeingthe recurrenceof other humanitarian catastrophes now and into the future.... I remainmystified that humanlife, the securityof noncombatants, and the preventionof such horrors as the genocidein Rwandaare, sadly, not sufficient to act as a catalystfor a swift and determinedresponsefrom the internationalcommunity.... It would be immoral if not outright criminal to allow anothertragedyto occurby failing in our collectiveresponsibility to humanity at large.... The killings could have beenpreventedif there hadbeenthe internationalwill to acceptthe costsof doing so.The looming threatof overwhelminginternationalretribution is still requiredto keepin checksomeof the impulsesof hate-fiIIed elements.26

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Even if lack of political will, or the great variancefrom one conflict to anotherin the geopoliticalimportanceofthe countriesinvolved, did not pose suchdifficult obstaclesto timely andeffectiveinternationalintervention,the developmentof effectiveinterventionsbecomesincreasinglyproblematicas the stakes,tensions,and violenceescalatetoward a generalresortto internal resolutionby force. Beyondsomepoint of breakdownin mutual trust, some point of accumulatedviolent acts and extremistrhetoric, room for compromise and third-party mediationmay diminish to zero. Ironically, the longer one goesback in time when the partiesstill haveflexibility, beforepolitical rhetoric has deteriorated,and while there is still (perhapsample) room for policy adjustmentand trade-off, the less alarming are the "early warning" indicators, thefewer are the apparentreasonsor justifications for international developmentagenciesto concernthemselvesover conflict (exacerbation or amelioration) implications of their programs.In short, during the preconflict years whentheremay still be ample scopefor conflict-avoiding initiatives, internationalconsciousness and attentionregardingsuchpotentialities are normally dormant.Thereis a parallel incongruencebetweeninternationalintentandeffectiveness:the moreviolent, the morevicious an internal conflict becomes,international intent to intervenestrengthens(not in the caseof Rwanda!)while the scopefor effective (nonmilitary) preventionor resolutiondiminishes. This weaknessof eleventh-hourmeasureshasdoggedthe attemptsduring the 1990s to use economic sanctionsas a punitive instrumentfor forcing governmentsto ceasepolicies deemedto be violating internationalnorms, suchas externalaggressionor supportof terrorism. Severalof the sanctions casesthat were aimed at governmentsfomenting internal conflict through serioushuman-rightsabusesor aggressionagainstvictimizedethnicitieswere backedby U.N. mandates:Burma,Rwanda,ex-Yugoslavia,andSierraLeone. More economicsanctionswere initiated by individual countries(primarily the United States,WesternEurope,and the USSRlRussia)than by U.N. action. Although the main sanctioninstrumentshavebeenrestrictionson international trade, travel, and investment,they have also included aid cutoffs (exceptfor refugeeand other humanitarianassistance).The U.N.-mandated economicsanctionsgenerally entail suspensionsof World Bank and other multilateral developmentbank activity. Becausesanctionshave been employed only to force suspensionof ongoing conflict or abuse,not as a preventiontool, they are,in our perspective, too late. Their applicationhasbeen a clearsign that preventivediplomacyor earlierpreventionmeasures,if any, havefailed. Although the report of the CarnegieCommissionon Preventing Deadly Conflict27 supportsa continuing role for economicsanctions,especially if their designis improved,the literatureevaluatingthe effectsof sanc-

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 17

tions has been very critical. Most analyseshave shown that sanctionsare ineffective and have undesirableunintendedconsequences. While seldom unhorsingtheir targetregimesor achievingthe intendedchangein policies, they often causehardshipfor target country populations.28 In short, as an instrumentfor conflict preventionor resolution, economic sanctionshave beenneitherquick nor effective. We will reconsidersanctionsbelow, in the contextof early preventionefforts. During the yearswhen internal socioeconomicand political conflicts are still relatively nonviolent, still too ordinary as a universal featureof human or resolutionof suchconflicts society,thereis a presumptionthat management is the responsibility of the local political and juridical institutions and processes.It is only when the local processesare failing and conflict turns violent that internationalconflict-resolutionefforts assumelegitimacy and get started.In fact, with the explosionof internal conflict in the decolonized countries,conflict resolutionhas emergedas a new specialization-indeed, a subject for academicresearch,international mediation organizations, professionalassociations,and professionaltraining at the postgraduatelevel in a numberof universities.Kevin Avruch writes, "By the late 1980ssome practitionerswould advertisethemselveswith 'Have Process,Will Travel.' Conflict resolutionhad becomea commodity. By the early 1990s,after the collapseof the Soviet Union and the openingof EasternEurope,it also becamean exportablecommodity.,,29 Conflict scholarshiphasrangedover the whole gamutof conflict sources and triggers, from the perceptual,psychological,and symbolic, to the hard issuesof material and security interests.Conflict resolution theoristshave tendedto fall into two camps,reflecting the oppositeends of this gamut. Their contrastingconceptsand approacheshave requiredthe use of terminology that differentiatesbetweendifferent degreesof "resolution."Avruch describesthe two concepts: The first onereflectscolloquial usage;it is inclusive,encompassing virtually any strategyor techniquethat bringsa disputeto an end,or evenstops the violence.The second,what we havecalledthe restrictedsenseof conflict resolution, is specializedand exclusive.Rooted in ... Lederach's notion of "conflict transformation,"the restricted conception seeksto get at the underlyingroot causesof the conflict, to solvethe problemsthat led to it in the first place.Following the logic of this senseof conflict resolution usuallymeanscontemplatingprofound,evenradicalstructuralchanges to the sociopoliticalsystemthat gaverise to the conflict in the first place. The restrictedconflict resolutionistsare unwilling to grant the broad or inclusiveview of conflict terminationthe name"resolution."[Resolution] is regulation,settlement,or mitigation. It consistsof bargainingandcom-

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promise,of interest-based negotiation,of mediation,goodoffices,facilitation or-very close to the edgesof talk at all-"coercive diplomacy." It may well resultin signedagreements, cease-fIres,demilitarizedzones,truces andarmisticelines;it may evenstopthe violenceandkillingfor now. But unlessit getsto the causesof the conflict, to repressiveinstitutionsor the unequaldistributionof social goodsandresources,for instance,the agreementwill be broken... and the violenceandkilling will assuredlystartup onceagain.3o The term "preventivediplomacy" hasbeencoinedto define a spectrumof internationalactivities that acknowledgesthe needto addressradical structural changesbut that in practicehas focusedon bargaining,interest-based negotiation,and good offices, the tools of the diplomatic trade. Our interest is in preventionrather than resolution-thatis, in managingor mitigating conflicts beforethey reachthe stageof urgentneedfor diplomatic intervention or, worse, high-intensity violence that triggers interventionsby force. Nevertheless,prevention(in a postconflict situation, preventionof conflict resumption)is the key to the differencebetweenthe two conceptsof resolution. Avruch's "restricted"or more fundamentalconceptof resolutionis obviously preferable.By definition, it goes beyond immediatecease-fires, interim or transitional arrangements,and accommodationsthat may be superfIcial andface-saving,evenaccepted(asin the caseof Bosnia,for example) only underduress,to the presumedheartof the matterbetweenthe protagonists. Unfortunately (as Bosnia also demonstrates),securingresolution of fundamentaldifferencesafterthe protagonistshavebeenat eachother'sthroats is very difficult. The notion that resolution practitionersshould strive for fundamentaltransformationhas apparentlyrun up againstthis hard reality. The hopeful viewpoint is that, given enoughtime, perhapseven a more demanding... restrictedsenseof conflict will prevail, onebasedon conflict transformation,aimedtowarda profoundrestructuringof societyand polity. But other evidencedoes not point to this at all. In the mid-1980s therewas much talk about(restricted)conflict resolutionas a "new paradigm" for theory and practice.By the mid-1990s,however, it appeared that the new paradigmwas not so much still untried, awaiting birth (the hopeful view), as alreadydeclaredtoo radical, utopian,or unworkableand disposedof in the counterrevolutionof pragmatismand "realism:>3l In those caseswhere internal conflict has been terminatedby international military intervention,the third partiesmay be in position to designa settlementthat includesthe immediateinstallation of what appearto be elementsof both conceptsof resolution,that is, the immediatemilitary stand-

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 19

down (sustainedby internationalpeace-monitoringor peacekeeping) andthe creationof a new political structuredesignedto containif not transformthe political and power relations among the antagonists.The record is not yet encouraging.For example,the Dayton PeaceAccords of 1995 successfully terminatedthe conflict in Bosniawhile purportingto gain acceptanceby the threeparties-theBosniaMuslims, Croats,and Serbs-ofa completelynew set of political relationshipsand institutions. The presenceof U.N. forces has kept the peacethus far. However, betweenthe deep mistrust, the continuing leadershipof the samepartiesthat fought the war, the determination of the dominant Bosnian Croat and Serb partiesto underminethe Dayton Accordsby refusingto implementmany of its critical features(abetteduntil recently by undermining policies of the neighboringstatesof Croatia and Serbia[ex-Yugoslavia]),the political structuringhas beendeeply flawed in conceptionandimplementationandmay requirea completeoverhaulto avoid a recurrenceof conflict.32 The Many Forms of Internal Conflict This study is not concernedwith violence that is interpersonalor criminal. Both these forms of violence are ever presentin all societies,rising and falling in frequencyfrom time to time, and occurring at differing levels of intensity in different societies.High levels of violent criminal behaviorare often found in countriesthat are also burdenedwith extensivepublic-sector corruption andweak or compromisedjudiciary systems.Becauseextensive criminality and weak rule of law are known to damagethe growth process by underminingpersonalsecurityand propertyrights, developmentscholars and agencieshavebeengiving theseproblemsincreasingattention.Without intending to diminish the importanceof theseaid-assistedefforts to reduce lawlessness,we focus insteadon the problemsof preventingviolent conflict betweenpopulation subgroups,conflict that commonly erupts on (or rises to) a scalethat threatenssocial and political stability and economicactivity on a nationallevel, conflict that typically involvesorganizedarmed(military or paramilitary) forces that represent(or claim to represent)defined constituencies. Violent internal conflict takesmany forms, someof which are unlikely to be preventableby any outsideinterventions,eitherdiplomatic at the time the violenceactuallybreaksout, or by internationaldevelopmentagenciesthrough societal changesinduced by economic development,except perhapsin a very long run. (Examplesmight be warlord rivalries, as in SierraLeone, or the hegemonycivil wars of the hermetic Burmeseregime.)Large-scaleinternal conflict commonly is dubbeda "civil war." Analysts typically use a

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violence thresholdto distinguishcivil war from low-level violence or civil insecurity:a country movesinto the civil war column when its annualcount of fatalities passesthe 1,000mark. Also most commonly,the struggleis between the state(government)and the populationgroup(s)aligned with the state onthe one side, and groupschallengingthe stateon the other. In some casesthe challengingside aims to take over the government.In othercases, it wants to secedefrom the state.In yet others,severeviolence breaksout betweentwo populationgroups,with the stateattemptingto maintainorder, not siding with eithergroup.A civil war may ragelocalizedfor yearswithout destabilizingthe stateor the bulk of the economy,or it may causethe stateto collapseandthe institutional frameworkof the economyto disintegrate.The roots of theseconflicts, which we examinebelow, have comprisedvarying mixes of fears,hegemonicambitions,and grievancesover economic,political, and cultural differencesand rivalries. In the worst intrastatecasesof massviolent deaththis pastcentury (apartfrom faminescausedby government policies), the statehasinitiated slaughterof noncombatantpopulation groupsdeemedto be ethnic or classenemies, and/ortools of a threatening foreign power. Somerecentresearch(especiallythe quantitative)into the causesof civil wars hasexcluded,by definition, conflicts whereone side is not responding with organizedfighting. The violent aggressorside (or the state)attacksanotherpopulationgroupthat, unableto mountan armeddefense,mustflee to seekrefugeehavenelsewhere.These are pogromsor "ethnic cleansing"campaigns rather than "warfare." Also excludedby definition are the conflicts whereviolent aggressionis chronic but the level of fatalities falls below the 1,000-per-yearthreshold.Underthesedistinctions,civil wars in developing countriesare a subsetof the wider generalproblemof internal violence.As someof the problemsunderlyingthe casesthat fall outsidethe conventional definition of civil war are similar to the root causesof the conflicts excluded by thesedefinitions, we will not limit ourselveshereto "civil war" cases. Internal conflicts havevariedby scale,by the extentof geographiccoverage,by the extentof noncombatantcasualties,and by the extentof resortto cultural destructionand sometimeshorrific tacticsto terrorizethe opposing, or victim, populationgroup(s).In tum, theseand other characteristicsof a conflict will affect how the struggle,after settlement,will enterinto the historic memoriesof eachside, shapingboth the near-termchancesfor avoiding resumptionandthe natureof their long-termrelationship.Someconflicts may be small running soresin termsof the numbersof combatantschallenging the stateand/orthe proportion of the disaffectedpopulationgroup that actually favors an extra-legalchallengeto the stateor supportsan insurgent force. Some conflicts may remain well below the civil war thresholdfor

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 21

long.periods becausethe insurgentsare unable to acquire enoughfinance andweaponryto challengethe securityforcesof the state.Evenbelow-threshold, running-sore conflictshave proven extremely damagingto economic developmentand the generalwelfare.Obviously,our sketchof conflict characteristicsis not intendedasa full treatmentof the factorsdeterminingwhether or not a conflict escalatesinto a major challenge,a civil war, or a major economic drain on the state. It should serve, however, to underscorethe point that the conflicts within developingcountriesin recentdecadeshave beenfar from uniform in their etiology or their characteristics.

InternationalTerrorism At this writing it is only weeks since the suicide attacksof September11, 2001, on the World Tradetowers and the Pentagon,and the respondingwar in Afghanistanagainstthe Al Qaedaorganizationandits Talibanhost.At the U.N. GeneralAssemblysessionin mid-November,virtually every nation in the world condemnedinternationalterrorismand concurredin the necessity of protectingthe world againstthis threat. This conflict is obviously very different from the conflicts this book is concernedwith. It is internationalratherthan internal.According to the announced,and presumed,aims of the Al Qaedaand Taliban leadership,their fundamentalistobjectivesaresoextremeas to be apocalypticandcompletely infeasible. Under the broadestinterpretation,they seekto change,indeed roll back, the courseof history, which they seeas a long strugglebetween Islam and Christianity. To accomplishthis goal, they createda worldwide network to intervenein internal conflicts (such as in the Philippines)where one side was (perhapsamong other characteristics)Muslim. In countries alreadylargely Muslim they opposedthe intrusionsof modernity into their vision of the theocraticworld demandedby Islam, allying with local fundamentalistgroups to help overthrow regimesseenas corrupt and as having departedfrom true Islamic orthodoxy. A narrowergoal is to roll back, by terror and massuprising, the power, influence, and presenceof the United States,especiallyin regionsandcountrieslargely Muslim. Thefact thatOsama bin Ladencamefrom SaudiArabia, asdid most of the suicidehijackerswho carriedout the September11 attacks,gave credenceto the view that a core Al Qaedaobjective was the overthrowof the Saudi royal family. Thoughsomeof the partiesin the internal antagonismswe are concerned with haveemployedterroristtacticsafter the unresolvedenmitieshadreached the stageof violent confrontation,few haveextendedsuch tactics tooutside countries.In contrast,Al Qaedaand someof the (Egyptian,Palestinianand other)fundamentalistorganizationswith which it is allied (possiblyalsolinked

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to one or more regimesmaking opportunisticuse of thesemovements)are "international"in the sensethat they embracecells operatingin, or out of, many countries.The goalsof most of the antagonistsdiscussedin this book include concreteeconomicand political changesthat are in principle negotiable, or resolvablein somecasesby secession.Long before the resort to violence,such goals can be affectedby the processesof changeinherentin economicdevelopment,and often by the internationalagencieshelping to financeand assistsuchdevelopment.Religion is often a factor in theseconflicts, but seldomthe essentialroot cause.The relativematerialdisadvantage of someantagonistsis frequentlya critical motivationwhenaggrievedgroups seeno otherrecourseshort of violence. In contrast,the fundamentalistprogramcan becomeentirely consumed with powerand cultural-religiouscleansing,and be disinterestedin poverty. Much of the sympathyAl Qaedaand the Taliban have evoked amongcoreligionists in the Middle East and elsewherehas beenreportedas arising from deep wellsprings of resentmentover the material and technological gulf betweenthe West and much of the Muslim world. Somescholarshave citedfrustrationandhumiliation overthe long stagnationof the Islamic heartland and the failure, thus far, of Islamic intellectualand religious leadership to reinterpretIslam, andits role in relation to the state,in the light of modem realities. If the utopian designsof the extremeIslamic fundamentalistscurrently on the stageare representedfairly by the policiespromulgatedin Afghanistan,a country where they have had the opportunity for relatively unhamperedgovernance,it is clear that the fundamentalistsview as anathema some of the basic requirementsfor modem development.They deny educationor employmentfor the femalehalf of their labor force. They deny educationof youth that preparesthem with secularskills and habits of critical thinking. They opposean open economy that draws in technological learning (beyondthe arts of terrorist destruction),that has close trade relations with outside economies,and that seeksforeign investmentto build domesticproductivecapacities.They are againstthe ideaof governmentthat is responsibleto a constituencyand open to changeand evolution; and they opposethe conceptof a pluralistic civil societycomprisingindependentinstitutions andinterest-groupandcitizenry organizations.In sucha worldview the internationaldevelopmentagenciesmust be seenas part of the problem,not the solution, as instrumentsfor advancingthe very valuesand societalcharacteristicsto which the fundamentalistsare deadly opposed. This incompatibility betweenthe extremefringe of Islamic fundamentalism and the worldview of the international development"community" is illustrated by a responseto the eventsof September11 from a group of senior World Bank officials.

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 23

Poverty in the midst of plenty is the challengeof our times. It was true beforeSeptember11. It is evenmoreso today.Whenthe promisedbenefits of globalization remain elusive for many of the poorestcitizens of our planet, when hope falters and young people cannot imagine the future, whenthe gapis too wide betweenwordsand action,the voicesof extremism find a responsiveecho.33 They assertthat while growth remainsessential,the "quality" of that growth matters,and that "quality growth" is "an effective way to preventconflicts." Their definition of quality includesnotionsthat are basicto the international developmentparadigmbut diametrically opposedto the fundamentalist agenda:responsiveness ("listening to manyvoices"in thedevelopmentprocess), local empowerment,working with nongovernmentalcivil society,utilizing researchand technology,expandingtrade relations,and drawing benefitsfrom the globalizationof science,communications,and information. Although the internationalterrorismconflict differs from the conflicts that are the subjectof this book, the eventsof September11, 2001, havedemonstratedthat internationalterrorismhasmajor capacitiesto affect the fortunes of developingcountries,their exposureto internal conflict, the significance of underdevelopment for the more advancedand wealthy countries,and the needfor the wealthy countriesto reconsiderthe policy framework within which they addressunderdevelopment.First, the fact that the feasibility of threats of such a scale (both what has been perpetratedand what further seemsfeasible) has now been demonstratedcalls into question the traditional basesfor judging the relative geopolitical importanceof individual states.Afghanistanis remotefrom Europeandthe WesternHemisphere;it is a country of little economicimportance,extremelypoor, with no industrial capacity.After the withdrawal, and then collapse,of the Soviet Union, Afghanistanwas seenas having only local region importance, certainlynot as a country that could be the sourceof an effective attack on Westernvital interests.Afghanistanhas demonstratedto the wealthy nations that turbulence and deepgrievancesin developingcountriescan no longer be left to benignneglectunderthe mistakenassumptionthat suchturbulencecanhave no unpleasantinternationalconsequences. Second,the short-termshock effects on the world economyare very damagingto developingnations.Many of them will suffer incomedeclines and increasedunemploymentdue to the depressingeffects of theseevents (reinforcing the already widespreadsluggishnessand recessionof the industrializedeconomies)on tourism, foreign investment,and export earnings. For many developingcountriesthe overall effectson national income will be very substantial.This can only deepeninternal competitionandraise

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the levels of tension betweenantagonisticgroups in deeply divided societies. Third, while the initial U.S. commitmentof substantialeconomicaid to Pakistan($600million) is drawing on a supplementaryattack-response budget of $40 billion providedby the Congressshortly after the September11 events,a generaldonorfocus on the regionsand countriesat immediaterisk to directdestabilizingcouldhavethe perverseresultof divertingaid resources away from other poor countriesat risk of internal instabilities.It would also be unfortunateif aid agencieslowered their standardsfor project designor governmentreform commitmentbecauseof political pressuresfor rapid disbursementor for providing financial supportto regimesnot committedto improving the welfare of their populations. Fourth, and perhapsmost seriouslyfor the long term, the fundamentalist extreme,if not counteredby the Islamic mainstreamand the positive sociocultural effects of economicgrowth and modernization,could radicalize Muslim groupsandthe generalMuslim worldview in the swathof countries (acrossAfrica, CentralAsia, and SoutheastAsia) with mixed Muslim and non-Muslim populations.Antagonismsin which religion hasbeenonly one factor could be deepenedthrougha rising salienceof religious identity as an overriding and exclusivistissue. All theseeffects and potentialitieshave addedurgencyto the needfor a reexaminationof the role and scaleof foreign aid. In fact, within weeks,if not days, after September11, there was alreadymuch scurrying aroundin developmentcirclesto initiate suchreexamination.Taskforceswere formed (in the World Bank and USAID, at least) to identify the implications for theseagenciesand to searchfor greatercoordination. In my view, it is impossible to escapethe conclusionthat the United Statesandotherdonorcountries-fortheir own self-interest,andto befaithful to their own humanitarianvalues-mustrevisetheir foreign economicpolicies in ways that greatly enhancethe pace and opportunitiesfor poverty reduction and economicgrowth of the developingnations.The advent of the Cold War in the late 1940sprovidedthe first grandimpetusfor foreign aid andfor the promotionof tradeandinvestmentasinstrumentsfor driving the economicadvanceof the developingcountries.The adventof international terrorism, with the finance, powerful methodsand weapons,and suicidal determinationto exploit the very open society the terroristsdespise should provide a secondgrand impetus. However, as vital as a generalized,reinvigoratedattack on poverty will be, the development agencieswill also needto addresswith greatersubtlety and sharperfocus than has beenthe casein the pastthe core problemsof group imbalancesand antagonisms.

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 25

The Scopefor Early Prevention The searchfor ways to avoid impendingconflicts is hardly a new function of diplomacy.Nevertheless,both the moderndevelopmentof internationaland multinational institutions for disputemanagementand the end of the era of Cold War proxy conflicts have led a school of practitionersand scholarsto carve out "preventivediplomacy" as a new categoryof study and practice. While someusethis term to embraceeverythingfrom root-causeamelioration (poverty,environment,etc.) to crisis managementmethods(diplomatic, people-to-people,mediation,etc.), to postconflictreconstruction,the concept is more useful when usedto focus on diplomatic processesand on the period when "violenceis imminentor early but still short of massdeadlyconflict," as BruceJentlesonsuggestsin his recentreview of experienceand the stateof the art.34 By this definition, the startof preventivediplomacyin any situationspells the end of the period when root-causepreventionmight havebeenattempted, andconfirmsroot-causefailure. Suchfailure is evenmore completewhen preventivediplomacycomesto naughtand the only remainingpreconflictinternational option is preemptivemilitary intervention.Jentlesoncalls this last option "coerciveprevention"in a secondrecentpaperthat focuseson the situationsof irreconcilableantagonistshurtling toward violent conflict. Jentlesonchallengesthe prevailing argumentsagainst preemptivemilitary actions. First, he describeshow international conventionsand norms havebeenmoving in the direction of defining sovereignlegitimacy as based on stateresponsibilitiesin addition tothe classicalstateright of nonintervention, a movementthat still hasfar to go. He notesthat, "The scopeof a state's right to sovereignauthority is not unconditionalor normatively superiorto the right to securityof the polity. Until and unlessthis conceptionof responsibility gainsinternationallegitimacy, internationalconflict preventionstrategieswill continuemore often than not to be too little, too late."35 Second, Jentlesonarguesthat the commonexplanation(mainly in the United States) for inaction or for intervention-whetheror not a "CNN effect" hasaroused public opinion-overstatespublic reluctanceand understatesthe opinionmolding power of presidentialleadershipin international affairs. He also objectsto the superficiality of the commonassertionthat in the post-Cold War world few of the recentintrastateconflicts havethreatenedU.S. "vital interests.""Although it may be true that many of theseissuesand places have limited intrinsic importance,the more the conflicts intensify the more importantthe issuesand placesoften become.Initial assessments ... often fail to accountfor the dynamicsof spreadand escalationby which the risks to the interestsof outsidepartiesbecomegreater.... [T]he damageto major powerand otherinternationalinterestsoften provesgreaterthan anticipated

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becausethe assessment of the conflict's limited importanceresults ininaction or inadequateaction.,,36He also notes thateven where interestsare of only limited importance,interventionmay be a rational policy if a proportionately limited force commitmentis sufficient to be effective. Third, Jentlesonmakesthe case(concurredin by numbersof country experts)that early use of sufficient internationalforce, and/or credible threatsto apply of course,with appropriatediplomatic,economic, suchforce (supplemented, and other actions),would likely have preventedthe bloodbathsin Bosnia, Kosovo, EastTimor, and Rwanda. Unfortunately,even if all the difficulties that face mobilizing the necessary political will and practical implementationarrangementscan be overcome,leadingto the sanctioningand establishmentof standinginternational coercioncapacity,preventivecoercion will remain an eleventh-hour response.The coercive introduction of internationalforces is likely to be feasible only if conflict is incontestablyimminent. Early in this context is very late indeed. Although preventionat the momentof extremecrisis is not the focus of this study, Jentlesonmakesa numberof points worth noting in our "early early" context. First, for outside powersthe risks of preventiveefforts are much less than the risks createdby conflict: "When there is no prevention, the real estatein questionrisks getting bigger.Whetherbecausethe conflict then takesin areasthat are more strategicor simply becausea larger areais in conflict [through contagioneffects], outsidepowerscan find their interestsmuch moreat risk." Second,a "wait-and-see"attituderisks a narrowing of optionsas a conflict deepensand as resolutionbecomesincreasinglydifficult. Again, efforts to prevent conflict should ideally start while options remain open, before the party(ies) resort to violence. Third, the financial cost of preventivemilitary action is likely to be much less than the cost of midconflict interventionto bring a civil war to a halt and the humanitarian aid cost of the refugeeflows that theseconflicts usually entail. The casefor preventive"intervention" by the internationaldevelopment agencies-where their actionsmay be relevantand salient-isstrongerthan the casefor coerciveprevention,for obviousreasons.First, the development agenciesare on the ground, usually yearsbeforeconflicts haveturned violent, long before any needfor the instrumentsor agenciesof international diplomatic or military intervention.Their presenceis usually welcomedas the dispensersof internationaltransfersand facilitators of economicand social progress.The internationaldevelopmentsystemis well establishedand is operatingin virtually eve!}' developingcountry. It needsno ad hoc invention undercrisis conditions. Second,a conflict-preventionrole for the developmentagenciesshould

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 27

be very much less costly than eleventh-hourcoerciveprevention.Effective preventionthroughthe addressingof root causesin countriesat conflict-risk may requirea greaterresourceinput than the developmentsystemas a whole is now providing. However,the extracost of a (successful)preventivestrategy is virtually certainto be lessthan the hugecostsof coerciveintervention and/orpostconflict reconstruction. Third, in difficult cases,developmentagenciesmay have to use strong persuasionor exert heavy "conditionality" pressures.Howeveroverbearing such actions might be, they would not have the characterof coercion by force; they would be largely integral to the developmentassistanceactivities the agenciesare already conductingas a normal course,and they may be justifiablein world opinion asessentiallyhumanitarianin natureandpurpose. Fourth, for many yearsthe mandatesof the developmentagencieshave been moving away from their earlier focus on bricks-and-mortarinvestment and dominanceof economiccriteria for project choiceand designand toward creating institutional frameworks and promoting developmentenhancinggovernance.Many of the bilateral developmentagencieshave beenproviding financial and technicalassistancedesignedto strengthennot only democraticprocessesbut also formal judicial systemsand civil society conflict-resolutionorganizations.Thus, deliberateincorporationof conflict preventionas an objective-preferablythe principal objective in countries at risk-is likely to involve new initiatives, and changesto ongoing programs, thatare incremental,technical, and unnewsworthy,comparedwith the drastic natureof coerciveprevention. Fifth, mobilizing "political will" for developmentassistancethat is oriented for conflict preventionshould be easierthan the task of mobilizing such will for military interventions. In the United Statesin particular,a coherentpreventionstrategy,one built upondevelopmentassistancethat addresses economicand socialroot causes of post-ColdWar conflict, might conceivablycreatea public understanding and supportbasethat would be wider than the collection of relatively narrowly defined groups(such as thoseinterestedin child health, HIV/AIDS, the environment,and NGO financing) that for sometime has provided the only active support for foreign aid. The previous USAID administrator,J. Brian Atwood, madesucha bid for the role of foreign aid in an op-edarticle in 1994. He assertedthat the Clinton administrationhad "made crisis preventiona centralthemeof its foreign policy." Noting Secretary-General Kofi Annan'scall for preventivediplomacy,Atwood wrote: Our commonobjectiveis clear: to help societiesbuild the capacityto deal with the social, economicand political forces that threatento tear them

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apart.... Someof the componentsare clear. We cannotpreventfailed stateswith a top-downapproach.No amountof internationalresourcesor organizationalcapacitycanserveasa substitutefor building stable,pluralist societies.... Technologyshould bebetterexploitedand sharedto empowerindividualsandenhancethe networkingof nongovernmental groups, increasefood supplies,slow populationgrowth and preservenatural resources.Sustainabledevelopmentthat createschainsof enterprises,respectsthe environmentandenlargesthe rangeof freedomandopportunity over generationsshouldbe pursuedasthe principle [sic] antidoteto social disarray.37 The current administratorof USAID, Andrew Natsios,recently incorporatedconflict preventionas one of the threemain objectivesof U.S. foreign aid, the othertwo being health,and economicdevelopmentand agriculture. PresentatingUSAID's 2002 budget proposal to the Congress,Natsios assertedthat USAID "must improve its ability to promote conflict prevention." To accomplishthis, USAID "will undertakea major new conflict prevention,management,and resolutioninitiative." While this policy stance setsthe stagefor new approachesto prevention,the core conceptappearsto be a continuationof the agency'songoingrelianceon the spreadof democracy (an approachwe examinebelow). This initiative will integratetheexistingportfolio of USAID programswith new approachesto crisis and conflict analysis,and new methodologiesto assistconflicting partiesto resolvetheir issuespeacefully.Our experience hasproventhat by promotingand assistingthe growth of democracy-by giving peoplethe opportunityto peacefullyinfluencetheir governmentthe United Statesadvancesthe emergenceand establishmentof societies that will becomebetter trade partnersand more stablegovernments.By facilitating citizens' participationand trust in their government,our democracy efforts can help stop the violent internal conflicts that lead to destabilizingand costly refugeeflows, anarchyand failed states,and the 38 spreadof disease. Major obstacleswill haveto be overcome,however,to tum U.S. foreign aid into an effective instrumentfor conflict prevention.As explored in a recentconferencesponsoredby USAID and the Woodrow Wilson International Center, these obstaclesinclude (1) the need to redefine what comprisesnational security in the post-ColdWar world, to embracea spectrum of political, economic,andsocialissuesthat is broaderthanthe narrow,threatcentered,paradigmof the Cold War decades;(2) traditional problemsof poor coordinationamongdifferent arms of the U.S. governmentresponsiblefor

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 29

varying aspectsof foreign policy and international programs;and (3) the needfor overhaulof the foreign aid legislation.The USAID's currentlegislative mandateand funding structureare a particularly severeconstrainton the agency'sability to addressconflict prevention.The agency'soperating and performanceevaluationsystemsare also too mechanicaland quantitative for a conflict-preventionobjective: the ultimate "measurement"of program outcomewould be events(i.e., conflicts) that do not take place. The basicforeign aid act is very muchin a child survival andhumanitarian modeat present.Can this shift in Congressand with the Americanpublic to a structuralpreventionfocus?If so, at what loss and gain of votes and support?Much of the USAID processis now gearedto "Results" packages;canUSAID andCongressshift to measuringaid successwith institution-building indicators,insteadof more understandable birth, death,disease,health,election,etc., indicators? It will be a difficult policy changefrom poverty reductionto [conflictmanagement]capacitydevelopmentfor Congress,the media, the public andespeciallythe multitudeof specialinterestgroupsthat haveinfluenced budgetearmarkingand directives.This useof directivesand earmarking hasbeencarriedout to theextreme,resultingin very little [programexpenditure] flexibility .... [T]here is sucha history now of thesespecialinterest groups and Congressdirecting from America where developmentassistanceshouldgo that the presentbudgetstructureleaveslittle flexibility to 39 respondto local requirements. The limited room for matchingresourcesto the high priority that Natsios hasassignedto conflict preventionis evidentin the USAID budgetfor 2002. The postureof the Bush administrationand the Congressregardingforeign aid and developing-countrycrisis prevention-will they reorientthe legislation to sweepaway the legislative constraintson USAID's flexibility? or incorporateconflict preventionin the legislation in a mannerthat translates into funding levelscommensurate with prevention'simportance?-isnot clear at this writing. Can the NGOs and other groups that supportforeign aid's humanitarianpurposes(and whosefield programsdependon USAID's budget) be broughtaroundto supportconflict preventionas a humanitarianobjective that may override their particular activities? Can foreign aid's humanitariansupportersaccepta morecomprehensivepreventionparadigm, a wider conceptof humanitarianpreventionthat goes to the prior roots of disorderratherthan absorbingsuchlargeaid resourcesin conflict alleviation and repair?A positive answerto such questionswould greatly enhancethe ability of Americandevelopmentassistanceto adoptthe orientationandprogram specificswe will illustrate and proposebelow.

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Returningto Brucelentleson,his conclusionto his casefor the realismof coercivepreventionis even more apt when appliedto the potential preventive role of developmentassistance: [W]e currently suffer from being too often caughtin the middle. We seek to do as little as we can, or at leastavoid squarelyfacing up to the issues until they pressthemselvesupon us so intenselyas to be undeniable.We thenendup with commitmentsthat last muchlonger,costmuchmore,and accomplishmuchlessthanpromised.No wonderthat not just isolationists but seriousstrategicthinkers counseldoing less. Yet as arguedfrom the outset,the interestsat stakeandthe costsof inactionaretoo greatfor those argumentsto standup to analysis.Conflict preventionstrategiesof doing more and soonertruly are the best option-or the least bad in the Churchillian sense.... Evenif just oneor two ofthe next waveof Bosnias,Rwandas,Kosovos, and EastTimors can be prevented,that would be a major contributionto making the seconddecadeof the post-ColdWar era more peacefuland principled than the first. And perhapswe can do betterthan that.40 I believethe developmentagenciescan do evenbetter.Their activitiesare often relevant,sometimessalient,to the underlyingtensions,disparities,and policiesthat ameliorateor exacerbateinternaldivisions.Examinationof these relevanciesandhow the agencies'contributionsto conflict ameliorationmight be strengthenedis the subjectof this book. Chapter2 cites examplesand casestudiesto illustrate dynamicsof conflict avoidanceand failure, and to give examplesof how the internationaldevelopmentagencieshave either exacerbatedinternal conflicts, amelioratedthem, or missedopportunitiesto fosterprevention.Chapter3 exploresthe causesof violent conflicts in developing countries.PartII reviewsconflict-preventionactivities and optionsof theseagenciesin somedetail. I will show how theseactivities might help to prevent violent conflict or at least avoid making things worse. Chapter4 introducesthe subjectand the need for risk assessmentas the context for consideringprogramand policy specifics.Chapter5 looks at externalefforts to changepolitical and intercommunalbehaviordirectly through political engineeringand developmentof civil society. Chapter6 examinesthe conflict implicationsof specific policies and projectsthat are the breadand butter of internationaldevelopmentassistance;Chapter7 considersthe work of the developmentagenciesas intellectual influencesand as wielders of various kinds of suasionand pressure. There are certainly conflict situationswhere the internationalagencies' activities are unlikely to be salientenoughor evenrelevantto haveany preventive influenceor effect. However,parallelinglentleson'sbottomline for

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the effort that would be requiredto createa coercivepreventionsystem,the effort requiredto orient the internationaldevelopmentagenciestowardearly conflict preventionwould be completelyjustified, and would makea major contributionto the post-ColdWar world, ifthe agencies'activities succeeded in preventingevenone or two conflict catastrophes.

Mandatesand Competencefor an OverdueResponsibility But do the developmentagencieshavethe mandatesandcompetenceto concern themselveswith conflict prevention?The merits of internationaldevelopmentagenciestaking conflict potentialandpreventioninto accountin their programsand policy advicewould seembeyondquestion.The preventionof a single Rwandaor Sri Lanka would meanthe avoidanceof massiveloss of life and injury. Preventionwould also reducethe volume of aid funds that must be diverted eachyear to humanitarianrelief and to reconstructinglost assetsand making up for lost ground. In the period between1980 and 1988 the World Bank allocated $6.2billion in loansto assisteighteenpostconflict countriesmake up this lost ground. Even on prudentiarygroundsthe argumentsfor developmentagencyattentionarestrong.Theconflicts oftendestroy infrastructurethat had beenfinanced by thesesameagencies.The descent into violent conflict may weakenor destroya country'sability to serviceits official and privatebank debt. Fundsallocatedto activities that help preventa conflict that otherwisewould have likely brokenout must havea benefit-cost relation that greatly exceedsthe rate of return of all alternativeinvestments. Although this propositioncannot,by its contrary-to-factnature,be empirically demonstrated(andrestson the assumptionthat developmentagency activities may have the power in somecasesto tip the balance,an assumption we will haveto explorebelow), the caseof Mozambiquecan serveasan illustration. From 1978 to 1987 Mozambiquereceiveda total of $2.6 billion in aid ("official developmentassistance,"or ODA), an averageof only $260 million a year. In 1994, two years after the peaceagreement,one-year postconflictaid amountedto about$1.3billion (equalto 100%ofthecountry's GNP), much larger in real termsthan pastaid volume but only a fraction of the resourcesMozambiquewill needcumulatively to make up for the estimated$20 billion of lost productionstemmingfrom its conflict.41 It may seemthat social and economicreengineeringfor the purposeof improving the effectivenessof conflict-resolutionprocesses,and reducing underlying inequalitiesand other sourcesof intergroup hostility, goes beyond the mandatesof theseagencies.The mandatesof bilateraldevelopment agenciesare set unilaterally bythe governmentsof thesedonornations.The questionof the acceptabilityof thesemandatesrestswith the recipientcoun-

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tries. If a recipientgovernmentprefersthat a donoragencynot work directly with local NGOs to strengthenthe country'scivil society,or not assistlocal independentjournalistsor humanrights activists,or not deliberatelyshapea developmentproject to widen the participationand distribution of benefits to a generallyexcludedethnic group, it can exerciseits sovereignright to reject such agencyinitiatives. In fact, somebilateral agencies,as we shall seebelow, are undertakingopen and publicizedactivities of social and political reengineeringwith the concurrence(or toleration)of the local authorities. A social engineeringactivity that is viewed as benign in one country (e.g., assistanceto women'sNGOs as a meansof increasingwomen'sempowerment)might be viewed as unacceptableinterventionif proposedin a more conservativecountry. The multilateral agenciesare a different story. Their original mandates were set in articlesof agreementamongthe founding membergovernments. Changeor expansionin the scopeof their activities has to be approvedby their boardsof executivedirectors, representingthe membergovernments. The World Bank hasbeenespeciallyimportant,comparedwith the regional developmentbanks (the Asian DevelopmentBank, African Development Bank, the Inter-AmericanDevelopmentBank, and more recently the EuropeanDevelopmentBank), for its intellectualleadershipin developmentpolicy and its global reach.In practice,the World Bank'sexecutivedirectorshave reinterpretedits mandaterecurrently to legitimate its concernand involvement with subjectsthat are departuresfrom its earlier narrow focus on economic growth as embodiedin the expansionof material output. Although subjectssuch as the participationof women in development,protectionof the environment,"sustainable"development,corruption,the quality of governance,and adherenceto internationalnormsconcerninghumanrights may appearprima facie as noneconomicand be forced upon the World Bank by pressuresfrom public opinion and nongovernmentalorganizations(NGOs), they havebeenincorporatedinto a largereconomicparadigmthat takesinto accountthe relationships,quantitativeand institutional, betweeneconomic expansionand such relatedor componentprocessesand factors. The extensionof the paradigmto includethe relationshipsbetweendevelopment and violent conflict has startedonly recentlybut has alreadybecomelegitimated by the World Bank's managementand by U.N. Secretary-General Kofi Annan. In an addressto the World Bank staff in October 1999,Annan notedthat "postconflictpeace-building"was a "major innovationof the 1990s, and somethingof a growth industry." He added: But how much better it would be ... if we could preventtheseconflicts agreethat it is useful from arisingin the first place.... [M]ost researchers

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 33

to distinguish"structural"or long-term factors, which makeviolent conflict more likely, from "triggers" which actually ignite it. The structural factors all have to do with social and economicpolicy, and the way that societiesgovernthemselves.It is herethat the link betweensecurity and developmentpolicy is mostobvious.... So the fact that political violence occursmore frequently in poor countrieshasmore to do with failures of governance,andparticularly with failure to address"horizontal" inequalities, than with poverty as such.... If I could sum up my messagethis afternoonin one sentence,it is that humansecurity,good governance,equitabledevelopmentand respectfor humanrights are interdependentand mutually reinforcing. If war is the worst enemy of development,healthy and balanceddevelopmentis the bestform of conflict prevention.42 Annan-saidthat he welcomed"Jim Wolfensohn'scall for the World Bank and its partnersto start askinghard questionsabout 'how we can bestintegrate a concernfor conflict preventioninto developmentoperations.'" But why hassucha call beenso long overdue?In the five decadesduring which the developmentorganizationshavebeenat work, therehas beenno dearthof internal conflicts underminingif not destroyingtheir projectsand hindering if not reversingaltogetherthe developmentprocess.In fact, as someof the World Bank'sand other developmentagencies'country experiencesthat we will review heredemonstrate,conflict preventionhasbeenan occasionalagencyobjective, and the relevanceof developmentassistance activities to incipient or actual conflict has beenobvious and not unnoticed. Theseagencieshavealwayshadamongtheir staffsmany sophisticatedpractitioners of developmentdiplomacy and the developmentprofessions.It is remarkable,then, and indeedreprehensible,that it hastakenso long to reach this recognition that conflict preventionmust be integratedinto development operations. The mostcommonlyheardexplanation,by the developmentpractitioners themselves-and in the caseof the World Bank, by the "strict constructionist" defendersof the bank's original charter-isthat their mandateshave dictated a focus on the economic and the technical problems of development. The strict, and artificial, wall erectedbetweeneconomicsand domestic politics very broadly defined is evident from the World Bank's earliest work on two of our deeplydivided casecountries,Sri Lanka(formerly Ceylon) and Malaysia (formerly Malaya). In the 1950s,the World Bank senttechnicalmissionsto manydeveloping countriesto analyze their conditions and design initial developmentprograms.Thesewere influential studies,commonly the first comprehensive, development-oriented examinationsof theseeconomies.The studiesreflected

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the World Bank'srigid stanceagainstany (public) discussionofthe internal political affairs of thesecountries (or countries-to-be).Even granting the appropriatenessof this constraintat the time (in contrastwith the Bank's growing franknesson internalsocial and political issuesin recentyears),it is striking how sanitizedthe studiesread today. They are silent on the key intergroupdistribution questionsthat were alreadysalientthen, and that have dominatedtheir politics and economicdevelopmentever since, including whetherthe country avoidedor fell into civil war. As an example,the report on (then) Malaya said nothing about income distribution or the potentialeffectsof developmenton the centralissueof the ethnic sectoraldistribution of the labor force.43 The 1953 report on (then) Ceylon reflects the optimism over interethnicrelationsin that country soon after independence,describingthe different groups as "living side by side with an unusualdegreeof communaltolerance."There is a hint of awarenessof significantethnic differenceand stereotypingin its one sociological, as it were, observationthat the Tamil were "a particularly hard-workingand energeticpeople,"a complimentnot given to the island'sotherethnicgroups. The study'sextensivediscussionof educationomits any mentionof the Tamil overrepresentation (in proportionto their population)in the schools,professions, and (as a result) the civil service.A readernot knowledgeableabout Ceylon would havecomeaway from the World Bank study with no inkling that ethnic conflicts were alreadybrewing with respectto language,educa44 tion, and other subjectsrelevantto the country'seconomicdevelopment. The developmentpractitionersmight also argue,with somejustification, that getting the economicandtechnicalaspectsright is difficult enough.The accumulationof additional subjectsthat the agriculture,infrastructure,education, or other project designersmust "take into account"-suchas environmental impact, effect on poverty, institutional context and relation to governancereform, impact on women, participation of beneficiariesand NGOs in projectdesignandimplementation-has addedgreatly to the complexity of their work and to the interventionistcharacterof much policy dialoguewith governments.Postconflictreconstructionis only the latestof this accretionof objectivesand tasks.Thereis always a dangerthat the formal addition of conflict preventionas a new subject-with its additional requirements,project anbureaucraticbaggagein the form of assessment nexes,new appraisalcriteria, staff reorientationsessions,and additionalexposureto evaluation-willbe receivedby an agency'sstaff asjust one more burden,one more challengeto overcomewith creativeboilerplate. More fundamentally,the institutional unreadinessto grapple with conflict prevention,whetherin postconflictsituationsor where violent conflict may be a potentialratherthan actual problem,hasbeena major conceptual difficulty. Reflectingthe natureof their mandatesand objectives,the devel-

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opmentagencies'intellectualparadigmshavebeenessentiallyeconomic.The agenciesbegan to employ social scientistsother than economistsonly in recentyears,mainly anthropologistsand political scientists,but thesewere few in number comparedwith the historic dominanceof the economists. Economicshasbeenthe discipline for analyzingcountry circumstances,for framing the policies to be promoted, and for evaluating the suitability of individual projects for agency support. Over the half-century the international developmentsystemhas been in existence,great advanceshave occurred in the conceptualand analytic armory that economicscan bring to bearto diagnosedevelopmentproblems,designpolicies and programs,and evaluateinterventionsand their outcomes.The economistsand statisticians of the international agencieslabored for years to help developingnations establishdomesticdata-gatheringand researchinstitutions. A global professionalnetwork now existsthat hasproduceda vastquantityof informationand analysis.The accumulatedliteratureof "developmenteconomics"is enormous. The boundariesof economicshave alsoexpandedin new directions,useful for analyzingthe developmentprocess.Beyondthe traditional attentionto macroeconomicissues,tradepolicy andexchangerates,monetaryandinflation management,public-sectorfinance,andsoon, economicshasbranchedout to explore institutional problems,such as the dynamicsof bureaucraticbehavior,collective action, corruption,and alternativemodesof governance. The conceptualdifficulty is that this foundationdiscipline for the developmentagencieshas had a major blind spot that has kept its practitioners from applying their tools to the relationshipsbetweendevelopmentand conflict and to the ethnicand cultural phenomenathat are at the heart of much Third World conflict. One economistwho has written on theseproblems, Robert Klitgaard, describesthe ethnicity blind spot as a deliberateself-imin the pracposedhandicap,a topic that hasbeen"overlookedor suppressed tical literatureon economicandpolitical development."He citesoneeminent Nobel economist'sview: JanTinbergenreflectedon the subject... in his review ofthreedecadesof work on economicdevelopment.Among the determiningfactorsof developmentwere "racial differences." "Objectivetreatmentof this subjectis obstructed,however,by the emotions arousedby two extremeviews: oneassumesa priori that the subject is taboo;the other,that whites-andevenmore particularly-Germandefined Aryan people-aresuperior in all respects.. . . I do not think researchon thesequestionshasa high priority."45 Writing in the early 1990s,Klitgaard went on to note that the conceptsof race and ethnicity are "analytically slippery" and that relevant developing

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country data are scarce."Most peopleinterestedin economicand political developmentare untrainedand perhapsafraid of the anthropologicaland biological fields that might throw light on ethnic differences.... Presumably, ethnic inequalitiesare affectedby public policies toward education, employment,infrastructure,markets,and affirmative action. I believe an importantchallengeis to understandhow and how much, and under what circumstances."46 Klitgaard also cites a review doneabout 1980 oftwentytwo coursesyllabi on economicdevelopmentin U.S. universities,none of which mentionedethnic issues.Tinbergenand Klitgaard overstatedsomewhat the narrownessof the profession.For example,raceand ethnicity figure prominently in studiesof the structuresand functioning of Southeast Asian economiesand their racial/ethnicdivisions of labor, and in economic and political scholarshipon the ethnically tiered societiesof Europeancolonies in Africa. 47 Nevertheless,their point is generallycorrectfor quantitative or empirically basedpolicy research.It was only in the late 1990s that World Bank and academiceconomic researchbegan to nibble at theseissues. The reluctanceof the World Bank to engagethe issuessurroundingrace and ethnicity stemsfrom the institution'straditional hesistancyto be drawn into "sovereignty"questionsandthe traditionalresistanceof theWorld Bank's clients towhat they deemedunacceptableintrusion into areasof their sovereign domesticrealm. Beginning in the early 1970s,the long struggle over incorporating the environmentas a proper and integral part of the World Bank'sresponsibilitieshas illustratedthe difficulty faced by any expansion in its scopethat appearsto contractthe areaof sovereignpolicy not to be trespassed. The promotersof concernover the environment,within and outside the World Bank, also faced considerableoppositionby Bank staff who resistedinjection of environmentalcriteria into project work and the creation of a new unit in the organizationto introduceenvironmentalreview and perspectiveinto Bank operations.Intrusion into "sovereignty" issues followed naturally, but not easily, as the World Bank beganto be pushedto take accountof the rights of peoplewho would be forcibly relocatedunder Bank-financedhydroelectricand other projects.A perspectivethat now appearsunassailablewas long resistedas excessivelyintrusive.48 During the 1990s,the areanot to be trespassedcontracteddramatically. Arguing that the characterof governmentwasrelevantto the successof economic development,the World Bank undertooknew activities to reform and strengthen"governance."It defined governanceas the "mannerin which power is exercised"in managingresourcesfor development.It arguedthat the institution'sconcernfor openand "enlightened"policy-making,"professional" bureaucracy,executiveaccountability,civil society participationin

CONFLICT AND THE INTERNATIONAL DEVELOPMENT AGENCIES 37

public affairs, and the rule of law was legitimate under the World Bank's mandate. The Bank'sArticles of Agreementexplicitly prohibit the institution from interferingin a country'sinternalpolitical affairs andrequireit to takeonly economicconsiderationsinto accountin its decisions.Thus, the Bank's call for good governanceand its concernwith accountability,transparency,and the rule of law haveto do exclusivelywith the contributionthey maketo social andeconomicdevelopmentand to the Bank'sfundamental objectiveof sustainablepoverty reductionin the developingworld.49 In practice,the World Bank'sinvolvementwith governanceissuestakes it into suchareasas public-sectormanagement(civil service,public investment, "strategic planning," economicmanagement,etc.), a country'slegal framework,and military expenditures.Humanrights are also saidto benefit from Bank programsthat reduce poverty and unemployment.As we will arguein somedetail below, in deeply divided societiesat risk to conflict an effort to sustain a final wall betweenthe World Bank and the "political" would be highly artificial. The ethnic-political roots of conflict in many of thesesocietiesare intertwinedwith virtually every aspectof governancethe Bank acceptsas legitimate for its attention. Finally, thereare thosewho questionthe competenceof the aid agencies. The messageof this book is that theseagenciesshouldbe chargedwith helping to ameliorateroot causesof internal conflict in developing countries. Have they demonstratedthe capacityto initiate and supportsubstantialsocioeconomicchange?Doesaid work?This questionhasbeenexaminedmany times over the years. The findings of most independentscholarshiphave concludedthat aid has had a satisfactory(albeit certainly not 100 percent), record of accomplishingits objectives.One exampleis the conclusionof a major studyfrom 1986,by RobertCassenandcolleagues,appropriatelytitled DoesAid Work?, namely,that "the great majority of aid succeedsin its developmentobjectives."so In the broadestsense,this study finds that most aid doesindeed"work." It succeedsin achievingits developmentalobjectives(wherethoseare primary), contributingpositively to the recipientcountries'performance,and not substitutingfor activities which would haveoccurredanyway.That is not to saythat aid works on everycount.Its performancevariesby country andby sector.... And thereis a substantialfraction of aid which doesnot work-which may have a low rate of return, or becomederelict shortly after completion,or neverreachcompletion,or have positively harmful effects.51

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Citing the extensiveevaluation literature on aid activities that records "high" ratesof good or acceptableresults,the Cassenstudy notesthe difficulty of settinga meaningfulstandardfor the overall performanceof the aid enterprise. [T]herehavebeena significantnumberof failures. The exactproportionis not known; but supposingit proved to be a quarteror a third of all aid, would that be considered"good" or "bad"?... A recordshowingonly the achievementof high ratesof return would be evidencethat the challenges of developmentwere not being addressed .... Somefailures, then, are inevitable and not objectionable.But what would be a tolerableproportion? Oneapproachwould be to compareinvestmentunderaid with other typesof investment.If x per cent of aid fails, what percentageof private investmentfails? Or of public investmentotherthanaid?Unfortunately,x 52 is unknownboth in aid and in mostother spheres. A more recent paperon the efficacy of the World Bank's influence on recipient country policies noted "the key role that the World Bank and its staff have played in the promotion of better economicpolicies at both the macro level and the sectorallevel. Through the numerousmissions,policy dialogues,andevaluationsof specific projects,the Bank hasprovideda tutelage function in promotingsoundeconomicanalysis.This has had an enormous impact on the type of economic policies pursuedby countries and, ultimately, on the performanceof their economies."53Needlessto say, the impact of this influence has varied tremendouslyfrom country to country and from time to time. (A recentstudy of aid influenceon economicpolicy reform in ten African countriesin the 1980s and 1990s,commissionedby the World Bank, reachedmixed conclusionsregardingaid efficacy and the policy outcomes.)54The obstaclesto effective influenceon economicstabilization policies (such as exchangerate reform) are not nearly as great as thosefacing efforts at fundamentalchangesin the economicrole of governmentor policiesthat would weakenthe position of powerful vestedinterests. Policy changesat the project or micro level are generally easierto bring aboutthan across-the-board institutional change.The effectivenessof donor influencemay alsovary (1) accordingto what aid instrumentsareemployedtechnical assistance,investmentprojects, general financing for budget or balanceof paymentssupport,(2) the volume and timing of the aid offered, (3) the degreeof coordinationof influence among the donors, and (4) the natureof the relationshipbetweendonorsand recipients.We return to these issuesbelow, in the contextof the conflict-relevanceof the donor agencies, ratherthan their developmentor economicmanagementimpact per se. Except for the efforts to affect political institutions and processesin de-

CONFLICf AND THE INTERNATIONAL DEVELOPMENT AGENCIES 39

veloping countries,wherebilateral developmentagenciespredominate,the World Bank will figure prominently in what follows. This is becausethe Bank haslong beenthe leading sourceof ideasand adviceto policymakers in developingcountries.It attainedthis intellectualrole by developinga larger staff of highly qualified policy analystsanddevelopmentprofessionals,covering virtually all sectors,than any other internationaldevelopmentagency, by conductingextensiveresearchinto developmentproblems,by publishing statisticaljournals and developmentstudiesthat have attainedworldwide readership,andby being ableto hire consultantsfrom the worldwide pool of developmentacademicsand experiencedpractitioners.Although the World Bank has not been a primary sourceof intellectual innovation, compared with academiccontributionsto developmentmanagementand economics,it has servedas the leading "conveyor belt" for ideas about development policy.55Thoughnot free of bureaucraticandoperationalproblemsasit grew in size, the Bank has had the ability to absorbnew ideasand adjust its emphasesand operationsto changingconditionsover time. The World Bank began with a focus on project soundnessand factors determiningborrowing-countrycreditworthiness,suchas governmentbudgets,tax systems,and monetarystability. To these"were addedin the 1950s the needfor national developmentplans. The Bank beganto stressthe role of the privatesectorduring the 1960s,and of rural developmentand population policies in the 1970s.The 1980sin tum were the decadeof 'structural adjustment'and 'outwardorientation.'One implicationof this is that conditionality was part of the Bank's approachto lending from practically day one. Bank money always camewith ideasand advice attached.,,56 The Bank's role as the preeminentsourceof developmentpolicy advice was enhancedby its formal position of convenerand analystfor many of the country aid-coordinationgroups,commonly called Consortiaor Consultative Groups(CGs). Betweenthe emergenceof postconflictreconstructionas a distinct subjectfor Bank policy, and its establishmentof a Post-Conflict Unit (recentlyrenamedthe Conflict PreventionandReconstructionTeam),a Post-ConflictFund, and a conflict researchprogram, the World Bank has taken the plunge. Adoption of a more proactiveBank role with respectto preventionin the twenty-first centurywould go a long way towardestablishing this objectivewith the gravity it deserves. A more proactiveposturewould also reinforcethe World Bank'scoordination with that whole group of bilateral aid agencies,which have already moved to strengthentheir capabilitiesand cooperationon the problemsof conflict. Under the aegisof the DevelopmentAssistanceCommitteeof the Organizationfor Economic Cooperationand Development(OECD), the twenty-two membercountriesand the EuropeanCommissionhave formed

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task forces, issuedguidelines,and undertakenevaluationsof their conflictresponseexperience.Someof the aid agencieshavecreatedspecialunits to focus on crisis preventionand response(e.g., the PeacebuildingUnit of the CanadianInternationalDevelopmentAgency). Coordinationcould also be strengthenedwith agenciesin the U.N. systemthat havebeenmoving in the samedirection. For example,the U.N. DevelopmentProgrammerecently elevatedits EmergencyResponseDivision, createdin 1996, to the statusof a bureau,renamingthe unit the Bureaufor Crisis Preventionand Recovery. The resourcesostensiblydevotedto conflict preventionhavebeengrowing undertheseevolving policies and institutional initiatives. The relevanceandefficacy of developmentaid asan instrumentfor change in developingcountrieshaslong beenclear. The questionsof interestto us, which I examinenext in Chapter2, have to do with aid's relevanceto conflict, whetherdeliberateor unintended,positive or negative. Notes 1. CarnegieCommission,1997,p. 11. 2. Stremlauand Sagasti,1998,p. 13. 3. SamuelP. Huntington,"The Clashof Civilizations," in Foreign Affairs 72, no. 3 (1993): pp. 22-49. 4. "Chechnya'sPresident,Asian Maskhadov... appealedto PopeJohnPaul II to intercede,sayingthat Islamic nationshadfailed to help Chechnya.'In your name, we are askingthe entire Christian world to savethe Chechenpeoplefrom another genocide.... We aresendingthis appeal toyou only after we havebecomeconvinced that the Islamic world has remainedindifferent to our appeals,'" New York Times, October29, 1999,p. A13. 5. Paragraphdrawn from Martin O. Heisler, "Ethnicity and Ethnic Relationsin the ModemWest," in Montville, 1991,pp. 21-25. 6. PeterWallensteenandMargaretaSollenberg,"Armed Conflicts, Conflict Termination, and PeaceAgreements,1989-96,"in Journal of PeaceResearch34, no. 3 (1997), cited in Tellis, 1997. 7. EuropeanPlatform, 1998.Details on numbersoffatalities, refugees,and displacedpersonsare publishedin the annual World DisastersReportby the International Federationof RedCrossandRedCrescentSocieties,issuedby Oxford University Press.Additional informationon refugeesandinternally displaced persons,country by country,is publishedannuallyin the World RefugeeSurvey,by the U.S. Committeefor Refugees. 8. In Children on the Frontline: The Impact of Apartheid, Destabilizationand Waifare on Children in Southernand SouthAfrica. New York: UNICEF, 1989. 9. For one review of the typesof economiceffectsof violent conflict in Africa, seeNicole Ball, The EffectofConflict on the EconomiesofThird World Countries,in Deng and Zartman,1991.For a brief surveyof estimatesof direct andindirect civilto estimatingeconomiccostsof ian war deathssince1945,andof analyticapproaches warfare,seeGeoff Harris, "Estimatesof the EconomicCostof Armed Conflict: The Iran-Iraq War and the Sri Lankan Civil War," in JurgenBrauerandand William G.

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Gissy, eds., Economicsof Conflict and Peace.Aldershot, UK: Avebury, 1997, pp. 269-290. 10.Lisa Morris GrobarandShiranthiGnanaselvam, "The EconomicEffectsof the Sri Lankan Civil War," in EconomicDevelopmentand Cultural Change41, no. 2 (January1993): 395-405. 11. World Bank, 1998,Synthesis,p. 19.The reportnotesthattheseestimatesshould economicdecline, but probably overstate be taken as indicationsof unprecedented the drop in activity by omitting unrecordedactivity. 12. Messeret aI., 1998,citing R.H. Greenand M. Mavie, "From Survival to Livelihood in Mozambique,"in IDS Bulletin 25, no. 4: 77-84. 13. AmartyaSen,"EconomicRegress:ConceptsandFeatures,"in Proceedingsof the World BankAnnualConferenceon DevelopmentEconomics,1993,pp. 330-331. 14. Messeret aI., 1998,p. 4. 15. Cambodiais often cited as a country socializedto political and interpersonal violenceas a consequence of its recenthistory. For example,commentingon several brazenassaultson young women(apparentlyfollowed by desultorypolice investigation), oneprominentCambodiawatcherobservedthat "Most Cambodiansaredeeply concernedaboutthe level of savageryin this society." Bill Herod, in The Cambodia Daily, January24, 2000. El Salvadoris anotherexample."Among perhapsthe most disturbing social phenomenaof contemporaryEl Salvadorthat the PeaceAccords implementationdid not resolveis that of the seriousand growing problemof violent crime.This problemof the microinsecurityof individualsandenterprises(ratherthan the macroinsecurityof the state) is in part a legacy of the conflict." World Bank, 1998,Vol. III, p. 10. 16. GermanFoundation,1996,p. 8. 17. See,for example,JenniferLeaning,S. Briggs, andL. Chen,eds.,Humanitarian Crises.Cambridge,MA: HarvardUniversity Press,1999;K. Cahill, ed.,A Framework for Survival: Health, Human Rightsand HumanitarianAssistance.New York: Routledge,1999; B. Levy and V. Sidel, War and Public Health. New York: Oxford University Press,1997. 18. Examplesof programsoffered in 2000 include master'sdegreesin complex humanitarianemergencymanagement at Columbia,Tulane,Tufts, andJohnsHopkins universities,with specializationsin such areasas disastermanagement,and forced migration and health; shortcourseson emergenciesand public health(disease,psychosocialtrauma,etc.) in developingcountries,sponsoredby the U.S. Office of ForeignDisasterAssistance;a coursein policy, health,andconflict given by the London Schoolof HygieneandTropical Medicine; a training courseon children andfamilies in humanitarianemergencies,by CaseWesternUniversity; a short courseon public healthandhumanitarianaid at the Centerfor Researchon the Epidemiologyof Disasters,in Brussels;anda summerprogramin forced migrationby the Oxford University RefugeeStudiesProgram.The U.N.-relatedtrainingprogramsaredescribedon http:/ /www.reliefweb.intltraining. 19.For oneevaluationof the continuumpropositionin four postconflictcases,see DonaldG. McClelland,"ComplexHumanitarianEmergenciesand USA/D'sHumanitarian Response."Washington,DC: USAID, 2000. 20. Dani Rodrik, "WhereDid All the Growth Go?ExternalShocks,SocialConflict, andGrowth Collapses"(mimeo).Cambridge,MA: HarvardUniversity, 1998,p. 28. 21. Examplesdrawnfrom Henri Pirenne,EconomicandSocialHistory ofMedieval Europe.New York: HarcourtBraceJovanovich,1927,pp. 3--33, 67,142-148,196.

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22. "The new charteradoptedby the meetingreflectedthe lessonsof Kosovo and other internal conflicts that haveeruptedsincethe collapseof Communism.It envisioneda new role for the Organizationfor Security and Cooperationin easingtensionsbeforethey explodeinto war, including the possibility of interveningnotjust in conflicts betweenstates,but within states.'We havewitnessedatrocitiesof a kind we had thoughtwere relegatedto the past,' the charterdeclared.'In this decade,it has becomeclearthatall suchconflicts canrepresenta threatto the securityof all O.S.C.B. participatingstates.Participatingstatesare accountableto their citizensand responsible to eachotherfor their implementationof their O.S.C.B.commitments,'it said. 'We regardthesecommitmentsas our commonachievementand thereforeconsider them to be mattersof immediateand legitimateconcernto all participatingstates.' Thedocumentenvisionsrapid-response teamsthatcouldbedeployedquickly to managecrises."NewYork Times,November20,1999,p. AS. 23. For a review of the evolution and statusof internationallaw respectingcivil wars, humanitarianassistanceduring armedconflicts, treatmentof refugees,peacekeeping,and internationalorganizationcoercion,seeHilaire McCoubreyand Nigel D. White, International Organizationsand Civil Wars. Brookfield, VT: Dartmouth, 1995. 24. David Rieff, "Wars Without End?," New York Times,September23, 1999,p. A27. 25. National IntelligenceCouncil, 1999. 26. RomeoA. Dallaire, in Feil, 1998,pp. v-vi. 27. CarnegieCommission,1997. 28. For a brief review of findings on economicsanctioneffectsand of the issues raisedby the sanctionsexperienceduring the 1990s,seeKimberly Ann Elliott and Gary Hufbauer,"Ineffectivenessof EconomicSanctions:SameSong,SameRefrain? EconomicSanctionsin the 1990's,"in AmericanEconomicReview,PapersandProceedings(May 1999): 403-407. 29. Avruch, 1998,p.102. 30. Ibid., pp. 101-102.Italics in original. 31. Ibid., p. 103. Italics in original. 32. For a detailedanalysisof the peaceaccordprovisionsand their flawed implementation,seeInternationalCrisis Group,Is DaytonFailing? BosniaFour YearsAfter the PeaceAgreement.Brussels:InternationalCrisis Group, 1999. 33. Jean-LouisSarbib et aI., "Fighting Poverty Remainsa Global Imperative," International Herald Tribune, Novemberl7, 2001. 34. Jentleson,2000a,p. 10. 35. Jentleson,2000b,p. 23. 36. Ibid., pp. 11-12.The GreatLakesregion of Africa providesa recentexample of conflict escalationinvolving severalcountries. 37. J. Brian Atwood, "Suddenly,Chaos,"WashingtonPost, July 31,1994,p. 9. 38. TestimonyofAndrewNatsios,Administrator,USA/D, beforethe SenateAppropriations Committee,May 8, 2001, www.usaid,gov/press/spe_testltestimonyl2ooll ty010508.html,p. 4. 39. Ted Morse, "HowDo We Changethe Way We UseForeignAssistanceto Help PreventDeadlyConflicts?" in USAID, 2001,pp. 86-87. 40. Jentleson,2000b,p. 36. 41. Aid figures from World Bank, World DevelopmentReport,variousyears. 42. World Bank pressrelease,October19, 1999.World Bank Web site.

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43. World Bank, The EconomicDevelopmentof Malaya; A report of a mission organizedby the International Bankfor Reconstructionand Developmentat the requestofthe Governmentsofthe FederationofMalaya, the Crown ColonyofSingapore and the United Kingdom.Baltimore, MD: JohnsHopkins University Press,1955. 44. World Bank, The Economic Developmentof Ceylon; A report of a mission organizedby the International BankforReconstructionand Developmentat the requestofthe GovernmentofCeylon.Baltimore,MD: JohnsHopkinsUniversity Press, 1953. 45. Cited in Klitgaard, 1991,pp. 199-200. 46. Ibid., p. 200. 47. An early exampleis by Hla Myint, "An Interpretationof EconomicBackwardness,"in Oxford EconomicPapers.Oxford, UK: Oxford University Press,1954.Although Myint stressesthe ethnically dualistic characterof colonial economies,he treats the "indigenous" populations(erroneously)as homogeneousopposite the colonialsand their importedimmigrantworkforces. 48. SeeRichardWade,"Greeningthe Bank: The Struggleover the Environment, 1970-1995,"in Kapur et aI., 1997. 49. World Bank, 1994,p. vii. 50. Cassen,1986,p. 13. Italics in original. 51. Ibid., p. 11. 52. Ibid., p. 12. 53. Glenn P. Jenkins,"ProjectAnalysis and the World Bank," in AmericanEconomic Review,PapersandProceedings(May 1997): p. 41. 54. Shantayanan Devarajan,David Dollar, andTorgny Holmgren,Aid andReform in Africa. Washington,DC: World Bank, 2001. 55. Michael Gavin andDani Rodrik, "The World Bank in Historical Perspective," in AmericanEconomicReview,Papersand Proceedings(May 1995): 332. 56. Ibid., pp. 332-333.

2. Conflicts Fought, Conflicts Avoided Nine Cases

Examplesof factorsthat havebeenassociatedwith internaldevelopingcountry conflict, both positively andnegatively,arescatteredthroughoutthis book. In this chapterI review the conflict experiencesof nine countries.Five fell into violent conflict. Four took stepsthat preventedsocial conflict, or lowlevel violence,from escalatinginto generalviolent conflict. In at leastseven of thesecases,the internationaldevelopmentagencies(in onecasethe IMP) hasplayed(or is now playing) a significant role with respectto someof the root causesof the actual or potential conflicts. The casesillustrate (among other things) how these agenciescan be relevant, either through (a) their influence on governmentconflict-relevantpolicies, (b) their financial support, strengtheninggovernmentcapabilitiesto carry out suchpolicies, or (c) throughspecific developmentprojects(in agriculture,education,transportation, etc.). The casesinclude examplesof agencyactivities that ameliorated tensionsand contributedto conflict avoidance;that missedameliorationopportunities;or that madethingsworse.In two cases(PakistanandSri Lanka), lacking an explicit ameliorationconceptor programframework, the donors workedat cross-purposes, simultaneouslyexacerbatingandamelioratingwith various policies and projects. For the casesthat fell into conflict, we sketcha few counterfactual("whatif') scenarios:how different agencyactionsmight plausibly have produced a better,conflict-avoiding, outcome.The casesalso suggestlessonsfor future conflict mitigation or prevention,which will be drawn togetherin the final chapters.The accountsof Mauritius and Bhutanare includedmainly as brief additionalexamplesof successfulconflict preventionand management basedon policiesof the typesthatdevelopmentagenciescommonlyencounter. It is insufficient and sometimesmisleadingmerely to draw connections betweeneconomicgrowth and political stability, and then concludethat the developmentagenciescanreston the assumptionthatgrowth-promotiontranslates into conflict-prevention.If that assumptionwere the whole story, the responsibility to help preventconflict would be fully met by the agencies' continuouswork on strengtheningtheir contributionsto development.Becausethat assumptionis not the full story, it is regrettablethat therehavenot been many case-studyexaminationsof the conflict relevanceof development(ascontrastedwith humanitarian)aid. The countryexperiencesbrought 44

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togetherin this chapterillustratehow suchresearchcould yield lessonsabout the conflict-amelioratingpotentialitiesof the developmentagenciesthrough both policies and projects.I believethe importanceof such lessonsis indisputable, especiallythose drawn from the experienceof conflicts successfully containedor prevented.At the sametime, the readershouldbearin mind thatthe policy historiesherearereviewedmainly from a conflict perspective.In retrospect,successfulinternal "peacepromoting" policy packages mayalsobe judgedto havebeendeficientfrom otherperspectives(e.g.,environmentalimpact, rich-poor income gaps, or financial sectordevelopment).We make no attemptto view our casesfrom theseother,much-studied,angles.

Conflicts Fought:Aid Complicity Pakistan: Complicity of Donor Advice The role the donorsplayedin Pakistanin the 1950sand 1960sis especially interestingbecauseof its relatively unambiguouscharacter,and the authoritative accountprovidedby one of the important actors.EdwardMason, coauthor(with RobertE. Asher) in 1973 of the first history of the World Bank, had beenheadof the foreign economicteamadvisingthe Pakistanplanning commission.In the World Bank history, Mason andAsherdescribethe relationship of the donors (mainly the bank, which was convenerand intellectualleaderof the aid consortiumgroup) with the governmentof Pakistan, and they layout the economicdisparitiesand policies that were amongthe major reasonsfor EastPakistan'ssecessionand the civil war. Beforeturning to their account,it will be helpful to recall the essentialevents. Pakistanwas born in the partition of India in 1947. While the Congress Party of Gandhi and Nehru wanteda united India, the British had to cedeto the preferenceof MohammedAli Jinnah'sMuslim League for a separate statecomprising two regions in which the majority of the population was Muslim. Although partition led to vast populationmovements(and 800,000 fatalities) as Hindus and Muslims movedout of the jurisdictionswherethey would haveendedup minorities, a sizablepopulationof Muslims remained in India. The two wings of independentPakistanwere separatedby 1,000 miles of Indian territory. The West wing economywas moderatelymore advancedthan that of the East and grew more rapidly in the yearsafter independence.The widening of this gap was a deliberateresult of central governmentpolicies to give priority to the economic developmentof the West. E. WayneNafziger summarizedthesepolicies as follows: The Pakistangovernmentredistributedincome from export and subsistenceagricultureto industry and domesticallyorientedcommercialagri-

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culture through policies of an overvaluedrupee(which favored imported inputsfor industryandlarge-scaleagriculturerelativeto jute, tea,andother primary-productexports), a compulsory governmentprocurementof foodgrains at low prices for urban areas,generoustax concessionsto industry, and the lack of theseto peasantagriculture.Thesepolicies transferred savingsfrom agricultureto industry, primarilya transferfrom Eastern small farming to Westernindustry. Conservativeestimates,basedon world prices,indicatethat over 24 percentof grossproductoriginating in the agriculturesector--orabout70 percentof its savings-wastransferred to the nonagriculturalsectorin 1964-65.As Easternpeasantsand small farmersbecameincreasinglyconsciousof the way in which muchof economic policy wasbeingusedlargely on behalfof a Westernindustrial and commercialruling elite, discontentwith the political leadershipintensified, contributingto the humanitariandisasterof 197t.I The economicgap was also manifest in substantialunderrepresentation of Bengalisin the seniorranks of the professionsand the bureaucracy. Although the two wings sharedIslam, the Bengali populationof the East was traditionally more tolerant of diversity and less drawn to orthodox fervor. The two wings also differed in languageand othercultural characteristics. Early on, Jinnahdecreedthat Urdu,the dominant,but not only, language of the West, would be the sole official languageof Pakistanas a whole. This was deeplydivisive even within the Eastwing where an Urdu-speakingminority, Biharis, werefavoredover the majority Bengalisfor governmentjobs requiring use of Urdu. A mere five years after independence,the language issue"crystallized" a Bengali nationalismthat was being fired up by a com2 bination of economic,cultural, and political grievances. Pakistanwas unable to establisha stable, democraticsystem.Military dictatorshipsrecurrentlyinterruptedperiodsof unstableand corrupt parliamentarygovernments.In addition, the country had fought and lost two wars with India prior to the EastPakistancrisis in 1971. In late 1970, after a year of rising unrestin both wings, the generalin power, Yahya Khan, called for the first direct generalelectionssinceindependence. The populationof East Pakistanthen numbered53 percentof the country'stotal. Consequently,the East wing representationin the national parliamentwas slightly larger than that of the West. In the election campaign,the long-standingBengali complaints over the rangeof policies seenas discriminatorywere reflectedin the platform of the Bengali party (the Awarni League,headedby SheikhMujib Rahman).The platform called for a new political structureunderwhich all federal governmentpowersexceptdefenseand foreign policy would be devolved to the provinces.EastPakistanwould haveits own independenttaxing policies, monetary,fiscal and trading authority, and foreign exchange

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control. Sentimentagainstthe West had hardenedthe previous year, when the Easthad receivedlittle help from the central governmentin the wake of a disastrouscyclone and tidal wave that had killed an astonishinghalf million EastPakistanis. The Awami League went on to capturealmost all the East wing seats, thereby winning an absolutemajority in the national parliament.Civil war was precipitatedafter Yahya Khan and the main political party of the West refusedto permit Sheikh Mujib to form the national government.Instead, Yahya Khan arrestedMujib and in March 1971 launcheda military repression and rampagethat killed at least 300,000Bengalis.In the end, between the logistical difficulties of Pakistan'ssplit geography,and the intervention of the Indian army in late 1971,Pakistanwasforced to concedethe independenceof the Eastwing (i.e., Bangladesh). I tum now to the Mason-Asheraccount.It focuseson the economicdisparitiesthat contributedso importantly to Bengali disaffection,overwhelming the founding national sentimentof religious community. The breakupin late 1971 of the uneasyamalgamationthat hadfor twentyfour yearsbeenknown as Pakistanraisesacutelyembarrassingquestions for the [World] Bankandotherwould-bedevelopers.... How relevantand how timely was the Bank'sadviceon economicpolicy.... When the fall from gracebegan[in the late 1960s,afterPakistanhadearlierbeena model of good macroeconomic behavior],how hardshouldthe Bankor the members of the Bank-chaired consortium have pressedPakistanto carry out policies to which someof the outsidersattachedimportanceand to which the governmentpaid lip-service?3 In Pakistan,between1960and 1965,GNP increasedat an averageannual rateof 5.5 percent,agriculturaloutputat 3.5 percent,exportearnings at 7 percent,and large-scaleindustrial output at 13 percent.Pakistanwas on the way to becominga successstory. Or was it? Influential circles in EastPakistanfelt exploitedandexpressedgrievances,which werenot withheld from theWorld Bank.... David L. Gordon,residentrepresentative of the Bank and confidential adviserto the minister of finance, prepareda long memorandumin 1961 on economicrelationsbetweenEastandWest Pakistan... [analyzing] the deeply held feeling of eastwing intellectuals that their region was being exploited.4 Gordon'smemorandum,given to Pakistancabinetmembersand sent to bankheadquarters in Washington,listed the East'sarguments:the East'sshare of public expendituresshouldbe sharply increasedto reversethe widening of the incomegap betweenthe two wings, to promotea fasterrate of developmentin the Eastover that of the West,and to end the discriminatorypolicies under which there had been net financial transfersfrom East to West,

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highergovernmentspendingandinvestmentin theWest,the useof the East's foreign exchangesurplusesto financethe West'simports,andhigh protected prices for Westernindustrial productssold in the East. (In a Catch-22argumentthat appearedto demonstratecentralgovernmentdiscriminationagainst the East,the financial authoritiesregularly blocked releaseof budgetfunds formally allocatedto EastPakistanon the groundsthat previousreleaseshad been underspent.)In addition, the overvaluedexchangerate worked to the disadvantageof the East. The Bank had closerelationswith the Pakistanauthorities."Bank experts have collaboratedintimately with their Pakistanicolleagues .... The Bank also helpedto finance continuing assistanceby the DevelopmentAdvisory Serviceof Harvard University to Pakistan'sPlanning Commissionand the Provincial Planning Departments."sBecausethe East's grievanceswere largely economic up until the West's refusal to accept the election result createdthe overriding issueof power at the centerof the state,the question arises: Given the policy and financial importanceof the donors, could the civil war havebeenavoidedif the aid-providershad actedearlier and stronger? Could the donors have effecteda reversalof the economictrends and policies sufficientto put the relationsbetweenthe wings on a different course? In their account,MasonandAshermadeit clearthat the donorsunderstoodthe basicpolitical economyproblemof Pakistanat leasta decadebeforethebreakup. Unfortunately,neitherin their technicalpolicy assistancenor in their allocation of their own aid resourcesdid the donorsmove early enough,or with enough resources,to initiate an adjustmentof the economicrelationsbetweenthewings. The Bank favoredthe kinds of projectsit was bestat, and thesewere generally large,engineering-typeundertakings.It usually selectedthosepromising the highestratesof return, andthey tendedto be in WestPakistan.In evaluatinganongoingactivity suchasthePICIC (PakistanIndustrialCredit and InvestmentCorporation),the Bank concerneditself more with the efficiency of the managementand with the rate of return in PICIC invest.... Its mentsthan with the geographicconcentrationof thoseinvestments adviceon liberalizing the network of import controlsand giving the price systema chanceto work [advice favorableto the East] was good. It often took sympatheticnoteof objectivessuchasrural developmentandregional balance,but until the late1960sit was farfrom vigorousin their pursuit.It did not actively supportthe Comilla approachto rural development[an innovative programin the East] when the potentialitiesof that approach were first being demonstrated.Nor at the June 1965 meetingof the [aid] consortium... did it supportor encouragethe drive for socialjusticeenvisagedby the plannersin their [draft five-year plan] chapteron "Economic Problemsand Policies."6

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Although the planningtechnocratswere coming aroundin the late 1960s to recognizethe need foraddressingthe regionalimbalance,they werenot in control. "Despitethe fine words in the plan, the more meaningfulcue-the 1970-71 budget-reconfirmedthe old bias toward West Pakistan.By mid1970,the Bank'steamproducedan action report for EastPakistan,which was of immensepromiseand includeda major rural developmentprogram.... In retrospect,it is unfortunatethat the strategyof developmentthat the Bank had arrived at by mid-1970did not dominateits thinking five yearsearlier.'>7 Mason and Asher's conclusionsrespectingthe role of the World Bank apply equally to the donorsas a group. Expenditureallocationand net transfers betweenthe two wings did not arise as a subjectfor discussionat the donors'consortiummeetings.The consensusview was that the centralgovernmentwas carrying out good economicpolicies overall and that it made economicsenseto focus investmentin the West where long-termdevelopment prospectswere better. The American officials responsiblefor U .S.Pakistanaid relationswere also responsiblefor U.S.-Indiaaid relations(as was probablythe casefor the other donors);Pakistaniofficials were seenin a relatively favorablelight asmore responsiveto donoradvicethan werethe Indian officials. The "greenrevolution" wasstartingto yield substantialcrop production increasesin both India and West Pakistan;agricultural policy, fertilizer pricing policy, and the excitementover irrigation well expansion werethe principal developmentpreoccupations.By contrast,the greenrevolution innovations,highly dependentin the caseof rice on controlledwater applications,did not seemsuitableto East Pakistan.At risk to the region's frequentand heavy flooding, the East'sfarmers, quite rationally, relied on rice varietiesthat, while low-yielding, would grow rapidly when water levels surged.The Eastwas viewedas lacking developmentpotential,an essentially humanitarianproblem, and was consideredone of the world's major backwardregions needinglarge-scalefood aid for the foreseeablefuture. (The "backward-region"problem,especiallywhere its populationis potentially mobilizable,presentsspecialdifficulties we return to below.) The dominantview within USAID agreedthat investmentand aid should favor the region with the presumedbettereconomicprospects.As was the casewith World Bank staff, the USAID and U.S. embassypersonnelstationedin the Eastwereearly critics of the aid-allocationpattern.More sensitive to the disaffection of the Bengali elite, and seeing development opportunitiesearlier than their colleaguesstationedin the West, the Embassy andUSAID staffs in Dhaka, East Pakistan,pressedIslamabad,and Washingtondirectly, for allocation of more aid resourcesto the East wing. While the USAID leadership,located in Islamabad,appearsto have been aheadoftheWorld Bank inthe searchfor investmentpossibilitiesin the East

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(anexamplewasthescopefor local manufactureof low-lift irrigation pumps), they were unableto makeheadwayagainstthe centralgovernment'sopposition to any (nonhumanitarian)aid allocationshift until 1969,too late for any significant implementation.8 Therecanbe little doubtthat forging a unified stateout of a newly carvedout country,onedivided in two andseparatedby a thousandmiles of another statewith which relationsarehostile,would faceformidabledifficulties even if other conditionswere more favorable.Nevertheless,it is plausibleto argue (as EdwardMasonimplies) that Pakistancould haveavoidedthe violent breakupif the policy changesthe PlanningCommissionand the donorshad cometo by the late 1960shadbeeninitiated severalyearsearlier.By the end of the decadethe resultsof such a changewould havebeenvery visible in the East-interms of the prices for the West'sindustrial goods,the water control systemsand other infrastructurethat would have dotted the East's landscape(andthat havebeenaid-financedsinceBangladesh's independence), the employmentthesepublic works would have generatedin the East, the spreadof the Comilla project'ssocial engineeringandits palpableimpactof small incrementalimprovementsin peasantliving standards,and the opportunities andbenefitssuchprogramswould havecreatedfor the Bengalielite. Perhaps,asMasonsuggested,five yearswould havebeensufficient; although visible fruits would have been limited, five years, above all, would have demonstratedcredible intent in West Pakistanto reducethe disparitiesand reversethe direction of transfers. Under such circumstances, an electoralplatform calling for stripping the central governmentof all powersexceptdefenseand foreign policy would havehad little economicrationalefor the East,and might not havebeenput forth by the Awami League.A Leaguevictory in the 1970 electionswould then not haveposedto the West,andto the army, a fundamentalchallengeto the role and natureof the state.One might well object to this scenariothat the industrial elite families of the West would not likely haveagreedto such policy changesin the early 1960s.But even a modestshift could have supported an apparentlong-termequalizingintent, and could have beenmade credible had the consortiummembersmade regional distribution a major subjectof the aid dialogueand had shifted the regionalbalanceof their own projectsa few yearsearlier, ratherthan waiting until it was too late. In sum, the policy views, the technical planning assistance,and the resourceallocationsof the donors were highly relevant to the central issues betweenEastandWestPakistan.The donorsrecognizedthe depthof resentment in the East,but they actedto addressthis resentmenttoo late and with too little determination.Donor influenceon economicmattersin WestPakistan was substantial.The relationshipbetweenthe governmentand the do-

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nors wascordial. Becausethe rebuff USAID receivedwas not followed by a joint secondtry, one can only speculate:could unified donor pressurehave elicited governmentagreementto a regional shift in the government'sbudget expenditures,or evenjust in the allocationof aid funds?The recorddoes show that donor resources,when focused on some specific policies, were important enoughto move thosepolicies in directionsthe authoritieswere reluctantto take otherwise.Evaluationof the policy-changeeffectivenessof American balanceof paymentsassistance,the so-calledprogramloans that providedgeneral,or nonproject,financial aid, found a closerelationshipbetween aid availability andgovernmentpolicy changes. The mostimmediatetestof programloan leverageoughtto be GOP[Governmentof Pakistan]performancein import liberalization(and industrial decontrol)-thepolicy areaof highestU.S. priority. Hereperformancehas been spotty. Considerableprogressbefore the [India-Pakistan]war was wiped out by renewedrestrictionsin the year following it (1966). This groundwas regained,however,and therehasbeena further move toward relaxationinFY [fiscal year] 1968.To a largeextent,however,the variable behavior reflected the GOP'sexpectationsof the availability of foreign exchange,an indicationthat both progressandretrogressionwereasmuch the resultof A.I.D.'s willingnessto finance import liberalizationas it was of leverage.9 Though my what-if scenarioleading to conflict avoidancecan be only speculativein retrospect,taking the geographicandotherfactorsof Pakistan into account,it is noteworthythat the formal World Bank history, andone of the principal architectsof the advisory role, sums up the experienceas a regrettablelost opportunity.Betweenadvice,donor pressure,and aid reallocation, different donor actionsmight plausibly have resultedin a different, and better,outcome.

Rwanda: Donor Culpability There is little doubt that the "internationalcommunity," that is, mainly the United Nations, Belgium, France, and the United States,could have preventedthe genocidein Rwandain April-June of 1994.The U.N. peacekeeping force had hard and unequivocalevidencethat a massacrewas about to take place.In the critical days when additional modestforces, authorizedto take the necessaryactions,would havebeensufficient to preventthe bloodshed,the appealof the force'scommanderfor suchan increasewasrejectedby the U.N. Security Council. The public record on this eleventh-hourfailure is voluminous.to PresidentBill Clinton later concededthat American failure to

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act was a grievouserror. Out of a populationof 7.5 million, about 800,000 Rwandanswere slaughtered.Some85 percentof the RwandanTutsi population were murdered,a clearcaseof genocide.Over 2 million Rwandansfled to neighboringcountries. The massacreof the Tutsi minority, along with a relatively small number of Hutu who were supportingthe policy of accommodationbeingnegotiated under international auspices,appearedto erupt very suddenly.The World Bank noted in 1998: "Although there were 'warning signs' from 1992 to early 1994 that extremistelementswere intensifying hate propagandaand laying plans for genocidalattacks,the calamity of April to July caughtthe internationalcommunity by surprise.,,11In the first weeks of the genocide force the U.N. SecurityCouncil actuallyreducedthe sizeof the peacekeeping to a nominal 270 members.The SecurityCouncil reverseditself in mid-May 1994, but by the time (end of July) full agreementhad beenreachedto expandthe force (by 5,500)the genocidewas alreadyaccomplished,haltedby the assumptionof powerby theTutsi exile force thathadinvadedfrom Uganda beginningin 1990. The underlyingcausesandpotentialitieswereevidentfor many yearseven before the appearanceof the "warning signs." In the last few yearsof Belgian rule prior to independence in 1962,a Hutu movementhad risen against the colonial power and againstthe traditional Tutsi kingship through which Belgium had ruled. Tens of thousandsof Tutsi were killed and fled as a Hutu-basedparty took power. The next yeara secondwave of refugeesfled when moreTutsi were killed in responseto attacksby Tutsi exiles. In 19721973, to deflect discontentwith the currentregime,the governmentstrictly implementedquotapolicies that had beenon the books,throwing thousands of Tutsi studentsout of schoolsand adults out of jobs. As is the casewith all calamitiesof this scope,"There are no simple answers.The truth is that the presentcan be explainedonly as a product of a long and conflict-ridden process,in which many factors contribute to the total picture.,,12The widespreadparticipationof the Hutu populationin the successiveslaughtershasbeenseenby manyobserversasreflectingthe prejudicial and racist characterof the conceptionsboth groupshad of eachother, dating back to earlier Tutsi conquestand colonial Belgium's exaggeration and manipulationof TutsilHutu ethnic difference.13 While elite manipulation of ethnic hatredwas undeniablysignificant in preparingthe groundfor the wavesof violence,the elites "were harnessingreal social forces,embedded in the structureof the society, and in the perceptionsof many of its members."14 Unfavorableeconomicfactors are also creditedwith having contributed to the potentialities forviolent conflict. The World Bank'sevaluationof its

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experiencein Rwandanotedthe estimatesof oneeconomistthat relatedlongterm populationpressureon the land, declining yields, and droughtandconflict-related displacement,to severeundernourishmentof nearly half the population in 1994. "[Jef] Maton suggeststhat large numbersof the rural populationwere susceptibleto hate propagandaunderthe duressthey were facing in 1993 and 1994. [Gerhard] Prunier, while giving somecredenceto populationpressures,does not give this factor dominant weight." Grim as it may seem,the genocidalviolenceof the spring of 1994can be partly attributedto that populationdensity.Thedecisionto kill wasof course madeby the politicians,for political reasons.But at leastpart of the reason it was carriedout so thoroughly by the rank-and-filepeasants... was the feeling that therewere too many peopleon too little land, and that with a few less there would be more for the survivors. But greedwas not the main motivation. It was belief and obediencebelief in a deeply imbibed ideology which justified in advancewhat you were aboutto do, and obedienceboth to the political authority of the state andto the social authority ofthe group. Mass-killerstend to be menof the herd, and Rwandawas no exception.ls What wasthe relationshipbetweenRwandaandtheWorld Bank andother donors during the three decadesof independence preceding the genocide? The donorsprovidedsubstantialeconomicandtechnicalassistance;how did this aid affect the predispositionsof the elites, and the underlying problems that preparedthe ground for the genocide?Given the importanceof the Rwandantragedy, and the illustrations it provides of interactionsbetween aid activities and conflict-relevanteconomicand social problems,it is worth drawing at length on theWorld Bank itself, specifically the above-citedcritical evaluation. It is clear that the donorshad ample opportunity to learn the facts. Quite apartfrom the ordinary reportingthat the variousembassiesin Rwandamust have beensendingback to their governments,the World Bank begansending missionsand issuing economicreportssix yearsbefore Rwandanindependence.Startingwith a highwayprojectin 1970,the World Bank undertook forty-eight operationsprior to the genocide.Theseoperationscovereda wide range of Rwandaneconomic and social activity including physical infrastructure,agricultureand rural development,education,health,family planning, urbaninstitutions,public enterprisereform, private-sectordevelopment, and generalfinancial supportfor structuraladjustment.16 Although the fullscalewar beganin 1990with the Tutsi exile invasion,the World Bank (along with the otherdonors)continuedwith an "active portfolio" up to the beginning of the genocide.

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In fact, the portfolio was expanded by eight investmentoperationsand an adjustmentoperationbetweenNovember1990and November1993.The most significantof theseoperationswas the StructuralAdjustmentCredit (SAC) for US$90million, approvedin June1991.... In responseto mounting pressureson both the tradeaccountandfiscal budget,causedin partby the collapseof coffeeprices,the GOR [Governmentof Rwanda]had initiateddiscussionswith the Bankandthe Fundin 1990that led to the SAC as well as accessto a IMF StructuralAdjustmentFacility (SAF). The Structural AdjustmentProgram,of which the SAC was a component,calledfor a wide rangeof policy reformsunderthreeheadings:macroeconomicstabilization andimprovedinternationalcompetitiveness; reductionof therole of the statein the economy;and protectionof the vulnerablewith a social safetynet. Civil servicereform was also a condition.17 In the event, the SAC was suspendedfollowing the first tranche(partial releaseof funds) after the governmentfailed to meet the budget,civil service, and price subsidyconditions.Most donors,including the World Bank, terminatedtheir programsafter the genocidebegan. The donors' continuedsupportof the Rwandaneconomyand its development programscan be criticized on severalcounts.First, in the face of a long history of Hutu-Tutsi animosity, and despitethe unabashedHutu agendaof hegemonicreversal,civil war, and pogroms,the donors undertookto support Rwandaneconomicdevelopmentin a vacuum,so to speak.Their supportwas not madeconditionalon any changesrespectinginternal"political" issues.They acted,in effect, as if the aid projectswere ethnically neutral,existing within a separatedevelopmentalsphere.By applyingcriteriapertainingonly to this separatesphere,thedonorswereableto judgeRwanda'sperformanceasoutstanding. Substantialsupportfrom the multilateral and bilateral donor community contributedto, and was attractedby, Rwanda'sprogressand policies.The countrydrew internationalattentionowing to its low rural-to-urbanmigration rate,its soundmacroeconomicpolicies,andthe active involvementof governmentandcivil societyin antierosionandreforestationactivitiesand healthand educationservices.Official developmentassistance(aDA) to Rwandagrew rapidly, from an annuallevel of$35 million between1971 and 1974 to $343 million between1990and 1993, the latter figure representing about$50 per capitaand almost25 percentof GNP, and exceedingthe subSaharanAfrica averagesof $35.7 ... and 11.5 percent,respectively.IS The fact that the low urban migration was viewed favorably is striking under today'sinternationalhumanrights sensitivities.The evaluationnotes that the low rate was "in part the result of heavy restrictionson mobility and strict enforcementmadepossibleby complexand highly organizedgovem-

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mentaladministrativestructuresright down to small local 'hill' units." There are further ironies in this observation.The World Bank was so impressed with the local administrativesystemand the lessonsit might hold for other countriesin Africa that it commissioneda detailedfield study. Not only did the authorsof the study avoid any mention of Hutu or Tutsi, feeling constrainedby Bank practiceto eschew(published)commenton client country politics, but this very administrativestructureplayedan importantrole in the orchestrationof the 1994 massacres. The World Bank'ssilenceon the government'sregressivepolicies apparently extendedto all its formal documentation.If informal internal reports did cover thesepolicies, there is little evidencethey had any effect on the Bank's programs. Thefirst andmostsweepingcriticism leveledat the Bankandotherdonors is that they ignoredthe signsof growing ethnictensionsand unravelingof the political frameworkin the 1980s.If they were awareof growing problems,their documentsshowedno indicationof suchawareness, andin any event,no consequentactionswere takenin policy dialoguewith the governmentor with regardto their portfolios. The most explicit critic in this respectis PeterUvin .... Citing nine Bank documents... , Uvin finds frequent referencesto Rwanda'sputative "prudent, sound management, concernfor its rural population,political stability," and even"the cultural and social cohesionof its people"and "the ethnic and socioeconomichomogeneityof the country." But he finds no referencesto such issuesas "state-sponsoredracism; authoritariangovernmentand condescending

extension;a festeringrefugeeproblem;and social,ethnic andregional inequality."19 The evaluationitself revieweda further twenty Bank documents(suchas project appraisaland completionreports,and economicreviews) and found similar anomalies.A poverty assessment made no mention of "ethnic fissuresor relatedexclusionaryandpredatorypoliciesand practices."This anodyne treatmentwas not limited to the World Bank. According to Uvin, "no aid agencyever denouncedthe official racism or the quota systemor the ethnicIDs-not evenin the 1990s,when it wasclearthey werebeing usedto preparefor masskillings.,,2o Second,by ignoring divisive aspectsof aid-supportedactivities,or giving them insufficient weight, donors(perhaps,if given the benefit of the doubt, inadvertently)could actually finance the execution of inequities, thereby exacerbating ethnic relationships.The experienceof one project showshow the conservativeinterpretation(by its legal counseland its governingboard) of the World Bank's governingArticles of Agreement,stipulating political

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noninterference,could lead the institution to ignore ethnic inequitiesand to continueto supportactivities that were contributingto the overall patternof discrimination.In one agricultural developmentproject, despiteevidencethatTutsi andHima pastoralistswerebeingdiscriminated againstin favor of Hutus, and in spite of opportunisticbehaviorresulting in the "hijacking" of project resourcesby project managersand staff, the Bank favored the effort with a secondproject.Looking back,it is hard to justify theBank'sgoing aheadwith a "repeaterproject."Therationalegiven at the time was that the first project had "establisheda dialoguebetween the Bank and the Government."Instead,the secondMutara project rewardeda patternof opportunisticbehaviorand discriminatory practices that by the early 1990shadbecomemuchmorepervasive,a patternthat by that time, severalBank staff interviewedfor this studyindicatedthey were well awareOf.21 Third, the aid flows provideda major increasein the total resourcesavailable to the Rwandangovernmentfor pursuingits overall agenda,including the programsthat were affecting the relative positionsof the Hutu and Tutsi as a whole. The donors ignored the fact that, almost invariably, aid to and through a governmentaids the incumbentgroup. Admittedly, establishing direct connectionsbetweenpoliticized allocationandthe resourcesprovided in the general,financial form of budget or balanceof paymentssupport, under structural adjustmentcredits, is inherently moredifficult than in the caseof specific projects like the Mutara. (We will return to the subjectof structuraladjustmentand conflict below.) The searchby somecritics for a SAC (StructuralAdjustmentCredit) smoking gun, besides beingquestionable in someof its allegations,22missedthe point that sheerfinance, as provided undergeneralsupportloans,is the mostfungible form of development assistance.(That is, budgetsupportprovided for generaladministration,or even preapprovedessentialexpenditures,frees up an equivalentamountof other governmentrevenuesnot bound with the samerestrictions as SAC funds.) In the Rwandancase,the impact of the SAC is unclear.Someofthe economicpolicy changesit called for that might have increasedpolitical instability were nevercarriedout, and the credit was cancelledin 1992 after only partial disbursement. The largerquestionis this: If the donorshadadoptedan early tough stand againstthe discriminatoryanddivisive policies,could the outcomehavebeen substantiallybetter?Could the genocidehave been avoided by deflecting the whole courseof root-causeevents?Or to put the questionin its most invidious form: Did the totality of the long flow of donorresourcesenhance the ability of the Hutu extremistelite to call forth the genocide?

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By 1993, economicaid no longer had preventionleverage.In fact, the focus wason diplomatic pressuresthat appearedto be bearingfruit. Rwanda had signedon to the ArushaAccordsthat called for power-sharingbetween the governmentand the Tutsi party. The World Bank evenconveneda meeting with both sides"to discussan economicframework. This meeting was viewed as positive on all sidesand Bank staff concludedthe meetingwith a senseof optimism." In any event,nothing cameof thesediscussions,as the situation deterioratedrapidly in early 1994. In responseto the questionof the possibleefficacy of much earlierleverage,the Bank'sevaluationmakes interesting observationsbut does not attempt to layout any alternative scenarios. When might a "lesseroption," such as a coordinatedwithdrawal of economic assistance,havehad an impact?This may havebeenas much as a decadeor two earlier, before Rutu extremismbecameentrenched.This posesa dilemma:while the leverageof the donorcommunityis likely to be greatersometime beforethe cuspof disasteris reached,the evidenceof predationandextremismwill also likely be weakerand therefore,international supportfor interventionist approaches less.Thereis alsotherisk that a coordinatedwithdrawal of aid could increasestate-imposedrepression and violenceagainstits citizens.While sucha risk cannotbe ignored,the fact that donorsin very low-incomecountries,suchas Rwanda,typically provide resourcesequivalentto a major shareof the government'sbudget meansthey do (or could) exerciseconsiderableleverage.23 Aid cancellationis a drastic action that we return to in the final chapter. While there might be caseswhere one could argue that donor withdrawal .would havea perverseeffect, Rwandaseemsan unlikely candidate.Despite the presenceof a substantialaid programovera long period,Rwandaplunged into a paroxysmof state-imposedviolence of the most extremeform conceivable. If aid had been cancelledas a form of preconflict pressure,the effectson the population'swelfare could hardly havebeenworsethan what actually occurred.Many donorshavetakena different approachin countries with governmentsthat areindifferentto, or ineffectivein, attackingpoverty,but not so egregiousin their behaviorasto promptdonorsanctions.Instead,donors will bypassgovernment,channelingtheir aid to local civil society(i.e., nongovernmentalorganizations).Unfortunately, as Rwandaillustrated, civil society may be co-optedby the sameauthoritiesthe donorsare trying to avoid.24 PeterUvin, whosestudy (1998) of aid and the Rwandangenocideis the mostcloselyarguedyet publishedto my knowledge,judgesthe effectsof the sustainedaid more harshly than doesthe World Bank evaluation.Uvin describesat length the inequalities,injustices,and deprivationsthe peopleof

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Rwandahad suffered throughouttheir modem history. To capturethe fact that theseills were imbeddedin the social systemand political cultures,and were unremitting, he adoptsthe term "structural violence." He sees structural violence, experiencedby the Hutu majority, as an explanationof the responseof ordinaryadolescents, farmers,andwomento the extremists'calls for massphysical violence. For the largemassof poor Rwandans,life was characterizedby a constant reductionof life chancesand increaseof socioeconomicvulnerability; the absenceof opportunitiesto acquire information and education;oppressive, authoritarian,and condescending treatmentby the developmentsystem; growing social,ethnic,andregionalinequality;anda history of impunity, corruption, and abuseof power by local and national elites, often committedin the nameof development.... I identify this conditionasone of "structuralviolence,"thus drawing attentionto the fact that suchstructuresand processesare violent becausethey needlesslyand brutally limit people'sphysical and psychologicalcapacities.... [Structural violence) createsanger,resentment,and frustration,which contributeto the erosion of social capital and normsin society.A populationthat is cynical, angry, andfrustratedis predisposedto scapegoatingandprojection,vulnerableto manipulation,deeply afraid of the future, and desperatefor change.It is this populationthat bought intoracistprejudicein the 1990sand was willing to kill out of fear, anger,resentment,and greed.25 U vin posesthe samefour questionsthat underliethis book. Did aid seek Did aid affect theseprocessesunto halt the structural violence processes? intentionally?Should aid havedonedifferently? Could it have?To the first question, Uvin answersno, which the record appearsto bear out. In responseto the secondquestion,which relatesto the broadissueof the overall impactof a sustainedaid effort, Uvin arguesthat a continuationof aid in the face of abusesis tantamountto an internationallicense, even complicity, since the military and diplomatic supportto the regime by somecountries,as well asthe generalpassivitytowardthe rights abuses,racism,andmilitarization inside the country by the entire internationalcommunity,undoubtedly facilitated if not encouragedthe forcesof genocideto reachtheir final conclusion.The fact thatthedevelopmentbusinesscontinuedasusualwhile government-sponsored humanrights violationswereon therise senta clear signal that the internationalcommunity did not care too much about the racially motivatedand publicly organizedslaughterof citizens.26

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In responseto the third question,should donors have acteddifferently, he concedesthat the internationalcommunity may have (mistakenly) viewed its diplomatic efforts alone as sufficient to promote democratizationand tolerance. Finally, could aid have changedRwanda'scourse?Uvin agreeswith the World Bank evaluationthat exercisingleveragemight have beenfruitless. Even if the Rwandanpresidenthad accededto pressureto reversethe antiTutsi policies, the extremistclique was probably beyondhis control. More importantfrom our perspectivewas the failure, as cited by Uvin, to use aid to attemptearlier to amelioratethe root causes. [B]esidesthe useof negativeconditionality, the internationalcommunity can employ other instrumentsto influence social processesin recipient countries.The developmentaid agenciescould have continuedto assist the Rwandan population towarddevelopmentbut adaptedtheir goals,strategies,andallocationsto the new realitiesandchallengesthe countryfaced. In the 1990s,it seems,thesechallengeswere rapidly becomingthoseof violence,hatred,manipulation,conflict, humanrights abuses,and militarization. New projectscould havebeenstartedto intervenein thesefactors, or existing projectscould havebeenreorientedto take more account of them. This is not necessarilyeasyto do-indeed,thereareno clear-cut, pre-packagedsolutions tothesechallenges-butit was imperativeto try. Facedwith the disintegrationof Rwandesesociety,the developmentcommunity shouldhavetried to rethink its missionand reorientits actions.It did not do SO.27 Uvin himself did not attempt(at leastin the book I am citing) to translate his retrospectivechallengeinto specifics.He believespunitive conditionality should have been tried despiteits uncertainties,especially since business-as-usual signalsindifference.His suggestion,namelythat aid agencies should have sought out, and through their projects, supportedthe "many people" in Rwandawho "preferred harmony over hatred," has merit, and shouldbe takeninto accountby aid programsin all deeplydivided societies. But by Uvin's own account,it would be difficult to constructa persuasive and crediblewhat-if scenariothat could havepreventedRwanda'sconflicts. Nevertheless,if greaterpressurecombinedwith aid activitiesthat awardedonly moderatesand moderationcould haveconstrainedthe extremiststo merely (!) maintaininga societyof structuralviolence,shortof genocide,that would have beena massiveaccomplishment-although unknowable,of course,sincegenocide was viewed as "unthinkable"until the very last momentand would have beenviewed as a low-probability scenariohadit not occurred.

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Sri lAnka: OpportunitiesTaken,and Missed The relationshipsamongdomesticpolicy, developmentaid, and conflict in Sri Lanka are instructive on severalaccountsand worth covering in some detail. In commonwith many ethnicconflicts, therewere multiple causesfor Sri Lanka'scivil war. While the Sinhala-dominatedgovernmentwas ready to suppressan insurgencyin 1971 of unemployedSinhaleseyouth, the major conflict has pitted the governmentagainstTamil insurgentsfighting for secession.The Sri Lankan conflict is a clear casewhere ethnic-mobilization rhetoric gradually crystallizeda deeppolarization that did not rest on historic "primordial" grounds. This [civil war] outcomeis puzzling becauseof the absenceof sustained ethnic conflict prior to the late 1970sand the remarkabledevelopmental recordof Sri Lankaasa modelfor provisionof "basichumanneeds"within the contextof a well institutionalizeddemocraticpolitical systemthat allowed significantopportunitiesfor participationand mediation.... Many on both sidesabhorredthe political projectsof thosewho employedappeals toethnicity or "race" as groundsfor mobilizationand victimization. Therewere islandsof peaceandcooperationevenin strife-tom areas.... As in most"ethnic" conflicts, the stakeswere multidimensional:material advantage,territoriality, cultural validation,andpolitical power.Nevertheless,the conflagrationdid bring into play reciprocalstereotypesandpolitical languageof the sort we commonlyassociatewith ethnicity.28 Although the insurgencybeganwith young Tamils in the Jaffna region, the conflict had roots in long-standingstereotypicalperceptionsand fears aboutrelativeeconomicroles,historic ethnicterritorial "rights," andcultural assertionsandthreats.Accordingto DonaldHorowitz (1985),the Sri Lankan polity failed to copewith theseproblemsthroughthe workings of its parliamentary institutions becauseof its political party and electoral configurations: the partieswereethnicallybasedand the processwas not conduciveto interethnic coalitions. Thus, the establishmentin the 1972 constitution of Sinhalaas the sole official national language(it had beenthe sole language of administrationsince 1961), andthe introductionof a universityquotasystem designedto reduceTamil representation(which hadbeendisproportionately high) in higher educationand in the civil service,had emergedout of the competitionbetweenSinhalesepartiesvying for the Sinhalesevote. By the early 1970s,theseand other measureswere alreadycreatinga senseof injustice in the Tamil community,especiallyin the Jaffnaareainhabitedby the centuries-oldCeylonTamil community(the inhabitantsin the other,eastern, areaof Tamil concentrationwere the so-calledIndian Tamils, of more

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recentcolonial immigration as labor for the tea plantations),and especially amongthe laffna Tamil youth, who reactedwith militancy.29In this context, the flood of foreign aid after 1977 sanctioned,or at leasttolerated,the state's programs,and provided the financial meansfor the governmentto conduct policies that deepenedthe society'sdivisions. Thesepolicies had several dimensions:investmentlocation, beneficiary selection,exposureof previously protectedproducersto freed-up prices and liberalized imports, and ethnonationalistsymbolism. According to Ronald Herring, the enablingrole of donor finance played out as follows. Developmentstrategywas the key issuein the Sri Lankan electionsof 1977.The victory of the United National Party (UNP) launched a reversal,from the previoushighly regulated,welfarist, inward-lookingstrategy to a market-oriented,liberalizing,trade-enhancing strategythat alsopromised more evenhanded,lesscorrupt governance.Armed with the blessingof the IMF for its economicreform program,the UNP obtaineddonorendorsementanda sharpincreasein externalassistanceto help financean expanded programof public-sectorinvestment.Aid enabledthe governmentto embark on a massivepublic works programto (amongother things) generateemployment, financing about 70 percentof the net governmentbudgetdeficit by 1980. Major piecesof the investmentprogramwere implementedin a mannerthat discriminatedagainstthe Tamil minority (about 18 percentof the population)and blatantly celebratedSinhalaethnonationalism.In addition, someSinhalaintellectualsand politicians interpretedthe effectsof the macroeconomicliberalizationmeasuresas heavily weightedagainstSinhala economicinterests,which werealready,accordingto this view, subordinated to Tamil dominationin severalsectors-aview thatjustified a call for ethnically basedcorrectivepolicies, and that comprisedone explanationfor the anti-Tamil riots of 1983 in Colombo,Sri Lanka'scapital. Herring arguesthat the liberalization program exacerbatedinterethnic hostilities. (While this should standto sensitizedonors to the needfor assessingthe conflict implications of liberalization programs-wereturn to such implications of liberalization and structural adjustmentprogramsbelow-his argumentis subtle and appearsto lack the concretenessof the project-leveleffectsin Sri Lankathat I will describemomentarily.)Although therewere commonperceptionsamongthe Sinhalesethat Tamils dominated public-sectoremployment,bank credit, real estate,and the private sector generally,the realities of ethnic representationin economicareaswere apparently unclear.There were comparableperceptionsthat the liberalization policies causedmore dislocationto Sinhaleseworkers and business.There wasalsoa groupof monkswho sawliberalizationas"a westernizingproject which threatenedthe cultural identity of the SinhaleseBuddhist commu-

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nity.,,30 The tax and food ration and subsidy reforms increasedincome inequality and seriouslyaffectedthe incomeand nutritional statusof the very poor. The absenceof any streetresponse,any "IMF riot," was only partially explainedby the offsetting expansionof the economy,leading to a theory that the reactionhad beendisplacedinto ethnic resentment. According to Herring, Sinhala frustration over real wage cuts was divertedinto ethnic hostilitysufficient to causeterror amongthe Tamil and to make ethnic compromiseuntenable."The •open' economy provided both symbolic materials and exacerbationof real cleavagesto facilitate scapegoating,"Herring noted.Ethnic lines hardened,overcomingthe earlier intraethnicdivisions betweenhawks and doves.Herring points out that the liberalizationprogramclearly hurt Tamil agriculturein the Jaffnaregion, yet no coalition of Tamils and Sinhaleseinjured by liberalization was possible given the Tamil conviction that the Sinhalesewere capturingall the benefits of developmentprojects. At the heart of the argumentis the distinction betweennecessaryand sufficient causes.The aid flows are seento havebeenenabling,not co-conspiratorialor alignedby intent with the political programof the government. Political escalationof ethnicconflict wasnot causedby foreign aid or structural adjustment.Indeed. officialrepressionwascriticized by the development community. But criticism did not precludecontinuedinternational supportfor the government.Given the dependence of the governmentand its economicmiracleon foreign resourceflows, externaldemandsfor reconciliationmustcertainlyhavehadmorepotentialpurchasethanwasrealized; it is doubtful that the regime couldhavecontinuedhadit beenabandonedby the developmentcommunity.But collectiveactionamongdonor nationswas impededby intra-governmentalconflict over aid objectives, commercialinterestsof donorsandcoordinationproblems.Moreover,the targeteconomywas growing.31 The debatewithin the Canadiangovernmentbetweenthosecritical of Sri Lanka'shumanrights violations and the UNP government'sunwillingness to moderate,and thosecalling for separatingdevelopmentaid from foreign policy (and not wanting to disturb Canadianbusinessinterestswith large aid-fundedcontractsin Sri Lanka), finally resultedin Canada'swithdrawal from the massiveMahaweli River irrigation project.By the time of the withdrawal, however, the large reservoir componentthat Canadahad been financing was virtually completed.The United Statesattemptedto offset its continuingparticipationin Mahaweli (from which a Jaffnacomponentcanal hadbeendroppedby the government)by funding an urbanwaterand sewer project in the Jaffnaarea.32

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The national aid-assistedhousingprogramis worth citing as a clearcase of ethnic exclusionand resentment.The programhad met with divided donor response.The World Bank and InternationalMonetary Fund opposed the schemeas a low-priority diversionof investmentfunds, a commonview of housingin the developmentcommunity.USAID favoredthe project,however, and provided substantialfunding indirectly through its housingguaranteefacility, an authority underwhich USAID facilitatesthe flow of private moneyfrom Americansavingsandloaninstitutions.Onevillage studyshowed how the program'srhetoric celebratedSinhalanationalismandhow the allocation of new housesrewardedUNP supporters.33 The USAID office in Colombowas awareof the program'spoliticization at the village level. The USAID housingoffice in Washingtonsaw U.S. involvementas an opportunity to improve a large Sri Lankanprogram,both technicallyand by reducing the size of the interest subsidy. In any event, USAID/Colombo's reservationsdid not reduceU.S. supportto the housingprogram. I tum now to the history of two irrigation projects in Sri Lanka, which provide striking examplesof aid agencyrelevanceto the courseof ethnic conflict. Oneprojectimprovedthe relationshipsbetweenSinhaleseandTamil farmersliving in oneirrigation systemarea,turning hostility, separation,and interestconflict into friendship and voluntary promotion of mutual interest. The secondwas a much vasterproject in which the aid agenciesmissedan opportunity (or, more precisely,failed to persistin an attempt)to pressure the authoritiesto include ratherthan (deliberately!)excludeTamil farmers. The two examplesillustrate aid agencyrelevanceoperatingthrough the interaction of project- or local-level activities with national-levelpolicy and conflict. In the first, USAID supporteda projectbeginningin 1980to rehabilitate the Gal Oya river irrigation systemin the southeasternpart of the country. Gal Oya hadbeenbuilt between1948 and 1952,financedentirely by the Sri Lankangovernmentwithout any foreign aid participation.It servedroughly 34 The project had deteriorated 12,500farmers cultivating 40,000 hectares. over the years.The populationin the project areahad risen, channelswere silted up, 80 percentof the outlet gatesand otherstructureswere inoperable, and the system'smanagementwas haphazardand characterizedby hostile relations with the farmers. Most telling, the systemdelivered insufficient water for dry-seasoncultivation. The lower third of the system-the"tailend" farmers-seldomreceivedirrigation water and had to rely entirely on rainfall. The scarcityof watercausedconflicts amongfarmers.The upstream areashad been settledby Sinhalesefarmers, while the tail-end allotments had beengiven to Tamil settlers."When waterdid not reachthe tail, Tamils could attribute this to maliciousnessof Sinhalesesettlersupstreamrather

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than to geographicfactors. The minority's senseof grievancewas not allayed by the fact that a majority of Irrigation Departmentengineerswere Tamil.,,35 The institution-buildingpart of the Gal Oya project coveredthe left bank of the system,and is unusuallyinterestingon severalcounts.It was an outstandingcaseof a foreign aid success.While the implementationof the project was complex,and had its ups and downs,it turnedan irrigation schemethat had beenan economicand social disasterinto a productiveand harmonious agricultural complex. In Norman Uphoff's account,substantialcredit goes to the farmers themselveswho respondedto the "social engineering"and organizingactivitiesdesigned,andcontinually adapted,by the externaltechnical assistanceprofessionalsand their dedicatedlocal implementers.The Gal Oya experienceis well known for its "participatory"characterand techniques.It also had a striking positive impact on ethnic relations. When the Gal Oya rehabilitationprojectbegan,interethnicconflict in Sri Lanka was still at a low level of intensity. It had beendevelopingever since the mid-1950sin responseto ethnonationalistlanguage,employment,and otherpoliciesintroducedby Sinhalesedominatedgovernments.Violent protest tacticswereemployedboth by Tamil andSinhaleseextremists,the latter objectingduring the periodswhen governmentpolicy, in their view, was too accommodative.Widespreadriots in 1983 escalatedthe conflict to an outright civil war that has killed over 50,000Sri Lankans. The Tamil minority comprisesabout 18 percentof Sri Lanka's population. In the left bank project area the Tamils were 30 to 40 percent.Soon after the project got under way, the social engineeringdesignedwith the of Cornell University advisorschangedthe farmers'behaviorfrom assistance a patternof noncooperationand (often hostile) competitionover the critical componentof any irrigation project-distributionof the availablewater-to one of cooperation.One pre-projectsurvey had found farmer behaviorthe main weaknessof Gal Oya; therewereinstancesof "watertheft, lack of field channelmaintenance,staggeredplanting [insteadof simultaneous,to make bestuseof water providedto specific areasof the systemat specific times], breaking[watercontrol] gates,cutting bundsto get waterdirectly from larger channels."36(There were also serious weaknessesin the Irrigation Department'smanagementof the system.)Within a few weeksinto project implementation,theseuncooperativeand contentiousfarmerswerecleaning their irrigation channelsand rotating waterdeliveriesso that all would get a fair shareof that scarceresource,with some groups even saving water to sendto downstreamfarmers.37 Most surprising,and the most interestingfeatureof the project from the perspectiveof conflict prevention,was the willingness of head-endSinha-

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lesefarmersto voluntarily reducetheir water offtake in order to sendmore water to Tamil farmers at the tail end. The Sinhalesefarmers' satisfaction with the rehabilitation project and the cooperativerelationshipsdeveloped to improvesystemself-governance by the farmersat the bottom,so to speak, were sustainedwhen the general interethnic conflict eruptedin the region where the project was located. Sinhalesefarmers protectedTamil project staff and farmers who would have been at risk otherwisefrom attacks of extremists.38 This was a remarkableoutcome,consideringthat the areahad seen violent ethnic conflict in 1957, 1977, and 1981, during which Tamil homeswere burned,whereasthe groups were now engagedin cooperative water distribution and channelcleaning. NormanUphoff attributesthe changein Sinhalesefarmers'behaviorto a combinationof self-interest andaltruism. One aspectof self-interestconcernedreputation:in meetingswith large numbersof neighbors,a head-end farmer could not afford to appearselfish by refusingto participatein a more equitabledistribution of water to tail-enders.Uphoff ascribesthe power of the project to bring about such changesto the interpersonalorganizational arrangements(carried out by young fieldworkers called institutional organizers) that creatednew "behavioralsettings." Uphoff notes:"When institutional organizersenteredGal Oya communities, they were proponentsof cooperativeaction, suggestingthat groupsget togetherto tackle whateverproblemsthey could not resolveby individual effort, and particularly endorsing... campaignsof voluntary collective labor. They also encouragedsharing water equitably to help tail-enderswho would otherwisenot be able to cultivate a crop and maintain themselves. The result was to shift farmer behaviorfrom selfish individualism to otherregardingcooperationin a matterof weeks."39 Yearsafter the formal end of Cornell University'sinvolvement,the organizing and motivating institutional arrangementsare still functioning. During the severedry seasonof 1997,watersuppliesweresufficient,if distributed at normal coveragevolumes,to irrigate only a small percentageof the left bankarea.Nevertheless,farmerscontinuedto sharethe availablewater, and improvedcultivation methodsenabledthemto cultivate a good crop despite usingminimal quantitiesof water.By 1997theTamil Tiger militants' control had penetratedto an areainside the Gal Oya project area.Despiteefforts by the militants to intimidate the Tamil farmersinto withdrawing,the cooperation arrangements betweentheSinhaleseandTamil farmersremainedstrong.4O I neednot repeatherein any detail the extensivetreatmentUphoff gives to the questionsof motivation and social change.Someof what worked in Gal Oya may havebeenspecific to Sri Lankanconditions.(The systemwas not uniqueto Gal Oya conditions;it was replicatedin someotherareasin Sri

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Lanka, but not in the Mahaweli project I tum to next.) However, the emergenceof cooperant(economically relevant) behavior,not underminedby any significant "free riding" selfishness(contrary to what the "collective action" literature would expect), has been observedin other countries as well.41 In any case,in the contextof conflict prevention,the experiencesuggestssomeimportantlessons. First, it demonstratedthe feasibility of inducinga changefrom hostileand noninteractiverelationsto altruistic and cooperativerelationsbetweensets of peopleof different ethnicity, who live or work within a potentially integrated context, even in a country where violence generally already marks the overall relationshipbetweentheseethnic groups. Second,it shows that economicinterests,combinedwith deliberateefforts to promoteharmonyand strengthenaltruistic potentialitiesat the individual andcommunitylevels,candevelopsaliencestrongenoughto override appeals,perhapseven pressures,for a reversionto ethnicity-basedhostility and noncooperation. Third, the essenceof that economicinterest was reduction in disparity, betweenfarmers who had water and thosewho had beenexcluded. Fourth,therewas no trade-offbetween(interethnic)equity andefficiency: the less intensive water use by the head-endSinhalesefarmers was agronomically superiorto their precooperationwatermonopolization.It is worth noting that the technical assistancethat producedtheseresults cost only 3 percentof the total USAID investmentin Gal Oya. One must also draw the realistic conclusionthat isolatedcasesof conflict avoidanceand ethnic harmony promotion, even if robust enoughto withstandpressuresfrom surroundingantagonistsaimed at disrupting such oases, are not likely to be sufficient in themselvesto induce the antagonists operatingon the large outsidestageof the nation as a whole to movetoward accommodationand resolution.Scaleis important.Can developmentassistance programsin a conflicted country undertakeenoughprojects,enough activities as a whole, involving sufficient numbersof peopleand potentially cooperativeactivities, and perhapscomplementingdiplomatic and nonofficial (so-calledtrack two) mediationefforts, to tum the scales? Sri Lanka also providesan exampleof a missedopportunity that might havebeenof sucha critical scale.The exampleis a secondirrigation scheme, the Mahaweli.Planningfor this large-scaleirrigation andhydropowerproject on the Mahaweli River beganin 1958. In the mid-1960s,a masterplan was drawn up with assistancefrom the U.N. DevelopmentProgramme(UNDP) and Food and Agriculture Organization(FAO). The World Bank provided the first donor funding for construction,starting in 1970.42 Mahaweli is a massiveproject comparedwith Gal Oya. It was to be developedover 30

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years,and was to include 15 reservoirs,500 megawattsof hydrostationcapacity, and irrigation for 365,000hectares,nine times the cultivatedareaof Gal Oya. The costsof the schemeamountedto a significant fraction of all public-sectorinvestmentand recurrentcost expenditures,contributing importantly to Sri Lanka'slengthy inflation. In 1977the Jayawardene governmentlaunchedtheAcceleratedMahaweli DevelopmentProgram(AMDP) designedto speedup the project and to mobilize donor support,which was then forthcoming to supporta government apparentlybent on economicreform and ethnic accommodation.As describedby a World Bank evaluationin 1998,the programhad "major implications" for Sri Lankan ethnic politics. There were two issues-which geographicareaswere to receive irrigation, and who would be settled in theseareas.Tamil leadershipcomplainedthat the Tamil areasof the north had beendroppedfrom the original scheme.As the new configuration was being debatedin the early 1980s,the USAID missionurgedthe inclusion of distribution to the northernTamil region. The governmentheld its ground.It cited cost and geographicfactors to explain the change;a proposalput forgovernward by the PermanentSecretaryof Agriculture in the Jayawardene ment for an alternativemethodof moving Mahaweli water to the north was not adopted. The questionof who would be settledin the new areasthat were to be irrigated arosebecausethe largestof theseareaswas contiguouswith a region that had beenlong settledby Tamils. The Tamil leadershipproposed settlementin proportion to eachethnic group'spercentageof the country's population. Under pressurefrom unemployedSinhalese,the government rejectedthis proposal, makingconcessionsto Tamil settlementonly later, in 1986, three yearsafter the outbreakof high-intensityconflict. In effect, the project transferredSinhalesesettlersinto areasthe Tamils had long consideredas their own. The Tamils viewed the policy in ethnic terms as designed to establisha strong Sinhalesepresencein traditionally Tamil areas.The policy servedto "underminea rightful senseof political and economicsecurity on the part of the Tamils andthusfurther alienatethe Tamils from the Sri Lankan government."43The policy clearly contravenedthe pacts that had beenmadeby the Sinhaleseand Tamil leadershipin 1957 and 1965 to protect Tamil interestswith respectto colonization.As the World Bank noted, thesevirtually exclusionarypolicies "reinforcedTamil perceptionsthat the [government] was exclusively interestedin the developmentof Sinhalese majority areas.,,44 The perceptionthat Mahaweli was a major demonstrationof Sinhalese hegemonicintentions was reinforced by the ethnonationalistrhetoric the Jayawardeneadministrationemployedwhen referring to the project. David

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Little statedthat "it is hardto deny thatthe Jayawardene administrationitself did make somethingof the 'golden threads'that were supposedto connect contemporaryirrigation and colonization projects with those of ancient Sinhalakings.... In justifying its irrigation policies, it is likely the government could have contributedto improved ethnic relationsby concentrating on economicdevelopmentand by disregardingaltogetherinflammatoryreferencesto pastSinhalaglory.,,45 Consideringwhat Gal Oya was ableto accomplish,and the symbolic and economicimportanceof Mahaweli, it seemsobvious that the latter might havemadea significant contributionto interethnicharmonyand to allaying Tamil fearshadthe authoritiesappliedan approachsimilar to that usedin the former project. As a counterfactualassumption,of course,such a potential effect on Sri Lankan politics can only be conjectural.At the time, however, the donorsdid recognizethis potentiality and proposedto the Mahaweli authority that it adopt the lessonsof Gal Oya. The authority rejectedthe donors' recommendation.Ratherthan applying more severepressure,or using a threat to withdraw their financing, without which Mahaweli would have collapsed,the donorsproceededto supportthe programanyway. Much later, the World Bank evaluationconcludedthat the decision to proceedrepresenteda potentiallysignificantmissedopportunityfor promoting conflict avoidance: If the Bank, along with other donors,hadforcefullyraisedconcernsabout

regional and ethnic balanceand had convincedthe [Sri Lankan government] to appropriatelymodify the "AcceleratedMahaweli Development Program,"it is by no meanscertainthat this alone would haveprevented the full-scale conflict that eruptedin 1983.However,this is not to say that suchconcernsshould not havebeenraisedand beenmadepart of conditionality.4ti

The suggestionthat Tamil inclusion shouldhave beenmadea condition for World Bank and other donor supportof Mahaweli is the most important conclusionfrom this story.As in the East-WestPakistancase,the possibility that the tensionsmight have been mitigated, perhapsrenderedmore amenable to negotiationand nonviolent resolution, remains anuntestablehypothesis.Actually, the hypothesistakes different forms for the two cases. Mahaweli would havebeenan exampleof the multilevel approach,or a componentof what Kevin Avruch (1998) terms the "restricted" conceptof disputeresolution,the conceptthat resolutionrequiressettlementof fundamental issuespervadingthe society. Mahaweli's contribution could have been to createcooperant,interest-basedrelationsamonglarge numbersof nonelite Sinhaleseand Tamil farm families, and to serveas a primary national sym-

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bol of minority inclusion. As a significant offset to factors working in the oppositedirection,Mahaweli might havechangedTamil perceptionsthat the Sinhalesewere unambiguouslybent on hegemonyand exclusion,reciprocally strengtheningSinhalesewillingnessto moderatethe languageandother policies driving Tamil extremism. Or, more precisely, a shared-interest Mahaweli could haveincreasedthe numbersof moderateson both sidesand reducedthe polarizing leverageof the extremists. In contrast,in the Pakistancasethe negotiationgame,or "realist" chess model, could have applied. Artful third-party mediatorscould have facilitated a bargainingprocessthat focused on material interests.The driving grievanceswere those of the Bengali elite. Negotiationsbetweena small number of elite leadersin both wings, involving "stroke of the pen" economic issues(budgetallocation,exchangerate,protectivetariffs), might have satisfiedthe East wing and createdrelationsof trust, which, in turn, might havekept Pakistanwhole. If the civil war had not occurred,the Indian military interventionwould not haveoccurred;thus,two-wing viability alsowould have avoidedone of the major armedconflicts betweenIndia and Pakistan. ~ould havesucceeded We cannotbe confident,of course,that the donorsMahaweli, had they chosento pressharderin the caseof Mahaweli, or to shift their geographicallocationearlierin the caseof Pakistanalong with strongefforts to secureother allocativepolicy changes.Realizingthe potentialitiesof externalinfluencecanbea complexprocess,varyingsubstantiallyfrom onecountry to anotherandfrom onepoint in time to another,anddependingon the political sensitivity of the issuesin question.To put the Sri Lanka casein its proper context,it is importantto notethat theWorld Bank'sefforts to imposemuchless socially intrusive conditionsin the 1960scauseda storm from the parliamentary opposition.The conditionsconcernedcertainprovisionsof a Bankloan for Mahaweli, requiring, for example,that consultantsto be employedhad to be acceptableto the Bank, andthat the Sri Lankangovernmentwould raiseirrigation waterfees. Suchconditionsare standardfor World Bank projects. According to Mason and Asher, the problem arose becausethe World Bank had hadyearsof good relationswith, and had becomeidentified with, onepolitical party (which hadadoptedeconomicpoliciesof which theWorld Bank approved),while having unfavorablerelations with the other.47 As a result, the Bank had swung betweenyears of active lending and years of little activity, depending onwhich party was in power. The oppositionparty at this particular time would probably have opposedWorld Bank loans on any groundsthat could be exploited. The lessonthat shouldbe drawn from this experienceis that the acceptability of loan conditionsdependson the political circumstancesat the time and on the natureof World Bank communicationsand relationswith groups

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inside andoutsidegovernment.The absenceof Bank relationswith political figures outside government,and with political figures who opposedbasic tenetsof the Bank'sdevelopmentphilosophy,was not confinedto Sri Lanka, nor was this self-limitation confinedto the World Bank amongdonor agencies. In this kind of isolation the Bank would have had little influence for conflict preventionevenif it had beenalert to suchdimensionsof its activities. Conditionsin Sri Lanka after the UNP election victory in 1977, however, were more favorable.A more assertiverole on Mahaweli,especiallyas part of a unified donor position on the ethnic problem as a whole, as suggestedby RonaldHerring, might havehelpedameliorateratherthan exacerbateSri Lanka'score political problem. There is an importantqualification to the Mahaweli story. In retrospect, the Mahaweli schemewas not an economicallysoundinvestment.Given the size of domesticand foreign aid resourcesMahaweli absorbed,and the very low returns the project has realized, an ethnic harmony objective-hadit been incorporated,as in our what-if scenario--wouldnot have beensufficient itself to justify undertakingthe program.However,if any Sri Lankan governmentcould have beenpersuadedby a more forceful donor effort to adopt such an objective for this overwhelminglylarge project, it would by presumptionhavebeenopento persuasionto adopt a more accommodating generalpolicy toward the Tamil minority, including more accommodating orientation toward any sets of alternativeprojects with strongereconomic justification.

Yugoslavia:EconomicRightsand IMF Responsibility Given the complexity of Yugoslavia'smodem history, and the interlinked warfareamongBalkan nationalities,different scholars,over time, are likely to weigh differently the causes,decisions,and eventsthat led to the demise of the Yugoslavstateand to the ensuingwars.This is an importantcasefrom our perspectivebecauseit is one where seriousscholarshiphas laid some degreeof responsibility(for conflict beyonda passingriot) on the doorstep of the InternationalMonetaryFund(IMF). To greatly oversimplify, SusanL. Woodward'saccount (1995) cites the loss of certain economic rights the "republics" hadheld underthe highly decentralizedYugoslavsystemas one of the significant motivations behind the secessionsof the Croatian and Slovenianrepublics, which Serb military action then attemptedto reverse (along with the subsequentsecessionof Bosnia).48Theserights had been recentralizedto federal control in accordancewith a stabilization program designedand negotiatedunderIMF leadership.It is worth taking a few extracts from Woodward'saccountto get a senseof the conflict potentialities

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that were inherentin Yugoslavia,and of the destabilizingpowerof reformist changesin economicrights. Woodward describesthe evolution of Yugoslavia as a multiethnic state ("a patchworkquilt of ethnicity") with a highly decentralizedstructure,a systemdesignedto contain its inherentcentrifugal forces by devolving to the republic and local levels a large fraction of the rights and authorities morecommonlyfound at the level of centralgovernment.While eachof the Yugoslavrepublicslay within internal bordersthat had much longerhistorical continuity than, say,the bordersof mostAfrican countriestoday,andhad its own concentratedethnic majority, eachrepublic was also ethnically heterogeneous,containing minorities that in somecasessharedethnicity with the majority in someotherrepublic. Inmany ways, the measuresYugoslavia took to reduceeconomicdisparitiesand to accommodateto its multiethnic compositionwent beyondthoseof Malaysia(our next casecountry). These measuresincluded,amongothers,educationin native languages;statefunding of separatecultural expression;promotion of a nonascriptiveYugoslav identity as an alternativeto the traditional Croat, Serb, and other nationalisms, especiallyattractive to the 14 percentof the (1980) population that were in (or the children of) ethnically mixed marriages;official recognition of a religious group,the Muslims, as a "nation," politically equivalentto the traditional (Slovene, Serb,etc.) "nations"; and an unusualsystemfor demonstratingjudicial evenhandedness, underwhich the authorities"often went out of their way to balancea particular prosecutionwith chargesagainst personsfrom other ethnic groupsin the area.,,49The fiscal systemincluded transfersfrom the richer to the poorerrepublicsand provinces."Decentralization by the early 1970s had led to so much de facto independencethat political life was primarily centeredin the republics."soPerhapsbecauseof this system,elaboratelysensitiveto the need to offset divisive forces, the conflicts took on a religio-ethnic characteronly after the disintegrationhad gone quite far. Tensionsalongethnic, racial,or historical fault lines can lead to civil violence,but to explain the Yugoslav crisis as a result of ethnic hatredis to tum the story upsidedown and begin at its end.51 The real origin of theYugoslavconflict is the disintegrationof governmental authority and the breakdownof a political and civil order. This processoccurredover a prolongedperiod ... , the resultof the politics of transforming asocialist society to a market economyand democracy.A critical elementof this failure was economicdecline,causedlargely by a program intendedto resolve a foreign debt crisis.... Normal political conflicts over economicresourcesbetweencentral and regional governmentsandover the political andeconomicreformsof the debt-repayment

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packagebecameconstitutionalconflicts and then a crisis of the stateitself amongpoliticians who were unwilling to compromise.... [T]he contestantswere governmentleadersfighting to retain or enhancetheir political jurisdictions and public property rights over economicresourceswithin their territories.52 Despitesubstantialwarningof the consequences, Westerngovernments did not interveneto alter the roles and perceptionsthat were feeding the escalatingcyclesof disintegrationand violence;instead,they contributed substantiallyto the drama.53 The oil price shocksof the 1970sand the skyrocketinginterestratesfor foreign borrowing createda severeliquidity and debt crisis for Yugoslavia. The inability of the country'spolitical institutionsto managea coherentresponseturned the economiccrisis into a crisis of governance.Economists, both Yugoslav and foreign, arguedthat the crisis was essentiallypolitical. SuccessiveYugoslavgovernmentsduring the 1990shad failed to adjustto the changingtermsof foreign tradebecauseof too much governmentregulation, political interferencein investmentdecisions,an overvaluedexchangerate that protecteddomesticmanufacturers,and especiallythe political reversalto the market-orientedreformsof the 1960s.... No effective reform [in the economists'view] would occurwithout accompanying political change.By 1983 the leadership... concurredand appointeda party commissionto discussthe political system.The commission'spreliminary proposalsfor amendmentsto the 1974Constitutionenteredpublic debatein 1985. So the entire constitution of the state was open for criticism and revision at the sametime as the systematicshocksof drastic austerity and proposals tocurtail the economicpowers and resourcesof governments ... . The problem ... led to major political quarrelsbetweenthe republics andthe federalgovernmentover the federalbudget,taxation,andjurisdiction over foreign tradeand investment.Expectationsof greatereconomic integrationwere not realized.Instead,the result by the end of the decade was a breakdownin all elementsof the domesticorder, political disintegration,and rising nationalism.54 Into this maelstromsteppedthe IMF and its associatedconsortiumof foreign banksholding Yugoslavdebt.Amidst a generalsocial and political deterioration, the obvious solution was for the central Yugoslav economic authoritiesto recapturethe requisitefinancial controls. While signs of social dislocationand anomiewere growing at the mass level, the restrictive monetary,fiscal, and foreign trade policies also re-

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quireda fundamentalchangein political authorityovereconomicassetsspecifically,over the social propertyrights of governments.In contrastto the extremeterritorial decentralizationof the 1970s,theseemergencypolicies requiredfederal assertionof economicauthority over the republics, leavinglittle room for negotiation.... And, perhapsmostsignificant,control over foreign exchangeoperationsand allocation was returnedto the NationalBank in Belgrade;only five yearsearlier,as part of decentralization, the assetsanddebitsof the balanceof paymentsof this samebankhad beendistributedamongrepublicangovernments,andthey had beengranted correspondingauthority for foreign economicrelations.55

It would take us too far afield to draw out the complexitiesof the disintegration process,the differing interestsof each of the republics, the compounding nature of the struggle over Kosovo's status,or the pulling and hauling among various groups in eachrepublic holding different views on the directions policyshouldtake regardingcentralization,economicliberalization, and pursuit of the IMF reform package.In the event, however,regardlessof how historians may reinterpretthis period, it is clear that the policy packagethe IMF/bank consortium(supportedby many Yugoslav economists)required for helping Yugoslavia cope with its financial crisis was one of the central factors in the secessionof Croatiaand Sloveniaand in the dynamicsof the country'sdisintegration."The primary problem... lay in the lack of recognitionand accommodationfor the socially polarizing and poof this IMF-conditionality program.... litically disintegratingconsequences The architectsof the programsof macroeconomicstabilizationand economic austerityignoredthe necessityof creatingnot only social safety netsbut even more importanta political capacityto recognizeand managetheseconflicts."56 In Woodward'sanalysis,economicreform in socialist transition entails changesthat "fundamentallyalter the existing distribution of rights and power."In Yugoslavia,the program,inter alia, recentralizedmonetarypolicy, strippedexportersof their nonmarketallocationrights overforeign exchange, madethe central bank independentof political influence, and increasedthe effectivenessof the federal governmentover economicmatters."Technocratic" assumptionsled to "a fateful confrontation over the nature of the state." In fact, the economic programand its legitimating rhetoric of free enterpriseand propertyrights encouragedautonomousdemandsby regional or local governmentsand by politicians who could exploit the exclusionary languageof nationalismandits narrowingdefinition of thoseentitledto rights in a time of cutS.57 The Yugoslavcasewas not typical of the countrieswe areconcernedwith here.The former Yugoslaviawas much more advancedeconomically.Both its economicorganizationandits political structurewereunique,evenamong

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the socialist states.Few if any developingnations, even among the large federally structuredcountries,approachits degreeof decentralization.Thus, for a statefailure and a civil war that can be attributedin significant part to an economicreform process,Yugoslaviastandsout as an exceptional,probably unique,case.Nevertheless,it is a powerful illustration of the dangersof approachingeconomicreform in a deeply divided society as a technocratic problem, and of the importanceof understandingthe intricate connections betweeneven single strandsof reform and the distribution of rights among competinggroups.It showshow orthodoxor mainstreamstabilizationmeasures,in the guise of institutional changes,can exacerbatea conflict situation, especiallywherethe lines that demarcatethe assignmentof economic rights coincidewith ethnogeographic fault lines. The fact that the disintegration unfolded over more than a decade,and was the result of the interaction of manyfactors,amongwhich the economicweresalient,suggeststhat early decisionsand interventionsby the internationalplayersdifferent from those actually taken,andmorecarefully calibratedto take accountof Yugoslavia's particularconflict potentialities,might haveproduceda happieroutcomeby having more benigneffects on the noneconomicfactors at play. Yugoslaviaremainedviable as long as its "delicatebalancingact in the internationalarena"andits systemthat "providedgovernmentprotectionsof social and economicequality and of sharedsovereigntyamong its many nations" held together."[T]he cracksin the systemwere not the fault lines betweencivilizations that cametogetherin the Balkans,but thosethat defined the country'sdomesticorder and internationalposition during the socialist period.The country'sinstitutionsof civil order and commonpurpose werethe objectof erosionandattack,anddivision occurredaccordingto the systemof national defense,the concurrentrights and jurisdictions of the political and economicsystem,and social strata."58The viability of other multiethnic countries with relatively short independenthistories in their presentconfigurationsmay also dependon delicatebalancingacts and domestic systemsof allocation of rights, including economicrights, that are often affectedby aid projectsand by aid conditionality and the intellectual influenceof the internationalagencies. Conflicts Contained,Conflicts Avoided: SomeAid Assists

Malaysia: Conflict Preventionas the Political-EconomicCore Malaysiais often cited, and much studied,as perhapsthe world's outstanding caseof successfulmanagementof interethnicrelations,a country where in 1957, ethnicity was long at the core of national politics. At independence

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Malaya, as it was first known, comprisedonly the former peninsularMalay States;in 1963, with the addition of Sarawakand Sabah(and for a brief period Singapore),the name Malaysia was adopted.A Communistinsurgencythe British had beenfighting since 1948hadbeenmarginalizedby the the remainingfew hundredcombatantshaving fled to time of independence, refuge in the jungles of southernThailand.As an anticolonial struggle,this first internal conflict is of interestto us only for an ironic unintendedconsequence.Although virtually all the insurgentswere ethnic Chinese,their efforts to appealto the Chineseplantation and mine workers (to operateas "fish" in a "sea" of sympatheticdiscontents,following Mao Zedong'sfamousdictum for guerrilla warfare)had an oppositeeffect. The British gathered the Chineseworkers into new villages to securethem from insurgent contact.By giving themtenantrights and proof of residenceandcitizenship, the village settlementstrategyamountedto a programfor inclusion, turning large numbersof potentially disaffectedethnic Chineseinto stakeholdersin the new country'ssuccess. The Malayan constitutionalstructurewas basedon a "bargain" between the Malay and Chineseelites,brokeredwith good offices of GreatBritain as the decolonizingpower. Under the bargain,the Chineseaccededto Malay predominancein the armedforces, politics, and the civil service.In return, the Chinesewere grantedcitizenship,civil and political rights, anda guarantee againsteconomic confiscation. Asin Thailand and elsewherein SoutheastAsia, the ethnic Chineseminority was generally wealthier and more urbanizedthan the majority ethnicity, and was predominant(along with expatriate enterprises)in the country's commerce.Except for the Singapore city-statewhere the Chineseformed a large majority, Malaysia was unique in the region in that its ethnic Chineseminority compriseda relatively substantial fraction, roughly one-thirdof the total population,while the "indigenous"Malaysnumbereda baremajority. Many Chinesefamilies in fact had a longerhistory of local residencethan many Malays, whoseforebearswere more recent arrivals from Sumatra.Nevertheless,the Chinesebasedtheir claim to equal citizenshiprights on their residenceand economiccontribution, without contestingthe Malay self-definition as the native "sons of the soil." Ratherthanassertingrival claimsto a mutually exclusivenationalidentity, the two communities(and the much smallerethnic Tamil community) adoptedan overarchingpluralist national identity. Affirmative action, initially not very extensive,was to be employedto improve the relative economic positionof the Malays.Malay wasto becomethe soleofficial language over ten years,but Parliamentmight then extend the use of English as an official language.This was a bargain"steepedin the ethnic division of labor and in the use of time to allay insecuritieson both sides."S9

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The political viability of this bargain was ensuredby the inclusiveand consociationalrelationshipamong the three ethnic elites. Unlike in many other deeply divided polities (including Sri Lanka), the principal ethnicitybasedpolitical partiesformedan electoral Alliance.This arrangementavoided the polarization that would have resultedfrom a systemthat offered rival single-ethnicityalternativesin winner-take-allconstituencies.While the Alliancehaslost control of someimportantsubnationaljurisdictionswith religiously conservativeMalay majorities,the coalition haswon every national election since independence.Thesemultiethnic victories have ensuredethnic representationin every governmentalcabinet. In 1971, in responseto four days of interethnicrioting in May 1969, the governmentlauncheda new economicprogramthat included affirmativeaction policies more far-reachingthan anythingenvisionedat the time of the independence bargain.The rioting hadnot spreadbeyondthe capital (Kuala Lumpur). The official death toll was less than 200; the unofficial toll was severalhundredhigher.Although this wasthe first interethnicviolencesince independencein 1957, and would rank as a mild and isolatedbreakdown comparedwith ethnic violence elsewhere,the Malaysian elites were profoundly shocked.They drew the conclusionthat economicand education policies would haveto be thoroughly revampedto avoid further conflict by changingthe ethnic structureof the country'seconomy.The New Economic Policy (NEP) introducedin 1971,and the adjustmentsand continuitiesover the next threedecades,representprobablythe most thoroughgoingand successful attempt any developingcountry governmenthas made to design a conflict-avoidingdevelopmentstrategy.Though the NEP has included "affirmative action" preferencessimilar to thoseemployedin India, the United Statesand elsewhere,the Malaysianprogramhas aimed at comprehensive structuralchangeunmatchedin scopeby othercountriesthat haveattempted to regressgroup imbalancesthroughinclusion ratherthan expropriation.As such, the Malaysian experience has figured importantly in the literature on ethnic conflict, quite apartfrom its interestto studentsof economicdevelopment for its outstandinggrowth performance. The NEP had two overarchingobjectives.First was the formal aim of all developingcountries,to reducepoverty. Second,crafted to fit Malaysia's particular circumstances,was "to acceleratethe processof restructuring Malaysiansocietyto correcteconomicimbalance,so as to reduceand eventually to eliminatethe identificationof racewith economicfunction.,,60 Quantitative targetswere set for 1990.The targetsincludedthe raising of Malay employmentin all industrial andoccupationalgroupsto levelsproportionate to their shareof the overall population,and an increaseof Malay corporate ownershipfrom its minor 2.4 percentsharein 1970 to 30 percentby 1990.

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To accomplishthis ambitiousrestructuringof the ethnic compositionof the economywithout imposing any costs on the wealth or employmentof the Chineseand Indian minorities, the economywould haveto grow at a rapid clip over the two-decadeperiod, and the increasein the shareof Malay corporateownershipwould haveto be at the expenseof the foreign ownership share,but not through expropriation. To carry out the restructuring,the NEP called for appropriatepolicies for "rural modernization";boostinggrowth in the economicallylagging, mainly Malay, regions;facilitating Malay urbanization;nurturing a Malay entrepreneurial classthrough interethnicjoint venturesand small businesssupport programs.Developmentin the lagging areaswas promotedthrough large public investmentin rice irrigation (the World Bank-supportedMuda River project); land settlementprojectsfor rubberand oil palm smallholders;and regional developmentin the predominantlyMalay East Coast province of Kuantan.While theseprogramspassedeconomicmuster,the principal motivationswereethnic and politica1.61 The NEP mandatedextensiveaffirmative action policies, interventionsfavoring Malay accessto highereducationand greaterMalay participationin the marketsfor labor, land, andcapital,where they had previouslybeenunderrepresented. The governmentissueda multitude of targets,quotas,and regulationsapplying to both the public and private sectors.Private companiescontrolled by non-Malayshad to sell 30 percentof their stock to Malays, at a discount, in order to be eligible for governmentcontractsor to be listed on the stock exchange.New publicsectoragencieswere createdto finance and operatecommercialand industrial enterprises,either wholly owned or joint ventures,as instrumentsfor enlarging Malay participation in the modem growth sectors.These were known as "trusteeshipagencies."They would accumulateassets,mainly sharesof newly formed industrial andcommercialenterprises,holding them for future distribution when Malays would be in position to acquirethem. It would be misleadingto spell out these policies, and how they have evolvedover the pastthreedecades,as a templateto apply to other divided societies.The details and adjustmentswould form a micro-accountof particularities too local for formulaic application.Instead,we should identify the basicreasonsfor the viability of the NEP. First, the policies were worked out with greatcareandprofessionalismin a transparentprocessthat included public participationandheateddebate.Second,the governmentsold the NEP as a win-win programfor all the society'sascriptivegroups;the disproportionate Malay gains were to come out of the incrementsto national economic growth, incrementsthat (the governmentpledgedto ensure)would be large enoughto amplify non-Malay incomes as well. Third, the povertyreductionprogramswerecastasethnicallyneutral;the non-Malaypoorwould

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also participate,althoughthe fact that most of the poor were Malay meant that poverty reductionwould be tantamountto narrowingthe ethnic income gap. Fourth, the affirmative action programswere implementedvery flexibly. For example,the 4: 1 Malay to non-Malay quota for the civil service was not appliedto the professionaland technicalbranches,which were administratively separatefrom the generalcivil serviceand which wereimportant avenuesfor minority public-sectoremployment.Fifth, the programwas conductedwithin a framework of orthodox fiscal, exchangerate, and monetary policies. Policy emphaseswere changedover time as economiccircumstanceschanged.Most important was the shift in emphasisfrom affirmative action to macroeconomicrevival and efficiency in 1986 in responseto a slump in overall economicgrowth. If any ethnically divided and structurally unbalancedsociety were today consideringa comparableaffirmative action strategy,it would probablyface a policy debatesimilar to Malaysia'sin the early 1970s.Critics warnedof the potentialsfor unintendedand undesirableconsequences. The emphasis on economicgrowth would succeedand would trump over redistribution; the Chinesewould end up with an evengreatershareof the national wealth. (In the early 1970sthe developmenteconomicscommunitywas hotly debating the proposition that redistribution was incompatiblewith high savings and growth.)Alternatively, GNP growth would fall well below targetin any case,not high enoughto yield much of a per capita incrementto satisfy Malay expectations;someexpropriationof non-Malaywealth might emerge that would exacerbateratherthan easeethnic relations.Or the Malay increment would be substantialbut would be capturedby an insiderelite, creating new classdivisionswithin the Malay community.The radicalcritique viewed the NEP's restructuringprong as "a justification for massivelyincreasing official support for the emergingMalay businessclass, while its poverty prong is regardedas a propagandacoverfor the restructuringpolicy and not to be takenseriouslyasa guideto action."62Summingup the uncertaintiesat the NEP'sinception,Donald Snodgrassconcludedthat "while it is plausible to believe, as official ideology contended,that a society with smaller economic disparitiesamong ethnicgroups would be a more unified society, it was also clearthat the prescribedroute to sucha stateof affairs was fraught with risks of increasingdiscord. At the very least, the NEP would require careful economicand political management.,,63 It may be interestingto note, nearly threedecadeslater, that the debate(as far as I havebeenable to determine)did not confrontthe NEP programwith the central objection that would be raisedby proponentsof today's orthodoxy for developing countries.The fiscal and monetary conservatism,of course,would continueto be applauded.But the affirmative action policies

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would be criticized for their substantialgovernmentintervention into the operationof the country'slabor, capital, and land marketsystems.The interventions would introduce partially administeredrather than market-determinedallocationof someresources,would imposesomeconstraintson foreign investors,which they would not face in other countriescompetingfor foreign capital, and would introduce significant rent-seeking opportunities in an economypreviouslyknown for low corruptionandhigh bureaucraticprobity. The essenceof the NEP was to establishdistributional outcomesintentionally very different from what was most likely (andbelievedmost likely) to eventuateif the marketeconomywere left to its own dynamicdevices.In a word, the NEP promisedsubstantialdeviationsfrom what becameknown as "the Washingtonconsensus." The basicpolitical decisionsandbroadpolicy thrustswerelocal creations. The handful of resident foreign advisers(mostly UNDP-financed)were stronglysupportiveandprovideduseful technicalanalysis.World Bankstaff, including then chief economistHollis Chenery,also endorsedthe NEP and providedthe usualindependentcommentandrecurrentmonitoringthatcharacterizedthe Bank'srelationshipswith clientsnot in crisis.Would theWorld Bank and the developmenteconomicscommunity generally adopt the samestance toward an NEP-scaleinterventionistprogramtoday?Despitethe skepticalreviews that affirmative action programsin developingcountrieshave had, the Malaysianexperienceprovidesevidenceof the potentiality for positiveresults. The upshot of the Malaysian experiencehas been most evident in the absenceof any racial tensions,any ascriptive perspectives,in the political turmoil andeconomicsetbackof 1998to 1999.One thirty-yearretrospective written in May 1999 on the resultsof the riots and the policy responseconcludedthat By any standards,this socialexperiment... hasbeena successin promoting racial harmonyandpreventingfurther bloodshed.... [S]incethepresent financial crisis eruptednearly two yearsago,the country hasn'twitnessed evena hint of ethnic tension. Malaysia'sracial tranquillity standsin sharpcontrastto the situationin neighbouringIndonesia,whereethnicviolencehaseruptedrepeatedlyover the past year. So profound have the social changesbeenthat, in the absenceof political instigation,mostanalystssaythat a spontaneous outburst of racial violenceis now highly unlikely. Indeed,the regularand occasionallyviolent streetdemonstrationsthat followed Prime Minister Mahathir Mohamad'sousterand imprisonment of his former deputy,Anwar Ibrahim, are seenby someas evidenceof the country'sunderlyingharmony.That suchdemonstrationscould takeplace without a hint of racial sentiment-previouslythe slightestsign of umest

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often sparkednear-panicamongMalaysia'sminority races-isoffered as proof of how much the country haschanged.64 Also remarkablehas beenthe shift in the focus of political contestation. From beforeMalayan independence(1957), throughthe creationof Malaysia (1963), the expulsionof Singapore(1965), and the programsfor reshaping the economyand society inthe wake of the 1969 riots,the core problem of the Malaysianpolity was interethnicrelations.In sharpcontrast,the political turmoil sparkedby the recent financial crisis has been intraethnic, internal to the Malay segmentof the population.The reasonswere twofold. One sourceof Malay division has been personalrivalry within the ruling party leadership.The otherhasbeenthe ability of the main oppositionMalay party (known as Pas) to attract voters disenchantedwith the problems of corruption, widening income disparities within the Malay community, politicizationof the police andthejudicial system,andauthoritarianism,which have developedover the long uninterruptedrule of the coalition under the dominantMalay party and MahathirMohamad,its prime minister. Thus far, the Pasconstituencyhascomprisedmainly EastCoastMalays drawn to the party'sIslamic orientationthat contrastswith Mahathir'sstrong opposition to religiousfundamentalism.Becausethe Malay populationcomprisesa bare majority, the split of the Malay vote betweentwo ethnicity-basedpartieshas meantthat neitherparty can achievea parliamentarymajority without ethnic Chineseminority support.(The contrastwith Sri Lanka is striking. With the Sinhaleseover 80 percentof the total population,the rival Sinhaleseparties havecompetedfor parliamentarymajorities without a necessityto form interethnic electoral alliances.)Recognizingthis electoral logic, Pas has pursued social policies (for example,respectingpublic attire of Islamic women) in a mannercarefully designedto avoid creating seriousanxiety among the Chinese.It remainsto beseenif the recentPaselectoralalliancewith the opposition Chinese-based party can developthe enduranceof the Alliance partnership. The startling terrorist incidentsin July 2000 committedby a tiny and obscuregroup, allegedly fundamentalist,servedas a waming that evenMalaysiamay not beimmuneto the kind of religious-basedviolenceseenin Indonesia andthe Philippines.65 The prime minister'splay of the racial cardin September 2000-averbal attackon the "extremism"of a nonpartisangroupingof 2,000 NGOs of largely Chinesemembership-was seenas an outlandishoutbidding 66 moveagainstPas,andapparentlyarousedonly a tepidethnicMalay response. Nevertheless, the strengthof Malaysia'sconflict-avoidanceinstitutionsandpolicies,andthe sensitivityof the bulk of the populationregardinganythingsmacking of overt ethnic hostility, makes it likely that extremist ethnoreligious outbiddingwill remaina marginalphenomenon.

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The changescited by Malaysiawatchersas responsiblefor the abatement of the traditional habit of using interethnicity as the lens for viewing and interpretingfundamentalissuesare largely economic.Growth of GDP averagednearly 7.5 percenta yearfor most of the 1965 to 1980 period, slowing to a 5.2 percentaveragebetween1980 and 1990, and soaringto over 8 percent in the 1990sbefore the financial crisis in 1998. The percentageof the Malay populationliving below the poverty income line was a very high 74 percentin 1970. Only 6 percentof all Malaysianswere below the poverty line in 1994. (A straight comparisonfor Malays alone was no longer possible after the governmentstoppedissuingpoverty figures by ethnic group.) The Malay shareof national wealth rose from 1.5 percentin 1969 to 19.4 percentin 1998.Thanksto rapid overall growth and a relative declinein the shareof national wealth owned by foreignersdespitelarge inflows of foreign direct and portfolio investment,the shareownedby the ethnic Chinese minority also rose substantiallyover this period, from 22.8 percentto 38.5 percent.Increasesin Malay educationattainmentwere also substantial,laying the basisfor the functional diversification of the Malay labor force that was a major objective of the NEP. By the mid-1980s,the unemployment effects of an economicrecessionwere too diverseethnically to raise issues 67 of communaldistribution of market setbacks. Regionalincomedifferentialspersisted,however,reflecting regional differencesin resourceand location endowments,differencesthat translated into lower percapitaincomelevels for the predominantlyMalay populations living in the relatively disadvantagedareas.Whateverthe barriershad been to Malay economicmobility-limited educationand skill attainment,limited accessto credit, ascriptivehiring practices,traditional occupationalorientation, and other factors-theyhad been substantiallyovercomeby the late 1990s,thanksto internal labor mobility, humancapital investments,affirmative action programs,and growth of the economyas a whole. A functional and sectoraldistribution of the labor force completelyproportional to the country'sethnic compositionwas neverintended.The purposeof the affirmativeaction and market-interveningprogramsandpolicies was to approach proportionality sufficiently to vitiate the common perceptionsof ethnoeconomicboundaries and concentrations, to narrow substantiallythe incomegapsprevailingup to the 1970s,andto reducethe imbalanceof economic powerand ownershipto a point whereit was no longer a political problemin theeyesof theMalays.Thesegoalsappearto havebeenachievedfor theMalayChineserelationship.While the ethnic Indian minority hasfared lesswell, posing a continuing challengeof equity, there is no sign that their lagging participationin the country'sincome growth is causingtheir radicalization or any ethnic mobilization for mounting a challengeto the state.

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As will be discussedfurther below, Malaysiaappearsto haveretainedthe flexibility to makesubstantialadjustmentsin the affirmative action strategy. Betweenthe progresstoward the NEP targetsand the increaseddependence of the Malay partieson Chinesevoters, thestagehasbeenset for a gradual easingor dismantling of the preferencessystem.In contrastwith the first NEP easingin the mid-1980s,which was driven by the needsfor macroeconomic adjustmentand growth revival, this secondroundderivedfrom a perception (not sharedby rural Malays, to be sure) that the country's competitivenessandeconomicgrowth underthe new conditionsof the world economy would be compromisedif the structural inhibitions of the NEP were not further relaxed. I beganthis accountof Malaysianexperienceby noting that the country is judged an outstandingexample of conflict-avoidancepolicy-making and management.A comparisonwith the violent outcomesin many other countries readily supportssuch a judgmenteven though, admittedly, the kudos are basedon a counterfactualproposition,namely that conflict would have recurredabsentthe policies and root changesthat have beenpursuedsince 1969, and absentthe interethnicpolitical coalition that created,and was dependentupon, thosepolicies. In Donald Horowitz's view, "Malaysia'sconsiderableconflict potentialhasbeenreducedby the creationof an interethnic center,almostin spiteof itself-thatis, an interethniccoalition that occupies the middle groundand that, whateverthe actualbeliefs and sentimentsof its membersandleaders,fostersinterethnicaccommodation."68 Needlessto say, thesekudosdo not imply that Malaysiais a utopia, a country without political, judicial, or economicshortcomings.The kudos also do not imply any overlooking of the fact that some of the policies judged successfulin the frameworkof conflict avoidancehavecausedproblemsfrom otherperspectives. For example,the NEP createdopportunitiesfor cronyismand insider accessto reservedshares,and it has generatedconsiderableChineseirritation over the higher-educationquotas.However, if one acceptsthe widely held counterfactualproposition,andtakesaccountofthe above-average economic growth and poverty-reductionperformancethe policy frameworkhas helpedto bring about,then the presumptionis reasonable(incontestable,in my view) that the benefitsofthe actual outcomesgreatly outweighthe costs or possiblemissedopportunitiesincurred. .

Thailand: Learning and Foresight

Thailand is usually thought of as relatively homogeneous,both culturally andethnically.About 95 percentof its 60 million peopleareBuddhist,speak Thai (or a closely relatedcognateof the Tai languagegroup) as their mother

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tongue,and identify themselvesas ethnic Thai or, in the caseof the SinoThai, as highlyassimilatedwhile perhapsretainingsomeChinesetraditions. There are a number of small minorities linguistically and/or more or less culturally relatedto the Thai, such as the Khmer living in provincesbordering Cambodia,and the "Hill Tribes" in northern mountainousareas.The largestminority that is culturally quite distinct (thoughbilingual) is the Malay Muslims who form a local majority in the southernareaborderingMalaysia. Among the ''Thai'' majority thereare manygroupsthat retaindistinctiveidentities of languageor dialect pronunciation,traditions,or local religious particulars, but whosebilingualism and overarchingadherenceto Buddhismmake inclusion in ''Thai-ness''a comfortablereality for themselves,otherThais, and the state.As of the mid-1980s,one anthropologistcould write that For the mostpart, thesepeopleare not pushingfor formal political recognition for their communities,largely becausethe way in which chat Thai (''Thai nation") is definedmakesit possiblefor peopleto havedistinctive identitiesandstill seethemselvesandbe seenby othersas"Thai."... Even peoples... speakingdistinctivedomesticlanguagesandfollowing distinctive cultural traditions,havebecomesufficiently bilingual and bicultural to find no difficulty in also identifying as Thai. This "Russiandoll" relationship betweenlocal ethnic identitiesand nationalidentity is easiestfor thosewho adhereto Buddhismand speakThai fluently asa first or second 69 language. Threeepisodesof ethnic conflict standout in Thailand'smodemhistory, one of which involved an extendedviolent insurgency.Although theseconflicts figure prominently in the Thai literature,Thailand seldomappearsin the conflict literature.7o The reasonis that Thai governmentsmanagedto developeffectivepolicy responsesto mitigate or removethe root causesthat might otherwisehave fueled more seriousconflict than what actually took place.As theseepisodesflowed to someextent from root causessimilar to those operatingin other countriesthat have not avoided deteriorationinto severeviolent conflict, it will be instructiveto review the Thai experience. In the first episode,over a numberof yearsbeforeandafter World War II, Thai governmentspursuedprejudicial and repressivepolicies againstthe local ethnic Chineseminority, which could have generated violent response. In the second,Thailandhada simmeringlow-level conflict that many sawas essentiallya Cold War phenomenon,one of the interrelatedCommunistinsurrection-cum-subversion strugglesof SoutheastAsia that more or less simultaneouslychallengedthegovernmentsin SouthVietnam,Cambodia,Laos, Thailand,and Malaysia,in the wake of World War II. The third was a Malay separatistmovementin the south.

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Ethnic ChineseExclusion. In the 1930sthe Thai military elite who had seized power from the country's ancient absolutemonarchy begana program of discrimination against the ethnic Chineseminority comprising roughly 15 percentof the population.In previouscenturies,Thai kings had encouragedthe immigrationof Chinesewho would createa commercialsector and man the tin mines,occupationsin which neitherthe Thai royal and bureaucraticelites nor the Thai peasantryevincedany interest.After World War I, the elite beganto view the Chinesecommercialdominance(along with the Europeancompaniesthat had predominatedin the country'sbanking and internationaltrade) with disfavor, a view not necessarilysharedby the peasantry.The elite believedthat Chinesemerchantsand moneylenders were exploiting the farmers and engagedin market-riggingcollusion. (Researchin the 1950sshowedthat the allegationsof farmer exploitation were bogus.Competitionamongthe Chinesemerchantsbuying Thai small-farmer producekept the merchants'farmgateprofit margins razor thin.) The Thai elite'seconomicsuspicionswerecompoundedby observationofthe minority's war in 1937. Besympathywith China after the onsetof the Sino-Japanese fore World II and then into the early 1950s,policies were promulgatedto block Chineseparticipationin certain occupations,to impose a special tax on the Chinesecommunity, to limit Chineselanguageusageand Chinese schools,to require adoptionof Thai names,to preventChinesealiens (who still compriseda majority of the local Chinesein 1940) from owning land, andto establishstateenterprisesto competewith Chinese-owned businessor to preemptthe manufactureof new productsin the nascentindustrial sector?! Although the rationalefor thesepolicieswasethnicnationalism,not commandeconomyideology,the countryappearedto beheadingdown the pathof etatism andthe underminingof the fiscal and monetaryconservatismthat hadbeenthe hallmarkof Thai economicpolicy for the previoushundredyears. It may be arguedthat similar racist policies that engenderedviolent responsein other countrieswould not have causeda violent challengefrom the Thai Chinese,given their relatively small numbers,their internal divisions by dialect and province of origin in China, and their concentrationin Bangkok under the centerof Thai power. In any event, such a what-if was nevertested.The Thai military-political leadershipwas willing to be bought off, the discriminatoryand preemptiveprogramswere implementedloosely and ineffectively, and the Thai propensitiesfor compromiseand accommodation won out over the impulsesfor divisivenessand confrontation.If vigorously pursued,the anti-Chinesepolicies would havehobbledthe country's economicdevelopment,a more certain what-if, with seriousconsequences for the secondconflict-risk, which emergedduring the Cold War. Fortunately, a changeof governmentthrough a coup in 1957 brought about a policy re-

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versal. Thenew regimedroppedanti-Sinicism,which had neverpenetrated deeply into Thai society, and the accompanyingcreation of state (or "bureaucratic")capitalism.In their placethe governmentadoptedthebasicpolicy framework and institutions for enhancingdevelopmentunder a market economysystem.Without etatism,economicpolicy becameascriptivelyneutral; developmenttrumpedethnicity as the centralconcernof the state,apart from security. The powerful encouragements afforded to the private sector underthe new regime and subsequentadministrationsgave a wide berth to the Chinesebusinessclass.The collapseof anti-Sinicismandthe many years of Sino-Thaiintermarriageand cultural assimilationhavebroughtaboutthe most successfulintegrationand inclusion in SoutheastAsia of an "overseas Chinese"ethnic minority. The number of Chinesedescendantswho speak Chineseas a first, or even secondlanguage,or who can read Chinese,has beendwindling for two or more generations. EthnoregionalExclusion.The secondsocial threat, the insurgencyof the CommunistParty of Thailand,had potentialitiesof a different sort. The initial impetusand the insurgency'sfinancial supportcamefrom outsideThailand, and thus were problemsof internationalsubversion.The fear that the insurgencymight grow into a major conflict derivedfrom the possibility that the insurgencymight appealsuccessfullyto importantethnicgroupsthat had groundsfor disaffection. The largest of theseethnicities was the Isan, or Thai-Lao. The Isan comprisednearly one-third of the Thai populationas a whole, and was (and is) the largest ethnic group of the Northeastregion. While the languageandcultural distinctionsbetweenthe Isanandthe central and BangkokThai may now appearto havebeensmall comparedwith ethnic marker differencesin many countriesexperiencingconflict, the differenceswere vivid to both sides,historically and into the post-WorldWar II years.The heavyhandof the centralgovernmentwas imposedon the Northeastonly in the late nineteenthand early twentieth centuries.Prior to this time, the Northeastand other outlying regionsof the Thai (then "Siamese") state were governedindirectly, through local elites. Siam moved to closer incorporationand consolidationof theseregions as a measureto staveoff colonial encroachments from Franceand Britain. Although the Siamesegeopolitical programsucceededin maintaining the country's independence,it laid the basisin the Northeastfor a rebellion during 1901 and 1902, and for subsequentdisaffectionand separatistsentiment. The CommunistParty of Thailand (CPT), illegal since 1947, focusedon the Northeaststarting in the 1950s.The party's Sino-Thai leadershipexpectedto recruit an Isan following basedon the region'spoverty; its resentmentsovereconomicneglectby, andcultural disdainfrom, Bangkokandthe centralThai; and the government'srepressionof Northeastpolitical leaders.

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Thus, althoughthe Cold War contextso basic to conflicts in SoutheastAsia (and elsewhere,of course)of that era no longer figures in the conflicts of today or the conflicts likely to occupy the internationalcommunity in the yearsahead,the local elementsor roots of many of the earlier conflicts are similar to the sourcesof many post-ColdWar internal conflicts. In the Thai case,it was a mix of classand ethnic factors. Prior to 1976,the CPT hadonly very limited successin convincingpeople that it understoodthe root causesof inequality andrepressionin Thai society and that it offered a realistic meansto eliminatethosecauses.For the most part, the peoplewho joined the CPT insurrectionwere motivatedas much by ethnic as by classconcerns.In northeasternThailand,the concernswerethoseof the Lao ... populacerelativeto the dominantThai; in the North they werethoseof the tribal peoples,especiallythe Hmongand Karen; and in the South they were thoseof the Malay Muslim peoples living in a Buddhiststate.72 Despite the potentialitiesthesedifferencesand grievancesoffered for the CPT, and despitethe windfall the CPT receivedwhen military government repressionin the mid-1970s,especiallyof middle-classuniversity students, drovethe young oppositioninto the ranksof the only organizationposingan armedchallengeto the dictatorship,the insurrectionfailed to sparka large response.On the contrary, at its peakin 1979 the CPT had perhaps14,000 underarmsand perhaps2 million villagers (out of a populationof about45 million) under party influence or control; by late 1982 the CPT was near collapse. How was this conflict successfullymanagedandeliminated?Proponents of responseby force arguedfor a numberof yearswith thosewho believed that other meanssuch as political appeal,regional administrativereform, and/or expansionof economicinfrastructureand social serviceswould be more effective.The emphasesand substanceof Thai governmentstrategy swung back and forth betweentheseviews. At times, both strategieswere pursuedat once, with the military commandin one region favoring force and the commandin anotherregion favoring reform and local development. Proponentsof a nonmilitary strategyto undercutCPT supportby addressingroot causesof Northeastalienationfinally won the upperhand in the late 1970s. External factors also turned favorable, primarily the decision by China to suspendits propagandaand financial support of the CPT. At the risk of oversimplifying a complex history of a conflict that waxed and wanedover severaldecades,the principal domesticfactors were as follows:

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1. refugeesfleeing Communistvictoriesin neighboringLaosandCambodiabringing to Northeastvillagers firsthandaccountsof unpleasant effectsof Communistrule; 2. the substitutionof amnestyand rural developmentin placeof force; 3. retraining of local officials to changethe characterof official-villager relations, from arroganceand exploitation to cordiality and developmentprogramassistance; 4. assignmentof the bestofficials to the provincesinvolved, in place of the traditional personnelpractice of treating the Northeastas a Siberiafor the worst bureaucrats; 5. heavyinvestmentin the previouslyneglectedtransportation,power, water, and healthand educationalfacilities of the region; and 6. the autocraticmethodsof the CPT that repulsedthe urban students who were seeking(in "the jungle") a democraticalternativeto the military autocracythey had fled in the first place.

In sum, externalsupporthelpedbuild, then desertedthe conflict; the insurgentparty understoodthe rural/ethnicmobilizationpotentialities,but misunderstoodand squanderedits potential as an alternativefor the students; the governmentpursuedmixed strategies(finally opting for nonmilitary solutions) that addressedNortheastgrievances-neglect, poverty, and the exploitation and overbearingbehaviorof local officialdom-sufficiently to minimize Isan responseto the call for conflict mobilization. The externalaid agenciesplayeda significant part in both theseconflict managementexperiences.As far as the donorswere concerned,the reversal and cancellationof the anti-Sinic programwas an unintended,althoughinherentand essential,consequenceof the strategicpolicy reform they were advising and assistingon developmentgrounds,and of technically driven aspectsof specificsectoralprojects.In retrospect,the ethnic inclusionimplicationsand effects of the donor activities are clear and worth citing as examples of conflict-potential alleviation at the roots level. A general developmentblueprint, including the policy and institutional requirements for a shift toward substantialrelianceon private investmentand ownership, was drawn up by the World Bank.?3The USAID funded policy studiesand promotionalprojectsaimedat stimulatingprivate,especiallyforeign, investment.A critical reform componentrecommended(then monitored)by donor investment-policyadvisors was a governmentcommitmentnot to initiate any stateenterpriseproductionthat would competewith private enterprises investingin Thailand underthe new promotionalframework. Residentforeign technical advisorsstrengthenedrelated policy analysiscapabilitiesof the nascentThai planningorganizations.Very importantwasthe recognition

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andbackingthe donorsgaveto reinforcethe intellectualand moral authority of the small first postwargenerationof modern technocratsto whom the military looked for definition and managementof developmentgovernance. The technocrats,virtually all of whom wereschooledat EuropeanandAmerican universities, included ethnic Thai, Chinese,and Sino-Thai. Their worldview was professionaland inclusive. They viewed questionsof income and assetdistribution, labor force structure,and other economic issues,in theregional,class,andfunctional termsof standardeconomicanalysis, in contrastto the ascriptiveframework of previouseconomicmanagement back to the 1930s.14 At the sectorallevel, aid projectswere instrumentalin weaninggovernmentawayfrom direct operationor preemptionof functionsbetterperformed by marketsand private enterprises.For example,under an extensiveprogram of bridge, culvert, and highway construction,USAID introducedthe idea of developinga private contractingindustry capableof building transportationinfrastructure.Before this programwas undertaken,all such constructionhad beencarriedout by governmentagencies.The USAID-funded program was designedto assistlocal contractors,all small firms then capableonly of constructingbuildings, to replacedirect governmentconstruction (i.e., to "privatize" road construction,long beforeprivatizationbecame dogma).By dividing highway and bridge projectsinto numbersof separate small contractsfor short stretchesof roadway, the infrastructureprogram wasableto producea secondaryinstitutionalbenefit,the nurturing of a more efficient private constructionsector.15 The fact that this approachbenefited the growth of then mainly ethnic Chinesecontractors,facilitating the withdrawal of governmentfrom this function, was unintendedper se, perhaps evenunrecognizedby USAID as a significantreversalof the policy of antiSinic preemption. The concernof theThai authoritiesandof aid donors(primarily the United Statesin the earlier years)to sustainstability in the Northeastregion dates from the earliestyearsof post-WorldWar II aid (startingin 1950), well before the CPT initiated armed conflict (1965) and before Charles Keyes's "Russiandolls" model had maturedas the Thai ethnic paradigm.In their searchfor projects in the 1950sand 1960sto raise living standardsin the Northeast,the donors(andthe Thai government,of course)hadfew options. The region was entirely agricultural.It sufferedfrom severedisadvantages comparedwith otherareasof the country-poorsoil and water,limited productionof tradablecommodities,locationalandtransportcostdisadvantages, and poorly developedmarketingsystems.Unlike in the EastPakistancase, the donorssoughtout investmentopportunitiesdespitethe virtual certainty, and the accumulatingevidenceevenas early as the mid-1950s,that the rates

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of return on projectsto raise Northeastagricultural productivity would be low, if not negative. It is generallythe casethat the costsof installing and operatingirrigation projectscanbe laid out in advancewith considerablecertainty,whereasprojectionsof expectedbenefitsdependon assumptions(of farmers' wateruse and choice of agronomic practices,crop patternsactually adopted,future prices, and so forth) that can be defendedas "reasonable"within a wide range. Moreover, the acceptability of the project then dependsfurther on the minimum rate of return the sponsorsemploy as a standardfor economic viability andon technicalrules usedfor arriving at the benefitamountsto be comparedwith the costs(e.g., for how many yearsthe analystassumesthe projectwill last). In the face of the grossfailures of the first postwarroundof small USAID-financedNortheastirrigation projects,the World Bank'sfirst (medium-sized)irrigation project feasibility studies(in 1979, of the Lam PaoandLam Takhongprojects)metacceptabilitystandardsby makingoveroptimistic assumptionsaboutcropdiversity andhow quickly productionincreases would be realized,andby understatingthe real costof agriculturallabor. In the 1977 feasibility study of USAID's largest Northeastirrigation project, the Lam Nam Oon, similarly optimistic assumptionsyielded a rate of return marginally abovethe cutoff point of unacceptability.The USAID study assumeda projectlife of fifty yearsandusedan 8 percentdiscountrate to arrive at the presentvalueof the future benefitstreamfor comparisonwith costs.If USAID had usedthe sameassumptionsas thosebehind the World Bank'sNortheastirrigation feasibility studies,thirty-yearprojectlife and 15 percentdiscountrate,the projectedeconomicreturnof Lam NamOon would in Lam have beenunacceptablylow.16 In any case,the resources invested Nam Oon would haveyielded greaterbenefitsto the country'soverall economic developmentat the time if they had been applied in other regions. Whetheror not the project analystsdeliberatelymanipulatedtheir assumptions to pushthe ratesof returnabovethe rejectionpoint, it wasclearthat the donors (subsequentlyincluding the Asian DevelopmentBank and others) deliberatelyinvested-ifjudgedby efficiency criteria alone-suboptimally, by their own standards. Theseirrigation projectsare interestingas explicit illustrations of donor intent and flexibility (i.e., willingness), in a region of high sociopolitical importance,to fund projectswith low probability of makingeffectivecontributionsto poverty reduction.(At best,irrigation could provide only a small contributionto Northeastpoverty reductionas the irrigation potentialof the entire region was about 15 percentof its arableland.) Other development programsfor addressingthe relative backwardnessof the Northeastregion

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included(inter alia) investmentsin healthandeducationprogramssimilar to the nationwideefforts to developthe country'shumancapital.As such,the latter were not exceptionalexamplesof donorresponseto conflict potentiality. (The humancapital investmentswere arguably more effective than investmentsto raise output from within the region. As is often the casewith resource-poorregions,outmigrationof youngtrainedadultsanda returnflow of remittancesfrom their employmentin faster-growingregions-including, in the Thai case,employmentin the Middle Eastand elsewhere-have beenmajor sourcesof increasesin the backwardregion'spercapitaincome.) Therewere two otheraid-financedprojectsin the Northeastregion,however, worth particularmentionas examplesof activities designedto ameliorate what were seenas root causesof potential Isan disaffection.One was a project to establishan in-service academyfor officials slated for appointment as district chiefs. Togetherwith training to increasetheir administrative skills, the academyworked to instill democraticvaluesand to motivate the traineesto substitutehonestand sympatheticbehaviorin place of the traditionalauthoritarianattitudetowardvillagers.A largenumberof the academy graduateswere assignedto the Northeastwhich becamethe preferred region for careeradvancement. The secondproject was a large rural developmenteffort that provided well drilling, sanitation,rural roads,and otherfacilities to villages andareas targetedfor their apparentor assumedexposureand susceptibilityto disaffection. The U.S. aid programin particular included several otherprojects designedto "win heartsand minds" in the Cold War jargonof the time, some not very effective in their implementation.The Thailandliteraturecontains much controversyon the role of theseactivities, with somescholarsmaintaining that Thai culture and history insulatedthe Isan from conflict mobilization, quite apart from the efforts of theseprogramsto createa senseof inclusion in a previouslymarginalizedregion. Othershavearguedthat, notwithstandingsuchsocial assets,the relatively low level of insurgentmobilization would have grown had the specific sourcesof grievancenot been 77 The latter was clearly the view of Thai governmentsduring this addressed. period, perceivingthe Isan conflict threatas "a crucial elementin the determination of Thailand'sfuture." Rural developmentin the Northeastbecame a central themeof governmentdevelopmentplanning.7s My own judgment is that the two views should not be seenas mutually exclusive.The Thai government(asI havewritten elsewhere)"recognizedthe village-level problems that the insurgencycould have turned to its purposes,gradually blanketed the insurgent areaswith developmentprogramsand benefits, and restaffedand retrainedthe cadreof district officers. The governmentbegan with strongassetsin villager predispositionsand attachmentsto symbolsof

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monarchy,religion, and country. Whateverit did was apparentlysufficient to deny the CPT the social andeconomic'asset'potential(of discontentand deprivation)on which a successfulinsurgencycould havebeenbuilt. Given the importantrole the U.S. aid programplayed in this denial process,it appearsto deservethe credit accordedto it by thoseThais who believe[the aid programs]madesignal contributionsto the restorationof stability."79 In sum, a low-level, violent insurgencywas under way; the threat of wide conflict basedon Isan economicand social grievanceswas credible; the governmentandaid donorsmadea considerableeffort to addressthesegrievances; the insurgencysupportgaveout, and the fearedwider conflict was avoided. Malay SeparatistMovement.The third areaof potential violent conflict hasbeenthe small ethnoregionalconcentrationof Malay Muslims along the Thai-Malaysiaborder.The areahas beentroubled recurrentlyby scattered lawlessness,by the southernwing of CPT activities, and by a movement aiming at separationfrom Thailandand incorporationwithin Malaysia.Although the separatistfaction apparentlydevelopedconsiderablelocal support in the 1970s, its external support came from some distant Muslim countries,not from Malaysia. By the mid-1980sthis movementalso lost local supportand withered.The populaceand its mainstreampolitical leadershippreferredinclusion in the Thai state,while the stateand, importantly, the Thai monarchyrespondedwith inclusive measuresapparentlysufficient to undercutthe potential appealof separatism. Note the contrastbetweenthe Thai and Malaysian casesin the role of economicpolicy reform and, specifically, the reliance on the operationof marketsas a factor to reduceconflict potentiality. In Thailand,government reducedits marketinterventionsandproductionpreemptionin orderto abandon ethnic-Chineseminority discrimination. In Malaysia, governmentincreasedits market interventionsand public-sectorproduction activities in orderto promoteethnic-Malaymajority economicinclusion, in effect creating educationaland otherexclusionsof the Chineseminority. In both cases, the minority was the richer ethnic group. Underlying the differencesof approachin the distributional (not macroeconomicor monetary)economicpolicies of the two countrieswere fundamentalsocioculturalcontrasts.The ethnic Chinesein Thailandnumbered15 percentof the population,less than half the proportion in Malaysia; in importantcultural respects(religion, cuisine,etc.) the differencesbetweenthe ChineseandThai were muchlesspronouncedthan was the casebetweenthe Chineseand Malays. In both cases,the economicpolicy responseswere designedto narrow differencesin incomeandfunctional distribution.The Thai strategyreinforced assimilationthrough inclusion; the Malaysian strategy, facing permanent,sharply defined, ethnic communities,pursueda long-run

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"separatebut equal" outcomethrough affirmative action. The comparison illustratesan important,if simple, point-namelythat conflict-management strategiesin divided societiesmust be tailor-madefor local circumstances. Two oppositestrategiesmay both be effective, in their two different contexts. Finally, as far as the Isan minority problem was concerned,the programs of public works and other investmentin the relatively backward ethnoregioncomparedwith similar governmentefforts in the primarily Malay EastCoastprovincesof peninsularMalaysia.

Bhutan: Accommodation The small Himalayan kingdom of Bhutan is an interestingexampleof an ethnically heterogeneous country that has managedits interethnicrelations well, but hasbeenoverlookedin theconflict literature.Like Thailand,Bhutan is a Buddhistkingdom that avoidedcolonization,and that encourageda foreignethnicgroupto immigratefor purposesof economicdevelopment.Early in the twentiethcentury,a prominentBhutanesefamily invited severalelite Nepali families to settlein areasof southernBhutanthat were very sparsely populated.so Nepalishadbeenmigrating out of denselypopulatedNepal for sometime in searchof arableland in the two districts that lie betweenNepal and Bhutan (i.e., Sikkim and DarjeeIing). By 1900 the Nepali immigrants had becomethe majority community in thesetwo districts. By the 1920sa sizableethnic Nepali populationhad movedinto southernBhutan.The relations betweenthe Nepalisandthe dominantindigenousDrukpaswerepeaceful andmutually beneficialfor overa half century.Underan informal regional decentralizationof authority, the NepalisacceptedDrukpadominanceat the centerin exchangefor considerableautonomy,and relatively greatereconomic development,in the Nepali areas.In the 1960s and 1970s,Bhutan invited anotherwave of Nepalis to work under contract on infrastructure projects.Subsequently,the governmentallowed them to remain, although they were technically illegal, as they were viewed as essentialfor implementing the country'sdevelopmentprogram.Until the 1980sthe principal disputeswereintraethnic,amongthe Drukpas. In the 1970s and 1980s, the DrukpalNepali relationshipwas gradually becomingdestabilizedby ethnic politics and by crises involving Nepalis who had left Nepal to settlein neighboringareasoflndia. When large numbersof the latter wereexpelledfrom northeasternIndia, they movedillegally into southernBhutan, which was thinly populatedcomparedwith the surroundingstates.Concernedby the rise of the Nepali communitiesto political dominancein Sikkim and Darjeeling,and the threatto Bhutaneseculture in the eyesof the Drukpa,Bhutandecidedin the late 1980sto tighten its immi-

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gration policy and to force the illegal Nepali residentsto leavethe country. The expulsionwas accomplishedpeacefully,as the governmentfully compensatedthose expelled for their property losses,even for land on which they had settledillegally. Although the expelled population was settledin campsinside Nepal, creatinga borderissuewith the governmentof Nepal, and althoughfor a time Nepali political partiesin southernBhutanhad carried out a violent campaignto pressureBhutanon its immigrationpolicy, the long-term Nepali community in Bhutan has preferred thatthe camp residentsinside Nepal not return to Bhutan.At the sametime as the expulsion, the governmentintroducedcultural protectionpolicies similar to thosethat in someother countrieshave led to severeconflict; thesepolicies included such as establishingthe local language,Dzonka, as the national language, restrictingthe useof Nepali in southernschools,and requiring a dresscode. Thesepolicies inducednumbersof the legal Nepali residentsto leave the country for AssamandWest Bengal.A violent Nepali resistancemovement in theseareaswasdirectedat southernBhutan-infact, aiming at the Nepalis who had decidedto remain in Bhutan. Stability has beenrestoredwithin Bhutan, no doubt helped by governmentpoliciesthat haveprovidedadditionaleconomicincentivesfor the longterm Nepali residentsto remain.Therehasalsorecentlybeensomepeaceful movementof ethnic Nepalis from the south into the mountainousnorthern areasof the country that heretoforewere populatedonly by Bhutanese.The policy of holding off potential inundation from the vastly more numerous Nepali populationsin northeastIndia and Nepal itself has been successful thus far. It remainsto be seenif Bhutanwill continueits policy of tolerance andmutually beneficialrelationswith the local Nepali community,or if elementswithin the Drukpa elite who favor total expulsionsucceedin turning Bhutan'sethnic policies toward hostility. The Bhutaneseexperienceto date illustratesan interethnicdynamic that hassucceeded in avoiding a descentinto widespreadviolent conflict, despite the considerablecross-borderprovocation.The key factorswere (a) political divisions within the two ethnicities,the dominant view in each preferring maintenanceratherthan destructionof the statusquo, and (b) the grantingof economicrights to the minority, and the use of economicincentivesto secure nonviolent resolutionof minority grievances.There are parallelshere with key factors in the Malaysianinterethnicarrangements. Mozambique:Preventing Conflict Recurrence

Mozambiqueis an interestingcasefor examiningthe conflict implications of developmentand reform processesin which donors play a significant

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part. Ever since the resolution in 1992 of the country's sixteen-year, postcolonialcivil war, Mozambiquehas been favored by the international communityfor the adherenceof the former combatantsto the electionsand othertermsof the accordsand for the creditableperformanceof the government. The country emergedfrom the civil war as one of the very poorestin the world. As an exceptionthus far to the common syndrome,that having fallen into civil war once, a country is at high risk to renewedconflict, Mozambiquehasbeenan importantlaboratoryfor postconflictreconstruction. During the courseof a World Bank studyin 1997of the Bank'srole in this reconstruction,several Mozambicaninterlocutors complainedthat the privatizationand other componentsof the government'seconomicprogram were favoring the region of the dominant (Shangane)ethnic group of the governingparty (Frelimo), the country'sdeepsouth,and were aggrandizing membersof that group'selite. (Frelimo is an acronymfor the Front for the Liberation of Mozambique,one of the two combatantparties in the civil war.) The predominanceof this ethnic group in the acquisitionof privatized stateenterprises(excluding selectedlarge enterprisessold to foreign investors) may well have reflected (as assertedby the program'sdefenders)a dearthof entrepreneurialexperienceamongotherethnicitiesin Mozambique. Critics also alleged that information about privatization opportunitieswas not availablein areasremovedfrom Maputo (the capital city, alsolocatedin the extremesouth), that the successfulcapital-poorbuyerscould have purchasedtheseenterprisesonly thanksto bank credit not easily accessibleto othergroups,and that the buyerswere individuals who happenedto be connectedto the ruling political party. The critics also complainedthat infrastructurereconstruction,financedlargely by donors,had beenconcentrated of the oppositionparty, Renamo in the samesouthernarea.Representatives (the Portugueseacronymfor the MozambiqueNational ResistanceParty), told the study groupthat they knew nothing aboutthe World Bank'sprojects or how beneficiaryparticipationin Bankprojectswasdeterminedor accessed. The perceptionthat the Shanganewere benefitingdisproportionately,at the expenseof Renamo-supportingethnic groups, was especiallytroublesome,threateningto reopenthe sameethnic fault lines that had characterized the long civil war. Someof the complaintsmay have beenunfounded, and someof the apparentallocationbias was unintentionalor was driven by objective economicreconstructionpriorities. For example,someof the regional differencesin reconstructionactivity up to that time were due to the lagging implementationof some donors comparedwith others; provinces had beendivided amongthe donors for area,rather than functional sector, concentration.The highestregionalpriority hadbeenplacedon restoringthe southerntransportationcorridor essentialfor SouthAfrican exports,thereby

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a natural areafor generatingeconomicactivity for Mozambique.The perception of regional imbalancein the reconstructionprocessmay havebeen reinforced (a) by the fact that the Renamo-heldareasduring the conflict, which have remainedRenamoelectoral strongholds,suffered the greatest destruction,and beganthe reconstructionprocessfrom a lower basethan Frelimo strongholds,and (b) by the limitation of World Bank and other aid projectsundertakenduring the war yearsto nonconflict areas,again primarily the south,a patternthat took time to adjust.Theseimpressionsand outcomes,to some extent only transitional, had createda perceptionof a reconstruction/reformprocessthat was prejudicial to the interestsnot of the generalnoneliteacrossethnicities(as in the Russiancasereferredto below), but to the interestsof nonfavoredethnic areasand groupsas a whole. There are no signs of Mozambiquemoving back toward armedconflict. Both the governmentparty Frelimo and Renamo(the party of the insurgents during the civil war) have adheredto the peaceaccordsin one of Africa's most successfulconflict-resolutioncases.In the immediatepostwarperiod, Mozambiquefacedthe difficulties commonto virtually all recentpostconflict situations:demobilizingcombatants,resettling refugees, clearingmine fields, distributing humanitarianrelief until domesticproductionof food and other essentialscan be revived, reviving economicactivity, and conductingan election in a society with low literacy, often no previouselectoralexperience,and havingsufferedextensivedestructionof its socialcapital andinstitutionalinfrastructure.With major donorassistance,theseproblemswere overcome.81 Betweenthe country'scomparativepolitical successandthe government's responsibleeconomic performancethus far in the postconflict period, Mozambiquehas gained international recognition as one of Africa's best 82 conflict-resolutionandpostconflictpeacekeeping andredevelopmentcases. Nevertheless,nine years (at this writing) is a short period after an elevenyearconflict of unusualferocity, in a societythat is amongthe very poorest in the world and has existedas a self-governingpolity for only twenty-five yearsfollowing nearly five centuriesof colonial rule. Both the fragility of Mozambique'spolity and the potentialfor a return of instability were demonstratedby the secondelections,in December1999, and their aftermath. Basedon the increasesit won in the nation'slegislature,its captureof an additional province, and its narrow loss of the presidentialcount, Renamo claimed that it had been deprived of victory by election fraud. The party decidedto boycott the legislatureand to move its headquartersback to the town of Beira, its provincial stronghold.Although Frelimo could have invited Renamoto join in a consociational,power-sharingcabinetafter each of the two postconflict national elections(as notedearlier), it has preferred to rule as the solepowerever sincethe fighting ended,exercisingits winner-

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take-all authorityin accordancewith the electoralprovisionsof the country's constitution.This authority includes central governmentappointment,not popularelection,of the provincial governors.The Frelimo governmenthas refusedto appointany governorsfrom theRenamopartyevenin the provinces with Renamoelectoral majorities. Its refusal after the 1999 electionsappearedto deepenthe opposition'sangerover theseexclusions. In a troubling developmentin August 2000, the governmentarrestedfive Renamomembers,accusingthem of planninga nationwidecampaignof civil 83 According to one Swedishstudy (Abrahamsson disobedience. and Nillson, 1996), there were signs of discontentby 1996 among regional and ethnic elites who felt excluded,both economicallyand politically. The authorsconcludedthat politics in Mozambiquewas becoming"ethnicised"and that ethnic groupswereshowingan early susceptibilityto ethnopoliticalmobilization. In effect, they soundedan "early warning": It is not yet commonfor the populationgroupsof the rural areasto interpret the inadequatesatisfactionof basicneedsasan ethnicproblem.In the caseof the elites the situation is otherwise,and their public agitation in ethnic termsis rapidly beingdisseminatedin public talk.... If the [1994] election results can be interpretedin territorial terms and not by socioeconomicdifferentiation,they provideat leasta startingpoint for continuing territorial mobilisationof voter supportin the nextelections.Federalist demandscan soonbegin to emergefrom this type of territorialisationof politics, followed later by separatistones. We are not speakingof an imminent and acute risk of major subnationalconflicts occurring,but it is nonetheless importantto keepa sharp eyeon the processesthat can leadto thesetensions,deeplyrootedat territoriallevel, becomingacutecontradictions.84 Both the governmentand the donors are aware of the dangersto Mozambique'sstability. The donorshave been pressingthe governmentto take a more inclusive stancetoward the opposition.The 1999 election resultswereinterpretedasa popularreactionto an inadequateflow of resources to the poorestcentralprovinces,a sign that the flow must be increased.Programs in agriculture,rural development,and educationare being designed for decentralizedimplementation.Although thesemeasuresappearedto be an attemptby Frelimo to increaseits electoralappealin future elections,it remainsto be seenwhetherthe programsproducemeaningful"inclusion" of Renamoleadershipin the largeareaswhereRenamomaintainsmajority popular support.The devil will be in the details,especiallythe extentto which the decentralized,local decision making and implementationcan bypassthe Frelimo governors.On the one hand, there is an inherentcontradictionbe-

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tweenthe funding andmanagement-decentralizing devicesof donor-financed developmentprogramsand the political realities of an appointedand centralized government structure underone party'scontrol on the other. Donor efforts to preventcaptureof aid resourcesby the politically dominanttribes in Kenyaprovideexamplesof what canbe attemptedandthe resistancesuch attemptsmight encounter. In sum, Mozambique'spostconflict experienceservesto illustrate the potentialdangersof ignoring-in a deeplydivided society-ascriptiveownership patternsand unbalancedresourceallocationsthat may result from reform anddevelopmentprocessesthat areinitially conceived,perhapsonly by the internationalagencybackers,in technicaland financial terms.

Mauritius: Ethnic Power-Sharingand Economic Equity Without Preferences Mauritius is anotherethnicallydivided countrythat was at risk to communal conflict but hassuccessfullyavoidedbecominganotherentry in the conflict literature.Although it is a small island statein the Indian Oceanwith a population of abouta million inhabitants,no groupof which canclaim precolonial "indigenous"presence,the country'sexperienceshould not ~ overlooked Mahaweli, as a remoteanomaly.Justbeforeindependence in 1968,riots between(African ancestry)Creolesand (SouthAsian ancestry)Muslims-27percentand 16 percentof the population,respectively; the largestgroupwas SouthAsian to presagea violent future. Hindu, numbering52 percent-appeared Mauritius fortunately inherited from its British colonial period a parliamentary systemto which the elites of all groups had becomesocialized. Despiterecurrenteconomicstrainsandcontentiouspolitics amongethnicitybasedparties,the country has avoidedany recurrenceof violence as a dispute-settlement recourse.Somewhatanalagousto the Malaysianexperience, the Mauritian political systemhas beenconsociational.Governmentshave been basedon interethnic coalitions. Such coalitions have been virtually unavoidableunderan electoralsystemdesignedto force coalition outcomes. The systemwascraftedpreciselyto reflect the country'sdemographicstructure. As a democraticvariant that hasbeenmore suitableand more conflictavoidingin its outcomesthanany unadjustedadoptionof eithertheAmerican or any West Europeanelectoral systemswould have been, the Mauritian systemservesas an examplefor the carethat mustbe takenby the purveyors of "democracyassistance." Theseriesof electoralcommissionsthatestablishedthe country'selectoral systemwere careful to avoid democraticstructuresthat might exacerbate

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the nation'sethnic divisions. For instance,single-memberconstituencies wereconsideredbut weredroppedwhenit wasrealizedthat Hinduswould be overrepresented. Likewise, the Muslim communitypressedfor a consociationalsystemof separatevoter rolls with a certain numberof seats held for each community, but this idea was also abandonedas planners wereconcernedwith promotingnational unity,not preservingexistingdivisions.Thus,theparliamentarysystemin Mauritius wasdeliberatelystructured in a modified consociationalfashion,with a nod to ever-presentethnic concerns. The systemcontainedtwenty districts with three membersfrom each district and an additional two from the island of Rodriguez.[A]dditional seatswereallocatedto "bestlosers"in orderto ensurerepresentation from all the country'smajorethnicgroups.Theeight allocatedseatsalsomakeit moredifficult for oneparty to gain a majority of seatsthroughvotesalone, since more than 10 percentof seatsare reserved.They thus encourage partiesto run in coalitions.Membersareelectedthroughfirst-(three)-pastthe-postrules,which impededfragmentation,eventhoughwith low entry barriers numerouspartiesput up candidatesand have a chanceas "best losers."Finally, as in Japan,the systemtendsto give somewhatdisproportionatepower to rural districts with lower population than to urban districts.85 Also like Malaysia, successiveMauritian governmentshave pursued export-leddevelopmentalong with compensatorypaymentsand safety nets for segmentsof the populationwho havenot benefittedequally in thecountry's Africa. Soundgrowthrise to secondhighestpercapitaincomeof sub-Sahara enhancingpolicies have enabledMauritius to afford the fiscal costsof the compensatoryand safety-netexpenditures.Unlike Malaysia, however, the Mauritian compensations havebeenfunctionally based(e.g.,for unemployed youth, or small-scalesugarproducers),not affirmative action systemsthat would favor anyoneethnic community over the others.The exigenciesof coalition politics ensuredthat parties and governmentsavoided policy extremes,whetherdefined as Left or Right, or favoring one economicclass over anotheror one ascriptivegroup over another.In an election in 1995,one party that departedfrom this patternlost heavily after playing the ethnic card. Accordingto DeborahBrautigam(1997),severalinstitutionalfactorshave contributedto the ability of the political systemto avoid polarization.There areeffective arrangements for policy dialoguebetweengovernmentandrepresentativesof businessand organizedlabor. Thesehave enabledthe governmentto obtainprivate-sectoragreementto austeritypoliciesduring periods of economicstress.Such agreementshave given governmentthe room "to adjustmore rapidly than otherAfrican countriesto externalshocksand high

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levelsof debt while keepingcoalitionstogetherthroughjudicioususeof side paymentsto the most vocallosers."86At bottom,the society'sability to sustain nonviolentdisputeresolutionhasrestedon its institutionalizedprocesses andpreferencesfor elite power-sharing.Mauritius,andSenegalandBotswana, have demonstratedhow elite coalitions (or polyarchies)are more inclined than hegemonicregimesor permanent-majoritydemocraciesto accommodateethnic groupsin the interestsof nationalunity. DonaldRothchild(1997) attributesthis inclination to pragmaticelites' preferencesfor "cooperative types of encounters,"and to their perceptionthat conflicting claims can be reconciled.87 If such arrangementsdo not unravel and give way to ethnic hegemony,they provide a growth-enhancingcontext in which the international agenciescan contributeeffectively to a country'seconomicdevelopment,andpossiblyhelp strengthenthe underlyinginstitutional arrangements and the empirical basissupportingthe generalperceptionof intergroupdistributional equity within the country.

Notes 1. NafzigerandAuvinen, 1997,p. 35. 2. LawrenceZirling, Bangladesh:From Mujib to Ershad. Dhaka,Bangladesh: University Press,1994,pp. 4-7. 3. MasonandAsher, 1973,pp. 666-667. 4. Ibid., p. 671. 5. Ibid., p. 673, footnote24. 6. Ibid., p. 675. 7. Ibid., p. 675. This accountand interpretationof the World Bank'sexperience with respectto PakistanlBangladesh is reconfirmedin the recent,andsecond,history of the Bank by JohnLewis et al. 8. The two previousparagraphsdraw on personalcommunicationswith former USAID missiondirectorsMauriceJ. Williams and Joseph C. Wheeler,and with Eric Griffel andTownsendSwayze,USAID officials at the time; andon an interview with Wheelerin the U.S. ForeignAssistanceOral History Program,Associationfor Diplomatic StudiesandTraining,Arlington, VA, 1998. 9. Agency for InternationalDevelopment,The Use of Program Loansto InfluencePolicy. EvaluationPaperlA. Washington,DC: USAID, 1970,p. 15. 10. See,e.g., the exhaustivefive-volume study by evaluationteamsfrom several OECD donors: The International Responseto Conflict and Genocide:Lessonsfrom the RwandaExperience.Copenhagen:The SteeringCommitteeof the Joint Evaluation of EmergencyAssistanceto Rwanda, 1996. Seealso Uvin, 1998, and World Bank,1998. 11. World Bank, 1998,p. 86. 12. Tor SellstromandLennartWohlgemuth,"Study 1," p. 12, of TheInternational Response. 13. "The notion that the differencebetweenHutu andTutsi is a racial oneprobably datesfrom the colonial period, when the Hamitic hypothesiswas introduced.However . . . the imagesof social and moral differentiation in all likelihood predated

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colonization."Theseimagesenabledthe so-calledHutu social revolution of 1959to 1962to takeplace.The 1957Hutu Manifesto,written by a groupof Hutu intellectuals, "statesthat 'the problemis basicallythat of the monopolyof onerace,the Tutsi ... which condemnsthe desperateHutu to be forever subalternworkers.' In return, the circle of notablesaround the Tutsi king wrote that there could never be fraternity betweenHutu and Tutsi, for the Tutsi had conqueredthe Hutu and the latter would alwaysbe subservient."Uvin, 1998,p. 31. 14. Leo Kuper, The Pity of It All. Minneapolis: University of MinnesotaPress, 1997,p. 106, cited in Uvin, 1998,p. 36. 15. GerardPrunier,The RwandaCrisis, 1959-1994:History ofa Genocide.London: Hurst and Company,1995,pp. 4, 248. Cited in World Bank, 1998,p. 87. 16. World Bank, 1998,p. 91. 17. Ibid., p. 92. 18. Ibid., pp. 84-85. 19. Ibid., p. 111. 20. Uvin, 1998,p. 44. 21. Ibid., p. 113. Italics in original. 22. Ibid., pp. 113-114. 23. Ibid., p. 115. Italics in original. 24. Ibid., p. 118. 25. Uvin, 1998,pp. 109-110. 26. Ibid., p. 229. 27. Ibid., p. 230. 28. Herring, in EsmanandHerring, 2001,p. 140. 29. Little, 1994,p. 74. 30. Herring, in Esmanand Herring, 2001,p. 155. 31. Ibid., p. 163. 32. USAID cancelledthis project in its fourth or fifth year after two American technicianson the projectwerekilled in Jaffua. 33. Herring, p. 148. 34. Thedescriptionof the Gal Oyaexperiencehereis drawnfrom NormanUphoff, 1992,and from conversationwith Uphoff in November1999.Uphoff was a member of the Cornell University groupthat providedtechnical assistance for this rehabilitation. The technicalaspectsincludedirrigation methods,crop protection,and marketing. 35. Uphoff, 1992,p. 6. 36. Ibid., p. 31. 37. Ibid., p. 8. 38. Ibid., p. 76. 39. Ibid., p. 345. 40. Uphoff, personalcommunication,November1999. 41. For example,seeAlbert O. Hirschman,1984. 42. This accountof the Mawaheli GangaDevelopmentProgramdrawsin part on World Bank, 1998,Vol. 5, pp. 134-137. 43. Little, 1994,p. 85. 44. World Bank, 1998,p. 135. 45. Little, 1994,p. 86. 46. World Bank, 1998,p. 145. Italics added. 47. MasonandAsher, 1973,pp. 429-430.

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48. The country'sfull nameis BosniaandHerzegovina.We useBosniafor convenience. 49. Woodward,1995,p. 37. 50. Ibid., p. 40. 51. Ibid., p. 18. 52. Ibid., p. 15. 53. Ibid., p. 19. 54. Ibid., p. 50. 55. Ibid., p. 57. 56. Ibid., p. 383. 57. Ibid., p. 384. 58. Ibid., p. 22. 59. Horowitz, 1985,p. 582. 60. From the SecondMalaysianPlan, cited by Snodgrass,n.d., from whom the NEP detailsherehavebeendrawn. 61. "In Malaysia... enforcementof ethnicidentity hasbeenmoreimportantthan economicspatialallocation.Thus the promotion of Kuantanon the EastCoastas a counterbalance to spatialconcentrationon theWestCoasthasbeendriven moreby an ethnic than a spatial goal. (Kuantan is in a Malay-dominatedregion.)" Harry W. Richardson,City SizeandNational SpatialStrategiesin DevelopingCountries,World Bank Staff Working PaperNo. 252, April 1977,p. 37. 62. Cited in Snodgrass,n.d., pp. 2-74-2-75. 63. Ibid., p. 77. 64. Far EastEconomicReview,May 20, 1999,p. 46. 65. New York Times,August 13,2000,p. 8. 66. Far EastEconomicReview,September21,2000,pp. 32-36. 67. Unemploymentwas higheramongthe Chinesethanthe Malaymales,but relatively lower for Chinesefemales.SeeDipak Mazumdar,The MalaysianLabor MarketsunderStructuralAdjustment,1991,WorldBank, WPS 573. 68. Horowitz, in Montville, 1991,p. 458. 69. CharlesF. Keyes,Thailand: BuddhistKingdomasModemNation-State.Boulder, CO: WestviewPress,1987,pp. 134-135. 70. For example,Brogan'sencyclopedicreview of aboutsixty countriesinvolved in all the wars since 1945 hasno sectionon Thailand.SeeBrogan, 1998. 71. In additionto Keyes,seethe classicaccountsof William G. Skinner,Chinese Society in Thailand. Ithaca, NY: Cornell University Press,1950; and Richard J. Coughlin,DoubleIdentity: The Chinesein ModemThailand.Hong Kong: Hong Kong University Press,1960. 72. Keyes, 1987,p. 108. 73. World Bank, A Public DevelopmentProgramfor Thailand. Baltimore, MD: JohnsHopkinsUniversity Press,1959. 74. For an accountof the evolutionof Thai elite thoughton economicgovernance over this period, seeMuscat, 1994. 75. SeeMuscat, 1990,pp. 99-101,for a discussionof theseprojects. 76. RobertJ.Muscat,Lam Nam Oon: An Irrigation andAreaDevelopmentProject in Thailand. USAID, Washington,DC: 1982. 77. For example,seeMuscat,1990,ch. 5, or SomboonSuksarnram,Political Buddhism in SoutheastAsia. New York: St. Martin's Press,1977,ch. 3. 78. Suksarnram,1977,pp. 58-62.

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79. Muscat, 1990,pp. 177-178. 80. This accountof Bhutandrawson Leo E. Rose,The Nepali Ethnic Community in the Northeastofthe Subcontinent,preparedfor a conferencein Colombo,Sri Lanka, 1993,and on personalconversationwith Rosein late 1999. 81. For an accountof the implementationof the aid role in Mozambique'simmediatepostconflictperiod,seeKimberly Mahling Clark, Mozambique'sTransitionfrom War to Peace: USA/D'sLessonsLearned.Washington,DC: USAID, 1996. 82. "It is the ultimateposterchild of goodeconomicmanagement."Mark Maloch Brown, administratorof the UN DevelopmentProgram,New York Times,April 30, 2000, p. 9. 83. New York Times,August 17,2000,p. A6. 84. AbrahamssonandNilsson, 1996,pp. 19-20. 85. DeborahBrautigam,1997,p. 53. 86. Ibid., p. 56. 87. Rothchild, 1997,p. 43.

3. Developmentand Conflict Connections and Precursors

Tolstoy beginshis novel AnnaKarenina with the assertionthat "Happy families are all alike; every unhappyfamily is unhappyin its own way." Every unhappyconflicted country becomesunhappyin its own way. While there havebeenenoughcommonalitiesto give rise to generalconflict theories,the differencesamong,andthe complexitiesof, large-scalestruggleshavegiven rise to great variety amongthesetheories.In this chapterI review different approachesstudentshave takento identify the sourcesof conflict in developing countries,and the systemsthat have beendesignedto give advance warning. Development,Aid, and Conflict: The PeacePresumption Becausethe principal businessof the internationaldevelopmentagenciesis economicdevelopment,an examinationof the possiblerelationshipsbetween developmentand conflict is a logical placeto begin. It shouldbe noted,for clarity, that theseagenciesare commonly involved in activities that can be groupedunder differentiating terms, while all broadly contributing to "development"-economicmanagement(e.g., anti-inflation stabilization);economic growth (e.g.,investmentin infrastructure,to promotematerialor GDP expansion);socioeconomicgrowth (e.g., investmentin health); sustainable development(factoring in environmentalprotection);economicgovernance (institutions and governmentprocessesthat comprisethe framework for economicactivity). The efforts of some developmentagenciesto promote and supportpolitical democracyalso are relevantto economicdevelopment, evenif that is not their primary rationale.Given this heterogeneityof objectives and activities, it is not surprisingthat explanationsof causalrelationshipsbetween"development"andviolent conflict, andby implicationbetween the work of the developmentagenciesand conflict, have also been very diverse. Developmentagencieshavetraditionally acknowledgedthatdevelopment createstensions,producesgainersand losers,and changesestablishedroles and relationships.But therehas beenat leastan implicit consensus,and explicit justification given to legislatorsin annual budgetprocessesin donor countries,that developmentis on balancea positive processfor both donors 103

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and recipients-positivefor its long-run economicbenefitsand increasesin living standards,andfor the presumedassociationamonghigherliving standards, the developmentof democracy,and a decline in the incentivesand willingnessof electoratesandgovernmentsto resortto violencefor the settlement of interstatedisputes.The presumptionthat economicdevelopment producespeace,or is at leasta necessarycondition for peace,hasbecomea journalistic commonplace. Soon after World War II, the connectionbetweendevelopmentand conflict wasthe essentialjustification in the United Statesand many otherdonor countriesfor initiating concessionalaid to developingcountries.Beginning with the Greek-Turkeyaid programsand Point Four during the Trumanadministration,the improvementof living standardswas viewed as critical for winning the "heartsandminds" of populationsthat might otherwise,spurred by economichardshipanddiscontent,transfertheir loyaltiesto political forces whosechallengesto the social orderwere endorsedor actively supportedby the Soviet Union or its Cold War allies. In the United States,legislativeandprogrammaticdistinctionsweremade between(nonmilitary) aid (so-calledsecurity assistance)to supporta governmentof a countrythat was an active or potentialtargetof insurgencyand subversion,and economic aid (and technical assistance)designedto promote generalcivilian development(so-calleddevelopmentassistance).Economic aid for securityoften took the form of straightbudgetsupportor the financing of security-relatedinfrastructure;developmentaid normally financedprojectsfor economicinfrastructure,institutional development,expansionof health and educationsystems,and other sectoralprogramsthat had little or no direct securityjustification. Becauseforeign policy concerns havealwaysbeena majordeterminantof the country allocationof American aid, the distinction betweenthe (nonmilitary) securityand developmentcategorieshasbeenone of form and modesof managementand implementation, not essentiallyconceptual.Thus, over the courseof the Cold War, both a successfuldevelopmentprocessand the aid supportingthat processwere viewed as major instrumentsfor helping governmentswin internal conflicts arising from violent challengesfrom the Left (or, evenif essentiallyethnic, challengesthat could be capturedby the Left). They were seenas helpingto weakenpotential supportfor insurgenciesby reducingdiscontentand convincing peoplethat they had realistic prospectsfor rising living standards. Although it is not the subject of this book, it is important to note the increasingrecognitionthat the characterizationof someof the insurgencies as falling into a general worldwide pattern of Soviet-bloc inspiration and stalking horseswas simplistic. The rootsof someconflicts, on both the challenger and governmentsides,were essentiallylocal, with the linking up to

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one major power sponsoror anotherbeing opportunistic.The country allocation of Soviet-blocaid, very different, of course,from that of the Western bilateral developmentprograms,reflectedassumptionssimilar to thosedriving Western aid, namely that aid would help win or sustain a recipient government'sfriendly or allied inclination to the donor, and that development would lessenthe risk that sucha (hopefully allied) government(andits foreign policy orientation)would be internally threatenedby economicdiscontent. In the searchfor an understandingof internal conflicts, scholarswith different perspectivesor disciplineshavefound many roots and underlyingand proximatecauses--economic, environmental,cultural, institutional, social, of internationalpower political, religious-in addition to the consequences politics, andof the ambitions,honestintentions,geopoliticalcalculations,or idiosyncrasiesof powerful elites and individuals. There exists no satisfactory generalanalytic frameworkthat can integratethe disciplinary perspectives, certainly no framework that can attribute relative and measurable weightsto thesemany roots to produce,in any individual caseat particular points in time, a warrantedprediction that violent conflict is likely to occur. Even when the assembledevidenceand scholarlyattentionon a pastconflict is massive,as in the caseof World War I, for example,thereremain differencesof interpretationregardingthe causesof the conflict and the weights that shouldbe attachedto thesecauses.In microscopicexaminationsof the eventsleading up to the outbreakof many conflicts, scholars(such as 1.M. Robertsor BarbaraTuchman,in the caseof World War I) can usually identify many turning points in the monthsand daysbeforewar broke out when decisionstakenby individual principals,who hadauthorityto chooseamong alternativecoursesor even simply next steps,might have avoidedthe conflict altogetherif they had taken one of the alternatives. At a high level of generality,then, high-intensityconflicts can be seento arise from the interactionof economic,social, and other factors and forces, with elites who are in a position of responsibilityand authority to copewith theseforces, either opportunisticallyor for the generalgood as bestas they can discernit. The rarity with which twentieth-centurydemocraticsocieties have initiated aggressivewars, or experiencedcivil war, has been pointed out by many scholars.Authoritarian statesare vastly more exposedto the personalidiosyncrasiesand calculationsof relatively unfetteredindividual leadersor tiny juntas.However,evenunderpolitical systemswhereelitesor individual leadershave considerableauthoritarian powers,the prevailing economicand social circumstancesmay go far to determinethe available options and the inherentstability or instability of the body politic, and the incentivesand openingsavailablefor opportunistic dictatorsor "ethnic entrepreneurs."An instructiveandextraordinarilydetailedexampleis provided

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by Paul Brass(1997) in his examinationof interethnicviolencein India. Of the five casesBrassexploredfirsthand,it was unclearif not doubtful that the original incident (e.g., the theft of a reveredvillage idol) behindthe subsequentviolencehad any ethnic or interethniccharacteror component.As police and political figures from the village on up the administrativehierarchy to national governmentlevels were drawn in to determinethe "facts" and interpret (better: "spin," in currentAmerican usage)eventsfrom their own interestperspectivesand for local and larger political agendas,the incidents were paintedas essentiallyethnic or caste-driven,adding further "demonstration" and exacerbationto the generalproblemsof communalrelationsin Indian societyas a whole. Brassshowshow collective violencecan emerge or be deliberately generatedfrom even localized, small events, when the wider social contextcontainspotentialitiesof collective antagonism.Events and developmentpolicies and programscan easily be insinuatedinto the contextof underlying social conflict even if theseeventsand programsare inherently conflict-irrelevant. The assumptionthat societiesand statesare lesslikely in the long run to be proneto internal conflict (or susceptibleto calls for overturningthe social order)if they enjoy economicdevelopmentwas a generalizationof the highestorder, one of those"obvious" truths that are more an object of faith than a conclusionfirmly groundedin historical analysis.The assumedrelationship also lackedprecisionin its formulation. Is the relationshipdynamic or static-thatis, doesdeclining risk of violent conflict suddenlykick in when somelevel of incomehasbeenreached?Or is declinea function of the rate of economicadvance?Or of a perceivedrate of improvement,or a period of improvementlong enoughto createexpectationsthat improvementwill continue? Does the link betweenmaterial circumstancesand grievancelevel hangon the relative economicpositions(or ratesof change)betweendifferent ethnic groups?Or are the potentially invidious comparisonsof significancerelated to specific economicfunctions or kinds of wealth (say, land areastraditionally occupied),rather than comparisonsof conceptualeconomic aggregates? Even if developmentand improvementin living standardshavebeensustained for a long period of time, can a sharpbut relatively brief economic reversal,stemmingfrom an externalshock(say, an export marketcollapse), bring on severeconflict despitethe precedinggrowth? Quantitativestudies of the correlatesof violent conflict have been limited to the modern era, sinceWorld War II; is the modernerafundamentallydifferent from previous history, or is it legitimateto test recentstatisticaltendenciesagainstnot-toodistantpastconflicts? (For example,the United Stateson the brink of civil war in the mid-nineteenthcentury was a relatively high-income,ethnically

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very diversedemocracy,conditionsthat are statistically strongly associated with absenceof civil conflict. Would democraticSpain have avoidedcivil war in the 1930sif per capitaincomehad beenmuch higher?Not likely.) The studyof the relationshipsbetweendevelopmentandconflict is fraught with additional ambiguities.The terms "development"and "conflict" mean different things in the handsof different authorsand in the treatmentof different disciplines.As usedin economics,developmentwas for many yearsa relatively limited and preciseconcept.The presenceor absenceof developmentin any period was indicated(and could be measured)by the rise or fall of GOPand incomeper capita.The anatomyof developmentin any country could also be measuredagainstpatternsof changeobservedin the experienceof the "more developed"or industrially richer countries:the changein sectoralcompositionof economicoutput and of the labor force, the rise in worker productivity and increasein capital stock per worker, the increasing contribution of specializationand trade, the increasein investmentand researchexpenditure,the financial "deepening"of the economyand the expansionin bankingandfinancial servicesfunctions,andso forth. Therewere alwayscomplicationsand debates,of course-forexample,over the role of populationgrowth, or the costs and benefits of new industry protection at early stagesof growth, or the proper role of governmentas a stimulant or designerof industrial development.But asa processbringing aboutlong-run accumulationof capital and increasesin the resourcesand wealth available to a country, modern developmentwas judged, almost universally, to be a desirableprocess,historically unprecedented for its ability to raisehumankind from the conditionsof impoverishment,poor health and short life expectancy,illiteracy, and limited mobility and options in which most people had lived in all previousperiods. The bloom beganto fade in the 1970s.Until then, most economistssaw developmentas a macroeconomicprocess.The professionhad focusedon developmenttheory and developmentplanning.In the mid-1960s,a conferenceof leadersin this field reviewedthe "most advancedand fruitful techniques,both theoreticalandapplied,availablefor analysisof the development processin the emergingnationstoday." In the studiespresented,no mention was madeof "poverty" "inequality," or "distribution."} When databeganto emergein the 1970srevealing that in many developingcountries(perhaps half of thosewith comparabledata)incomedistribution was worsening,and that in some(a minority of the countries,but including India) the numbersof peoplein absolutepoverty had increaseddespitegrowth in per capitaGOP, the focus of the professionshifted. Spearheaded by Latin American economists, the 1970salso saw a major intellectual and diplomatic challengeto the internationaleconomicstructurefor its allegedlydeliberatebias in favor

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of the advancedindustrializednations,especiallythe United States.The call for basicrevision of the internationaleconomicrules of the gamewas taken up by leading developingcountries,embodiedin a programfor a "New InternationalEconomicOrder." But in responseto theseconcernsefforts were madeto redefinepolicies and to changeeconomicstructures,not to jettison the basicconvictionthat developmentshouldremainan overridingdesirable objectiveof modemgovernment. Attacks of different sorts on developmentitself beganto emergein the 1980s.One schoolcriticized developmentfor causingenvironmentaldegradation or "ecocide."Many of the concernsraisedby this perspectivewere warranted,indeedoverdue.Environmentaldegradationin many forms and placeswas recognizedas a concreteoffset to development,diseconomies that neededto be seenas reducingmeasurable economic product,undercutting in somecircumstancesthe sustainabilityof the developmentprocess, and requiring new perspectivesand new policies and program measures. The extremeattackon development,however,asa heedlessprocessthat was creatingpossiblecatastrophicor self-destructiveresults,and that as a minimum would run up againstresourcelimitations that would stop the whole developmentprocessworldwide, has attractedfew adherents.Locallimitations on water supply or arableland, in relation to the demandsplacedupon them,arecertainlyrealitiesin many areas,but no global resourcelimitations have yet materialized.Artificial shortagesthat appearto threateneconomic growth may be imposedfrom time to time on individual commoditiesopen to cartel arrangements.But even the most successfulcaseto date, the oil cartel'sproductioncutbacksin the 1970s, wasof short duration. Although the hugejump in petroleumpricescausedwidespreadinflation and put great economicpressureon the world's poorer and poorestcountries,it also induceda large expansionin oil explorationand the openingof new fields not underthe cartel'scontrol. Petroleumpricessubsequentlyfell to levels lower than thoseprevailingbeforethe 1970soil shock,but they remain vulnerable to manipulationwhenthe major producersdecideto cut productionandmaintain the necessarydiscipline. A nearconsensusof scientific opinion assertsthat global warming is under way and that gasesreleasedby humanactivity are a major factor. Global warming is expectedto affect different partsof the planetdifferently, cause substantialchangesin weatherpatterns,and bring abouta significant rise in sealevels, affecting low-lying regions where major populationconcentrations occur. Large-scaleshifts in the location of much economic activity, especially agriculture, maybe unavoidable.There would be winners and losers. But in the time frame of theselong-run trends, successfulsocieties will haveaccumulatedlargeresourcesto help themcope,and the continuing

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advanceof knowledgeandtechnologywill likely increasethe flexibility and capabilitiesof humankind.In otherwords, the bestdefenseagainstdeleterious global environmentalchangeis further economicand technologicaldevelopmentand flexibility that will increasethe capacityof humansto make the necessaryadjustments,suchasinternationalagreementsto reducegreenhousegas emissions. If adequateadjustmentsare not made,it is not difficult to foreseerelatively precipitouswarming emergingas a wholly new and powerful source of conflict in the not very distant future. For example,low-level migration from denselypopulatedBangladeshis alreadyan unsettlingproblemin the northwesternpanhandleareasof India. A rise in sea level could push the coastlineof the Bay of Bengal deepinto Bangladesh,drowning large areas that are now supportinghuge numbersof people. If outmigration is not a feasible safety valve, Bangladeshcould face intenseinternal competition andconflict overits diminishingarableland.Dutch solutionsto seaencroachmentthat might be feasiblefor littoral areasof wealthy countriesmay not be feasiblefor developingcountriesthat do not makesubstantialeconomicand technologicaldevelopmentin the next few decades.In short, the high levels of developmentand the technologiescurrently in usein the major industrialized nations of the world could (if insufficiently adjusted)causeimmense problemsfor relatively poorcountriesthat sufferfrom a combinationof high weather-changeand/or sea-riserisk on the one hand, and inadequateeconomic and technical adjustmentcapacityon the other. The developmentof the winners,insteadof helping to pull the exposeddevelopingcountriesup out of poverty,would be generatingvast new obstaclesfor the losers.Rather thandraw out scenariosofthe possibleinstabilitiesandconflicts,which would take us far afield, we leavethe subjectherewith the hopethat realizationof such potentialitieswill bring the internationalcommunity to agreementon an effective avoidancestrategy. Development-ConflictConnections:Exacerbationor Amelioration? In the limited literature on the relationshipsbetweendevelopmentand conflict, one finds a common view that development,on balance,has exacerbatedratherthan amelioratedconflict. If valid, this would be a defectmore gravethan ecocide,given the fact that the conflicts within developingcountries have occasionallytaken the form of genocide,have sometimeslasted for long periodsand causedheavy casualties,and have often triggeredextensiveeconomicdamageand wiped out yearsof economicand social advance.In this view, the recenthistory of developingcountrieswould run as

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follows: colonial containment/suppression of internal conflicts, andcreation of unequalstatusamong diverse ruled groups; initiation of self-rule, independentpolitics and economicdevelopmentand "modernization";deepening of (andcreationof new) internal divisions and competitionfor economic assetsandoverthe policiesandfruits of development;failure of the polity to developmutually acceptablealternativepolicy sets;descentinto violent conflict; large-scalehumanand physicalcapital destruction,wiping out muchof the accumulateddevelopment.Economic developmentwould be an inherently self-destroyingprocessfor the largegroupof countriesrecentlyemerged from colonial status.Such a paradigmwould also put a heavy burden of responsibility, even if inadvertent,on the internationaldevelopmentagencies helping to promoteand finance this development. Scaleand virulence obviously must be taken into accountin attempting any judgment.Economicdevelopmentunavoidablyhas differential effects among all populations.At any point in time, recentchangesand outcomes will have producedrelative winners, relative losers,and absolutelosers.If resulting tensionsand perceptionsof injustice are playedout in a contextof inclusivepolitics andpolicy adjustments,to ensurethat loserscanhavecredible expectationsof betterfuture outcomes(or at least"fair" chances),then conflict canremainnonviolent,nonchallengingto the legitimacy of the state, nondemonizing,nonessentialistin character.In sucha context,development canbe seenasa processthat in its dynamismgeneratesmaterialadvanceand continuousunderminingof any statusquo, a processnot ineluctablyleading to large-scaleviolence and self-destruction,but rather openingup an array of potentialoutcomesdepending onthe political systemand political leadership underwhich economicactorsgo abouttheir business. Somelosershaveno expectationsof inclusion or justice. If they are marginal in numbersandlocation (e.g.,AmazonianIndian tribesin Brazil whose traditional lands are lost to developers,or "tribals" displacedby irrigation projectsin India), their discontentis unlikely to developinto high-intensity conflict that challengesthe state. The World Bank has succumbedto criticism over projects(mainly irrigation and roads) that have resulted in involuntary displacementof "indigenous"or "tribal" peoplewho do not wish to move or who havebeengiven alternativeland or monetarycompensationas an incentivewhich the recipientsconsiderinsufficient. Although the World Bank hasdevelopedpolicies aimedat ensuringmore equitableoutcomesin casesof displacement-ithas hired anthropologiststo examinesuch situationsbefore projectsare locked in, and hasretreatedfrom projectsthat threatenedto haveinequitableconsequences-implementation results have been mixed. It is ironic, however, that the developmentagencieshave focusedtheir responseto situationsin-

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volving threatsto the most powerlessand marginal groups,therebygarnering critics' approval,while paying relatively little attentionuntil recentlyto the inequalitiesand exclusionsaffecting large, nonmarginalascriptive minorities.As our subjecthereis conflict, not developmentaljusticein general, we will not focus on the problemsof excludedmicro-groups.There have beencaseswe needto examinebelow, however,wherepresumablydevelopment-enhancingpopulationmovementsand resettlementshaveexacerbated, or threatenedto exacerbate,interethnicrelationson a scaleclearly relevant to intenseconflict potentiality. Many scholarsseeincreasingcomplexity and differentiation of interests andassociationsas one of the mostpowerful productsof economicdevelopment conduciveto a gradualwaning of ascriptivebasesfor conflict. Development tends to vitiate one- or two-dimensionallycharacterizedidentity. Peoplewhosetraditional senseof identity and self-interesthad derived almostentirely from their ethnicgroup membershipbeginto seethemselvesas havingnumerousnonascriptivecharacteristicsandinterests.As development drawseverlargernumbersof peopleinto multiple affiliations, they find themselvesallied in crosscuttingrelationshipswith peopleof other ascriptiveor classidentity with whom they may havehad no previousrelationship,or no relationshipof commoninterest,or toward whom they might havehad only negativeand prejudicial feelings, beforethe developmentprocessbeganto shakeup their traditionalcircumstancesandworldview. Studentsof ethnicity and the politics of ascriptivelydivided societiesstressthe increasingrisk of violent conflict, the greaterthe extentto which ascriptivedivision coincides with economicandotherdivisions within a society.Theobverseof this proposition is that the risk of violent conflict shoulddiminish as otheraffiliations that cut acrossascriptive lines emergewith increasingsalience.And it is preciselymoderneconomicdevelopmentthat most powerfully proliferates sourcesof identity. arraysof affiliations and heterogeneous Not surprisingly when dealing with macro generalizationson the incentive structuresandbehavioraldynamicsof massesof peoplein many different societies,there are other scholarswho doubt the empirical validity or forcefulnessof the propositionthat developmentreducesconflict by creating complexand offsetting interestsand loyalties. One counterargument assertsthat ethnicity is unimportantas a sourceof antagonismin premodern societieswhere life is geographicallylimited and identity is basedon kinship. It is only when developmentwidensthe economicand social scopeof life and createscommonalityof valuesand wants that ethnic solidarity becomesa tool in a widening competitivearena.2 Even if this propositionis true, however,it doesnot follow that higher risk of conflict is an inevitable result. Ethnic solidarity organizationslike languagesocietiesand chambers

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of commerceamong the overseasChinesein SoutheastAsia servedas an early form of civil society,mediatingbetweengovernmentand the Chinese minorities in a constantsearchfor accommodationand social tranquility. In urban areas,ethnic networks can help migrantsfind housing and employment, thereby easingthe transition from traditional agriculture to modem wage-labor. Donald Horowitz cites many examplesof differential responsesto the opportunitiesopenedup by economicdevelopment,with manygroupsjudged to be backward,allegedly suffering from a set of valuesand behaviorpatternsnot consistentwith the requirementsfor material advanceundermodemdevelopmentconditions.3 In virtually everysocietyonefinds ethnicgroups stereotypicallycharacterizedas lazy, unintelligent, inefficient, and lacking initiative. More advancedor dominantgroupsmay be characterizedas aggressive,enterprising,intelligent, frugal, and betterorganizedfor collective advancement.It is also commonfor the backwardgroup to sharethe invidious characterizationof themselves,althoughthey may seesomeof the characteristicsaspositive,astraditionalelementsof a culturewith its own superior values.Thereare also many examplesof groupsthat have undergonerapid changesin valuesas part of a successfuladaptationto and participationin modem development.Nevertheless,it is undeniablethat different groups may be more or less favorably situatedat the start of the developmentprocess,with different endowmentsof location, resources,or a favored or subordinatedhistory undera colonial administration. The idea that someculturesare inherently more compatiblethan others with the requirementsof modemdevelopmenthas a respectablehistory of its own. Although the modemdevelopmentof countrieswith predominantly Catholic (or Buddhist) populationsundercutsany modemrelevanceof Max Weber'sthesis that the "Protestantethic" was more suitable for capitalist developmentthan the Catholic (or other economicallynonaggressivereligions), there are many examplesof groups still immersedin cultures that teachprescientificconceptionsof the world, inculcatedistrustof all who are outsidenarrowcirclesof kinship, penalizeindividualismandnonconformity, or constrainindividual economicmobility by sanctioningrigid social stratification. The developmentprocessmay well work to the disadvantageof suchgroups.Thereare also many examplesof (often immigrant) minorities, such as Lebanesein parts of Africa, who have concentratedin providing marketing servicesfor largely agricultural indigenouspopulationsand are therebypositionedto take more aggressiveadvantageof the diversified opportunities offered by economicdevelopment.If we label the relevant attributesof suchminorities (commercialacumen,financial risk-taking, urban orientation,etc.) as "cultural" characteristics,then thesegroupscan be de-

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scribedasbearersof a culturemorecompatiblewith, or efficaciousfor, modem 4 economicdevelopment. Eric Nordlinger (and othershe draws upon) seeslittle evidencethat the loyalties, arising in the courseof economicdevelopment,to sharedaffiliations otherthan ascriptive(i.e., otherthan race,language,ethnicity, religion) have had enoughsalienceanywhereto offset the power of the ascriptive. Evenif they had suchsalience,the groupsin questionwould haveto feel (or be "triggeredby") the power of theseoffsetting affiliations simultaneously with the calls to ascriptiveloyalty for the latter to be offset effectively. Some experience(from Nigeria of the early 1960sin this case)demonstratesthat groupscan compartmentalizetheir interestsand loyalties, coalescingacross communallines for someeconomicissuesat sometimes, but revertingback to their primordial communal(tribal in this case)identitiesafter the secondary associationepisodehas passed. Belgiumpresentsan evenmorestriking contradiction.For approximately the first 120 yearsafter Belgium achievedstatehood,the economicallyand politically disadvantagedFlemings acceptedthe basic national goal of "Belgianization"asdefinedby the Francophone Walloons,althoughnot without resentment,including the adoption of French as the ticket for social mobility. Belgianization,coupled with the more rapid industrial development of Wallonia, "led to reinforcing (rather than crosscutting)relationships among the socioeconomic,religious and ethnic cleavages."sBetween the ethnoregionallydualistic characterof Belgian economic development, and the ability of the Francophonesto co-opt and acculturatemany of the Fleming elite, developmentdeepenedthe ethnic division. The Fleming responseto this patternof relative economicexclusionemergedearly, in the 1850s.But ratherthan challengingthe legitimacy of the state,the Flemings employedpolitical and economiccollective action to achievegradualgains in representation andeconomicstrength,a strategy facilitatedby the conflictmanagementorientationof the state.Although this collective action was being pursuedby Flemings, "ethnic relations were rarely addresseddirectly and never in a concertedfashion until the rapid, quite suddenrise of the cleavageto saliency,between1958 and 1961."6The ethnic cleavagearose, paradoxically,from the fears of the Walloons after World War II that they weresuddenlydescendinginto economicandpolitical declinecomparedwith the Flemings. The old industrial structureof Wallonia emergedrelatively undamagedfrom the war, but obsolete.Flanderswas now betterpositioned for postwarindustrial development.Underthesereversedfortunes,new ethnic political partiesemergedand "Belgianization"collapsedas the national project. Rather than separating(or fighting), the two Belgian wings redesignedthe state,creatinglanguage-based regionswith substantialautonomy

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and a structurerequiring a completelynew form of political interaction. In sum, the Belgian experienceup to World War II appearsto be a case that turns Nordlinger's generalizationon its head.Although development long reinforcedthe ethnic divide, the historic Fleming responsewas collective action within the institutions of industrialization(e.g., collective bargaining), withoutfalling back on ascriptiveidentity as a mobilizing concept embracingthe entirety of their dissatisfactions. In the contextoftoday'sdevelopingcountries,the deniersof development's salienceappearto havefallen into a circular argumentthat missesthe essential point. Nordlinger sumsup the argument: When the requirementsthat contradictoryvaluesbe of nearly equal salienceandalmostsimultaneouslytriggeredareadded,thehypothesisgains in plausibility but losesin scopeof applicability. In fact theremay be very few societiesin which theseand other aspectsof the explanatoryvariable are found together.Yet this problemwould not be crucial were it not that the hypothesis'scopeis reducedpractically to the vanishingpoint when applied to deeply divided societies.... Such societiescontain very few crosscuttingloyalties,values,issuesor groupmemberships;politically relevantdetachmentsalmostalwaysform a mutually reinforcingpattern.7 The circularity is obvious:the experienceto dateof thesesocietiescannotbe cited as evidenceagainstthe crosscuttinghypothesissincecrosscuttingsocial formations have not yet emerged.In other words, economicdevelopment and modernizationhave not yet advancedto the point where the hypothesiscan be appliedor tested. Nordlinger cites Northern Ireland as a casewhere industrializationhas takenplacebut whereclassloyalties are not strongenoughto cut acrossthe religious lines of conflict. But surely there are also countriesand ascriptive groups where historic ethnic divisions remain unmistakableas sourcesof separateidentitiesbut wherethe salienceof crosscuttingaffiliations and rational choicealternativeshasbeenpowerful enoughto offset calls for secession or to violence in the name of group injustice or to obtain ascriptive objectives.Recentexamplescould include Quebec,Scotland,northernItaly, and the Basqueprovincesof Spain. In addition, the literature on ethnicity often points out that group homogeneityis frequently more apparentthan real. Large groupsof humansare virtually certainto be markedby internal factions,powerrivalries, heresiesthat may seemobscureor trivial to outsiders, dialect differencesundetectableby nonspeakingoutsiders,subregional and local loyalties,and otherfissiparousparticularisms.Throughouthistory, commonalityof religion, say Christianity as a whole, or Catholicism,Islam, or Buddhism,often (probably most often) has not beenascriptively power-

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ful enoughto overcomethe interestsand motivationsfor rulers and groups sharingthe samefaith to engagein violent conflict. Much dependson circumstancesand time. Groups apparentlyhomogeneouswhen confronting eachother, as with Muslims and Christiansat varioustimes, havebeenviolently heterogeneous at other times, as with Shiites and Sunnis,or Roman Catholics and Protestants.Even a coincidenceof religion and modern nationalismmay be overriddenby crosscuttingpolitical philosophiesandclass interests,as was the casein somecountriesoccupiedby Germanyduring World War II wherelocal reactionarygroupsor classeswelcomedthe forced adventof fascism. A striking firsthand observationof the overridepower of classinterestis providedby Harold Nicolson,the British diplomat anddiplomatic historian. In June1938,by which time (after Germanrearmament,the fascistinterventions in Spain, the Germantakeoverof Austria, etc.) Nazi intentions were unmistakable,and frequently cited by Winston Churchill as a fundamental dangerto Britain and the rest of Europe, Nicolsonwrote in his dairy: Peopleof the governingclassesthink only of their own fortunes,which meanshatredof the Reds.This createsa perfectly artificial but at present most effective secretbond betweenourselvesand Hitler. Our classinterests,on both sides,cut acrossour nationalinterests.I go to bed in g100m.8 The fact that neither economicclassinterestsnor the other crosscutting intereststhat developmentcan engender(e.g., loyalties to nonascriptivepolitical parties,or membershipin civil society organizationsconcernedwith issuesof governance,socialwelfare,environment,sports,consumerism,etc.) have overriddenascriptive loyalties in many developingcountriesin conflict is more an indication that the objectivebasesfor such affiliations have still been weak becauseeconomic developmenthas still been at an early stage. It would be a mistake to concludethat nonascriptiveinterestsand affiliations are generally incapableof overriding ascriptive divisionsor of strengtheningmotivationsfor nonviolentconflict managementin situations where ascriptivedivisions are sourcesof contestation. It is also critical to recognizethat the period of postcolonial economic development,within the historically unprecedentedsystemof international promotion of developmentthrough resourcetransfersand technical assistance,hasbeenrelatively short. In many of the former colonies,the coincidenceof racial or ethnicdivisions with economicclassdivisions wascreated by colonial policies that favored one group over anotherand/or promoted immigration of ethnically different manpowerto meetspecific labor supply requirementsnot filled (for whateverreasons)from the indigenouspopula-

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tion. Thus, many former coloniesinherited a superimpositionof economic functions with ethnicity, a patternthat hasprovedin somecasesto be highly combustible.If segmentationanddiscriminationpersist,developmentcould intensify economicconflict through continuing denial of accessto expanding opportunitiesin the labor market. Conversely,economicdevelopmentover time cangeneratethe expansion in economicfunctions,the increasesin employmentopportunities,the (nondiscriminatory) provision of educationof the samecontentto all children andyouth regardlessof ethnicity, throughwhich ascriptivelydefinedpeople can gain accessto all sectorsandfunctions,and breaktraditional patternsof intergenerationaloccupationalimmobility, therebyreducingthe salienceof ascriptionas a categoryrelevantto a whole rangeof potentially conflictive issues. In fact, even more can be said for the potentialcontributionof economic developmentto conflict management.A strong casecan be madethat economic developmenthas beena powerful force, perhapsthe most powerful force yet experienced,for eliminating violent group,class,or ascriptiveconflict as a methodfor settlingintrastatedifferencesin the modemworld. Economic developmenthasproducedthis happyoutcomethroughits association with the evolution of stabledemocraticsystemsbuilt on the rule of law and the guaranteeingof human rights (i.e., systemsdesignedfor inclusiveness and nonviolent resolution of, or compromiseover, conflicting interests). Unlike authoritarianregimesthat tend to repressoppositionand aggrieved open minorities, democraticgovernmentsare likely to favor processes-of debate,bargaining,representation, decentralization,andpower-sharing-that obviateany needof minorities to resortto violence. Democraticsocietieshave also shown a superiorability to adjustto economic crisesor recessions.Dani Rodrik has observedthat democraticconflict managementinstitutionshavebeenfar moreimportantfor the ability of economiesto weatherturbulencethan conventionaleconomicanalysishas recognized.9 Economiccrisesare on most of the lists of "early warning" as signsandtriggersof impendingconflict. Although democracyis not a necessary condition for early economicgrowth (one need only cite severaloutstandingcasesof rapid modemeconomicgrowth under nondemocratic,or quasi-democratic,systemsto makethis point-China,Malaysia,Singapore, andTaiwan,SouthKorea,andThailandprior to the recentdemocraticevolution of the latter three), Robert J. Barro (1991) has shown that higher per capitaoutputis stronglyassociatedwith increasinglevelsof democracy.Liberal democraticvaluesand high-incomeopeneconomiescombineto widen the options availableto individuals, to increasepersonalmobility both spatially andculturally, andto expandaccessto education.Successfuleconomic

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developmentalso contributesto preferencesfor negotiation and compromise by raising the potential costs of violent conflict. As wealth accumulates,peoplehavemore and more to lose if the goldengoosegetsthrottled. Nevertheless,democratictransitionis no automaticpanacea.Wherestrong authoritarianregimesare replacedby inexperienced and fragile democratic governments,secessionistchallengesto the state or interethnic confrontations, previouslyforcefully controlled,may spring into action. Post-Suharto Indonesiahas beena casein point. Democraticsystemscan take different forms, someof which in deeply divided societieshave exacerbatedrather than amelioratedpolitical conflict. As the comparisonof Sri Lanka with Malaysiashows,whetheror not political partiesare ethnically exclusiveor combinedin cross-ethniccoalitionscan be critical to determiningwhethera parliamentarysystemwidens or lessensethnic division. We return to this subjectbelow in our examinationof developmentagencyefforts at conflict prevention. Though the great majority of the developingcountriesthat have undergone internal conflicts have had authoritarianforms of government,dictatorship per se doesnot necessarilyproducecivil war. The degreeof risk that the actsof an authoritarianregimewill engenderviolent copflict amongdifferent social groups(as contrastedwith riots or other violent popularreactions againstthe regime) will dependon the nature of the regime. Under totalitarian regimescharacterizedby elaboratestateapparatusand comprehensivestatedominationand control (e.g., Nazi Germany),the regime'srepression ensures that no potential internal conflict (except againstits own internal targets)can be realized. Under a tyranny (e.g., Ugandaunder Idi Amin), the individual dictator pursueshis own aggrandizement,employs ruthlessrepressionto maintainpower, and may sow the seedsof conflict by playing his own ascriptivebaseagainstoppositiongroups.In contrast,a benevolentdespot(e.g., the Thai dictatorshipsof 1958 to 1972) may be only mildly repressiveand kleptocratic,avoiding divide-and-conquertactics and attemptingto promotethe (nonpolitical) interestsof the population.Periods of transition from one governanceform to another,especiallyfrom more to less repressiveregimes,may experienceincreasingrisk of internal conflict as the forced constraintson underlying divisions are loosened,compared with the enforcedstability of successfullyrepressivedictatorships. Liberal democraticvaluesthat define individuals in their civic identity, and stressthe humanrights of individuals equal underthe law, can also reducethe relative salienceof traditional ascriptivegroup identitiesand associations.In somecontexts,however,thesesamevaluescan producethe very oppositeresult, at leastfor someperiod. India's elaboratesystemof preferencesfor specified disadvantagedascriptive groups (lower castes,tribes)

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gives membersof thesegroupsfavored accessto educationand othertracks to socialandeconomicmobility. Wheresuchsystemsprevail,thereis a strong incentivefor membersof suchgroupsto exploit their ascriptiveidentity, and for other groups claiming disadvantagedstatus to establishcomparable ascriptively basedrights. Milton Esmanhasprovideda convenientsummaryof the threeschoolsof thought one finds in the scholarshipon economic developmentand conflict. lO One school assertsthat economicgrowth facilitates ethnic conflict management.Economicexpansionmakesa positive-sumgamepossible.All groupscan benefit without deprivationto any single group. Economicdisparitiescanbe reducedandaccommodationfacilitated.Conversely,economic stagnationand decline are inauspiciousfor conflict management.A second school of thought assertsthe opposite:economicgrowth aggravatesethnic conflict. Growth raisesexpectationsanddiscontents,sharpening resentments of the relatively disadvantaged. The early stagesof modemeconomicgrowth typically widen the inequalitiesof incomeand wealth. The relatively disadvantagedmay perceivea widening gap betweentheir aspirationsfor personal income growth (feeding on the palpablematerial progressof the relatively advantaged)and their expectationsof what they deem likely to happento themselves.Increasingly strident demandsare perceivedas increasingthreatsby the relatively advantaged.If income distribution starts out unevenacrossethnicities, with some ethnically defined group(s) concentratedin the lower rungs and othersin the higher rungs, the increasing disparity (and its resulting widening of the gap betweenaspirationsand expectations)canbe a majorsourceof conflict, especiallyif theserelationships are made known and used by elites for ethnic mobilization. Increasingly stridentdemandsare thenperceivedby the relatively advantagedas increasing threats. Anothervariantof the aggravationthesisconcernsthe speedof economic change:"rapid" economicchangegives a societylesstime to copewith the consequentsocial strainsand adjustmentsthan would slower economicexpansion.The problem with such a generalizationis that it would have to explain why the most rapidly growing economiesin recent decadeshave beenamongthosemost successfulin mitigating social stressand avoiding violent conflict (i.e., Taiwan, SouthKorea, Thailand,Malaysia,Singapore). More attentionhasbeengiven to speedof economicchangewhen governments(supported,influenced,pressured,or forced, as it is often construed, by the IMP) implementa turnaroundto reversea set of unsustainableand dysfunctionalpolicies, so-calledstructuraladjustment. The third school of thought Esman cites assertsthat economic growth doesnot affect ethnic relations.Ethnic conflicts originatefrom other,prima-

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rily political, causes.Economicgrowth or, moregenerally,economicperformance,is "essentiallyirrelevant."Conflicts are waged"for different stakes." This school appearsto dominatethe academicliterature on ethnic conflict and on conflict resolution. One can read serious studiesof contemporary conflict (some are cited in the bibliography and have been invaluable for researchingthis book) with few referencesto economicconditionsor policies, and evenfewer (frequentlyno) referencesto the internationaldevelopment banks or aid agencies.There are certainly caseswhere economic rationality appearsto have Geen abandonedaltogether,where conflict has beenpursued,anddisastroustacticsemployed,regardlessof the consequences for the materialconditionsand prospectsthat would face any expectantvictor. In a conflict driven by a combination of ethnic paranoiaand Maoist class-warfaretheory, the Khmer RougedeliberatelydestroyedCambodia's educatedclassesand all centers(libraries, schools,etc.) of knowledgeand technology,in the absurdbelief that the country would be betterpositioned to achieveregionalpowerwithout theseassets.During the twentiethcentury's largest conflict, Germany continuedto allocate transport,manpower,and otherresourcesto the destructionof militarily insignificantEuropeanJewry despitethe country'sworseningresourceposition in the face of surrounding military reversals.Someof the regionsthat separatistswould inherit if successful,like the arid Tamil areaof northern Sri Lanka, might have poorer economicprospectsthanif they remained,at peace,in the countrythey wish to leave. In fact, accordingto Donald Horowitz, most secessionistmovementsin Africa andAsia "involved regionsthat stoodto lose economicallyfrom autonomy or independence."Horowitz deniesthe salienceof economicissues altogetherin many conflicts. "It remainsdifficult to tie significantaspectsof ethnic conflict to economicinterests.On the contrary, what emergesquite clearly is the willingness of ethnic groupsto sacrificeeconomicinterestfor the sakeof otherkinds of gain."l1 Horowitz immediatelyqualifies this generalizationby noting that secessionistelites may expectto end up betteroff by being dominantin a new poorercountry than by being subordinatein the less poor country they want to quit. For such elites, the potential economic gains(at theexpenseof their trustingfollowers) would appearto havesalience. WhereHorowitz doesseeeconomicfactors as relevant,he accordsthem secondaryimportance."Economic interestmay act either as an accelerator or a brake on separatism.Yet, among the most frequent and precocious secessionists-backward groupsin backwardregions-economic lossor gain playsthe smallestrole, ethnic anxiety the largest.,,12As with so many generalizationson the causesof conflict, thereareimportantexceptionswherethe salienceof economicinterests(not just the interestsof the secession-minded

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elite) hasbeenunmistakable.Economicswas a major reasonbehindthe secessionof Bangladeshfrom Pakistan;in that caseit was evident that the much poorerEast would be betteroff separatedfrom the extractionsof the West. Separatistsin southernSudancould reasonablyexpectto be betteroff independentand in total control of the oil fields in that part of the country.As we haveseenin the Malaysiancase,the leadershipof the Malay andChinese communitiesbelievedeconomicinequalitieswere the country'score issues. In the end, Horowitzavowsthat economicmeasuresare potentially relevant for conflict prevention.13 A numberof statistical studieshave been madethat correlateeconomic factorswith political instability and/orconflict, andeconomicgrowth. These cross-countrystudiesemploy various measuresof instability and of economic or social deprivation,using countriesas a whole as the units for measurement,not internal interethnicdisaggregation.A review of this particular literature,coveringthe period from 1960 to the late 1980s,concluded(with all the necessarycaveatsrespectingthe variablesand modelsused)that significant correlationsbetweenincome inequality and sociopolitical instability had beendemonstrated.The researchresults suggestan argumentthatmight helpexplaindifferentinvestmentandgrowth performancesin different parts of the world. Severalcountriesin SoutheastAsia havehadvery high growth ratesin the post-WorldWar II period. In the aftermathof the war thesecountrieshad land reforms that reduced incomeand wealthinequality.Furthermore,andperhapsas a resultof this reform, thesecountrieshave beenrelatively stablepolitically, compared with, for example,Latin Americancountries.The latter, in turn, havehad much more unequalincome distribution, more sociopolitical instability, andlower growth rates.From a normativepoint of view, theseresultshave implicationsfor the effectsof redistributivepolicies.Fiscalredistribution, by increasingthe taxburdenon investors,reducesthe propensityto invest. However, the samepolicies may reducesocial tensions,and, as a result, createa sociopoliticalclimatemoreconduciveto productiveactivitiesand capital accumulation.Thus,by this channel,fiscal redistributionmight actually spur economicgrowth. The net effect of redistributivepolicies on growth hasto weigh the costsof distortionarytaxationagainstthe benefits of reducedsocial tensions.14 At a very aggregatelevel, thesestudiescapturea quantitativerelationship amongeconomicinequality, sociopolitical instability, and foregonegrowth, in effectconfirming the observationsin the political conflict literaturewhere the conclusionsare drawn from a marshalingof casestudiesand detailed examinationof the many (economicand noneconomic)forms of inequality

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andhow they haveplayedout in the politics andgroup psychologyof deeply divided societies.The conclusionthat the macrobenefitsfor growth and for sociopolitical stability of fiscal redistributionmay outweigh the sum of the micro costsof the redistributionarydistortionsis of the utmost importance. In the many caseswherethe instabilitieshaveled to violent conflict or open warfare,the benefitsof any redistributiveprogramthat might haverestored sociopolitical stability would have beenvastly greater. By contrast,I have found no more overstatedand succinctdenial of the essentialcausality of noneconomicfactors than the view advancedby the InternationalFood Policy ResearchInstitute (IFPRI): Conflicts in countiessuchas Burundi and Rwandaare frequently characterizedasthe resultsof tribal or political issues,when,in fact, the underlying causesare natural resourcedegradation,extremepoverty, and widespreadfood insecurity.Suchconflicts in turn breedfurther food insecurity, poverty, and natural resourcedegradation,continuing a vicious circle of hunger and instability. Technologiesand policies capableof improving food securitywill decreasethe probability of conflict. The interactionbetweenconflict, food security,naturalresourcemanagement,and agricultural researchdeservesmoreattentionfrom the food policy researchcommunity.I5 FormerU.S. President JimmyCarter, one of the most prominentfigures dedicatedto conflict prevention,agreeswith the view that food insecurityis a major underlying causeof conflict. Drawing on a report preparedby the InternationalPeaceResearchInstitutein Oslo, Carterdescribedthe report as having found that mostof today'swars arefueled by poverty, notby ideology.The devastation occursprimarily in countrieswhoseeconomiesdependon agriculture but lack the meansto maketheir farmlandproductive.... The reportfound that poorly functioning agriculturein thesecountriesheightenspoverty, which in tum sparksconflict. This suggestsan obvious but often overlooked path to peace.. . . In the name of peace,it is critical that both developedand developingcountries support agriculturalresearchand improvedfarming practices.... The messageis clear: Therecanbe no peace until peoplehaveenoughto eat. Hungry peopleare not peacefulpeople.I6 Although it is reasonableto assumethat peopleliving in poverty may be responsiveto calls to violence againstwhateverauthority or other group they believe is responsiblefor their plight, some of the countriescited as examplesprovide only ambiguoussupport, at best, to this generalization. India is saidto haveescaped"widespreadviolencein large measurebecause

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the Indiangovernmentmadefood securitya priority." The fact is, casteviolenceand the armedconflicts in somestatesover time might well be called "widespread."Although food securityhasbeena priority objectivein India, an estimated350million ofIndia's1 billion peoplestill fall belowthe country's poverty line. The conflicts in Sri Lanka and Sudanhave arisen out of the reactionof subordinateethnicitiesto policies of the dominantethnicity that havebeenhegemonicin one respector another.It is doubtful theseconflicts would havebeenavoidedhad poverty beenlifted but the governmentshad continuedto pursue thesamepolicies otherwise.In fact, Sri Lanka stands out as an outlier, a poor country much praisedby developmentagenciesin of its the 1970sfor its determinationto alleviatepoverty and for the success "basic humanneeds"programsin raising levels of well-being of the poor. (This policy rarity amongdevelopingcountrieswas muchcriticizedby these sameagenciesas fiscally unwise welfarism in the 1950sand 1960s,before poverty alleviation emergedas a developmentobjective that should be attackedimmediatelyratherthan left for the fullness of time.) The meetingof basic needsand the solicitude for the poor shown by successiveSinhaladominatedSri Lankan governmentsdid not inoculate the society against conflict arising from other causes. In sum, theselatter views arguethat, contrary to the assertionsthat conflict arisesfrom political/ethnic/culturalcauses,the real source of violent conflict can be tracedto the absenceof the economicdevelopmentthat can eliminate extremepoverty and food insecurity. The Sri Lankan caseaside, one can easily cite severeconflicts in countrieswhere living standardsare very low (basichumanneedsaregrosslyundermet),and wheredevelopment and modernizationhavebarely gotten underway, suchas the tribal areasof Burma,or ChadandsouthernSudan.If suchcasesdo not demonstratea hard rule that absenceof developmentwill causeconflict, they do appearto underminethe theoriesthat developmentis a generalcauseof conflict, or at leastserveto illustratethat every theory of conflict will haveits exceptions. A relatedexplanatorymodel seespopulationpressureand environmental resourcescarcitiesas the causesof living standardcollapse and warfare. Sucheither/orstatementspitting economic,political, social, religious,racial or other classificationsof human characteristicsand behavioras mutually exclusive,or individually sufficient, causesof conflict aretoo simplistic and reductivist for the complexity of the problem (other IFPRI paperstreat the food/conflict relationshipat greaterlength and are more nuanced,pointing out that studies of environmentalscarcity and conflict suggestno simple causalrelationship,but an interactionbetweeneconomicconditionsand political conflict over humanrights abuseand social inequalities).17Singapore providesone illustration of interactionsamongeconomicand noneconomic

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causesof social division and conflict (nonviolent in this case)betweenits Chinesemajority and small ethnic Malay minority: "[D]ifferences in the cultural framework within which Malays and Chineseorganizetheir economic lives, especiallywith regardto entrepreneurship, haveput Malays at an economicdisadvantagein Singaporesince independencein 1959, and have supportedthe idea that Malays are culturally inferior which, in turn, hasbeena sourceof discriminationagainstthem."18 Despite the fact that the relative importanceof (individual!) economic factors as contributory causesof any specific conflict cannotbe meaningfully quantified, they are always identified as present,as will be evident below when we review the currentspateof conflict modeling.At this point, one referencewill suffice to illustrate the contributory role of economicrivalries and the problem of separatingout causesin a "thick" analysisof a complex situation.The conflict in the Congohas involved a multiplicity of state and nonstatebelligerents:the (former) Kabila regime in the Congo; threeneighboringcountries(Burundi,Rwanda,Uganda)that intervenedwith their own armedforces and that are supportingdifferent rebel groups;Zimbabweanmilitary forces that supportedKabila; numerous(Congoleseand non-Congolese)Hutu, Tutsi, and other insurgentsfighting e~ch other and Mahaweli, aligned with or against Kabila (including the rejuvenatedHutu "genocidaires"); two other governments(Sudan,Angola) also intervening to promotetheir own interestsderiving from relationswith otherparticipants;local militias in the Congo protectinglocal interests;and minor military support for Kabila from Namibia, Chad, and Libya. In sorting out this thicket of actors and interests,a recentaccountof this extraordiIiarily complex set of interrelatedhostilities describedthe economicand social roots as follows: Thefree-for-all overCongo'svastnaturalresourcesfuels theconflict. Some belligerentsare using statemilitary budgetsto finance their involvement in the war while individualscloseto the leadershipplunder.... [A]ll parties to the conflict areexportingmineralsto help defray war expenses... , reducing the potencyof donorleveragefor peace. Competition for land, resources,and favored positions in a povertystrickenenvironmentfuels rivalries betweenTutsi and non-Tutsi populations. The prevalenceof minerals and export crops throughoutrebelcontrolledterritoriesandthe valueof land in areassuchas Masisi in North Kivu provinceincreasesthe stakes.Economiccollapseand demographic pressurefeedsinsecuritiesand resentment,providing a fertile groundfor recruitmentinto variousmilitary forces.19 As shouldbe clearevenfrom this brief overview,it is too early in modern history to extract a definitive general theory of the relationshipsbetween

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economicdevelopmentandsocial changeon the onehand,andthe evolution of institutionsand abilities (and preferences)for managingnonviolentresolution of group differenceson the other. One cannotbut agreewith the many studentsof conflict that our understandingis still deficient. Any effort to reducethe likelihood of conflict must deal in the end with individual conflict-prone societies,eachwith its unique configurationof ethnicities,institutions,history, andeconomy.An awarenessof the complexitiesandgeneral tendenciesacrossthe rangeof divided societiescanonly serveasbackground to the attemptto understandthe individual case,at a point in time, that should be made by any internationaldevelopmentinstitution whose involvement may be relevantto a country'sconflict dynamics. Democratic Optimism Despiteall thesedifficulties of theory and uniqueness,the apparentsuccess of the high-incomeliberal democraciesin managingconflicts within and amongthemselvescan give us confidence,or at leastsupporta guardedoptimism, that the forcesandcharacteristicsof moderneconomicdevelopment will draw increasingnumbersof countriesinto successfulconflict mitigation. This book is written on the optimistic assumptionsthat many (but certainly not all) conflicts in our age can be mitigated, that the development processcanbe deliberatelymanagedand shapedto preventmaterialinterest differencesfrom degeneratinginto violent conflict, andthat the international developmentagenciesare perforce significant actors in that process.At a minimum, they shouldadoptthe Hippocraticoath: Do no harm.Avoid supporting policiesandprojectsthatexacerbateconflicts in deeplydivided societies. Perhapsdeliberateattention on their part to their past and potential effectson conflict canhelp them torealizea contributionthat may havebeen by symlargely only latentthusfar. Evenwhereantagonismsareexacerbated bolic or ethical issues(acceptablepublic garments,holidays,sexualbehavior, statussymbols, "official" religion, etc.) that are outside the terms or competenceof the developmentagencies,materialincentivesandoutcomesvery much within the termsof theseagencies-mayoften serveas universal offsets. Money and material benefits may be fungible with noneconomic factors. It is prudentto remain "guarded"in suchoptimism for obvious reasons. Froman historicalperspective,thesefortunate,high-incomedemocraticcountries have reachedthis stageonly very recently, with some of them in our own generationhaving engagedin deplorablecollective conflicts and atrocious criminal behavior,as definedin the GenevaConventions.And evenif an ethnicor ascriptiveidentity hasbeenattenuatedor unmilitant overtime, it

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is likely to remainlatentandsusceptibleto a revival of salienceandto assertive or defensivepolitical mobilization.Contemporaryexamples,to cite only a few, include Zionism, Palestiniannationalism,Quebecseparatism,Scottish nationalism,Buddhist-SriLankanmilitancy, BosnianMuslim nationalism, Taiwaneseidentity, the subordinationof Muslim identity to (East)Bengali ethnonationalism,Chechnyannationalism,and the resurgenceof ethnic saliencein Belgium after 1958.Naturally, many forms of cultural revival serve to enrich provincial identities,suchas Celtic languagemovementsin France and the U .K., but they are well short of the saliencethat could nurtureseparatism or violent expression. Should we draw optimistic conclusionsfor the possibilities for conflict managementfrom the fact that most societieshavegonethroughperiodsof domesticpeace,or pessimisticconclusionsfrom the obversefact that most societieshavegonethroughalternatingperiodsof conflict, both internal and with other societies?Reflectingon the group self-restraintinherentin modem democraticstates,the SpanishphilosopherOrtegay Gassetwas pessimistic: The political doctrinewhich hasrepresentedthe loftiest endeavortowards commonlife is liberal democracy.... Liberalismis thatprinciple of political rights, accordingto which the public authority, in spite of being allpowerful, limits itself andattemptsevenat its own expense,to leaveroom in the stateover which it rulesfor thoseto live who neitherthink nor feel as it does,that is to say as do the stronger,the majority. Liberalism ... is the supremeform of generosity;it is the right which the majority concedesto minorities and henceit is the noblestcry that has ever resoundedon this planet.... It was incrediblethat the humanspeciesshouldhavearrived at so noblean attitude,so paradoxical,so refined,so acrobatic,so anti-natural.... It is a discipline too difficult andcomplexto take firm root on earth. Shareour existencewith the enemy!Governwith the opposition!Is not sucha form of tendernessbeginningto seemincomprehensible? Nothing indicatesmoreclearly the characteristicsof the day than the fact that there are so few countrieswherean oppositionexists.2o Writing in mid-1930sEurope,Ortegasaw the threat of majority intoleranceand absolutismin political terms-thatis, as the rise of totalitarianism basedon mobilization and manipulationof undiscerningmasses.Nevertheless,the specterof illiberalism towardthe "other" appliesequallyin the more contemporarycircumstanceswherethe strongergroup in control of the state definesitself (or is manipulatedto define itself) ethnically. SigmundFreudwasequallypessimisticoverthe prospectsfor socialpeace. His pessimismwasbasedon a view of humannaturejust asbleakasOrtega's, but expressedmore in terms of the individual humanper se:

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Men are not gentlecreatureswho want to be loved, and who at the most candefendthemselvesif they are attacked;they are,on the contrary,creaturesamongwhoseinstinctual endowmentsis to be reckoneda powerful shareof aggressiveness .... Homo homini lupus. (Man is a wolf to man.) Who in the face of all his experienceof life and of history will have the courageto disputethis assertion?... In circumstancesthat arefavorableto it [aggressiveness], when the mental forces which normally inhibit it are out of action, it also manifestsitself spontaneouslyand revealsman as a savagebeastto whom considerationtowardshis own kind is something alien. Anyone who calls to mind the atrocitiescommittedduring the racial migrationsor theinvasionsof the Huns,or by thepeopleknown asMongols underJenghizKhan and Tamerlane,or at the captureof Jerusalemby the piousCrusaders,or even,indeed,thehorrorsof therecentFirst World Waranyonewho calls thesethingsto mind will haveto bow humbly beforethe truth of this view.21 Freud's qualification-thatthe wolf emergeswhen circumstancesare favorable to it, and when the normally inhibiting mental forces are out of action-iscentralto any attemptto understandconflict or to devisemethods of mitigation or avoidance.As pointed out above, circumstancesat most points in time normally contain a wide rangeof possibleoutcomes.By the time circumstanceshave beenallowed to culminatein a crisis, the rangeof optionsmay suddenlynarrow to excludeconflict alternatives.At the level of the individual citizen or group member, the violence-inhibiting "mental forces" can be shut down. PeterGay has describedhow Europeannationalisms sweptasideall the ascriptive-crossingidentitiesand loyalties that nineteenth-centuryeconomicdevelopmenthad created: As early as 1879, American sociologistWilliam GrahamSumnerhad declaredthat the world was a "unit" where"the barriersof race,religion, and nationality are melting away underthe operationof the sameforces which have to such an extent annihilatedthe obstaclesof distanceand time." The decadesthat followed appearedto bearout Sumner'ssanguine ... And yet, cosmopolitansentimentscollapsedin July and assessment. early August 1914,as in the battle of loyalties nationalismblottedout all the others.Love of one'scountry and hatredfor its enemiesproved the most potent rationalizationfor aggressionthe long nineteenthcentury produced.... A human life is a life of multiple roles. A man is-all at once-aworker,a RomanCatholic,a Frenchman,a goodhusbandandfather, a stampcollector, a supporterof the local soccerteam. Most of the time, thesediverseidentificationscoexistpeacefully.But theremay be moments of crisis when a choicebecomesimperative,and in the summerof 1914

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thechoicewasa militant nationalism.Its mostspectacularcasualtywasthe organizedinternationalworkers'movement,which showeditself helpless beforepatriotic appealsand patriotic excitement.For years,socialistparties had vowed to disruptany effort by their governmentsto sendworkers into slaughterfrom which only the capitalistswould profit. ... Thencame Sarajevo.For weeks,socialistleadersfrantically negotiatedto avert war. But oncethe war hadbeendeclared,they abruptly turnedpatriot, discarding their commitmentto the workersof the world.22 This particularly fateful collapseof cross-national,nonascriptiveaffiliations wasan exampleof the powerof imminentthreatperceptionsto sharpen the ascriptivelines betweenUs and Them.But it did not deny the reality of the cross-ascriptivetrendsor in generalthe potentialitiesof affiliative complexity to enhancethe prospectsfor conflict managementundernoncritical conditions.And as conditions are normally noncritical during the periods, measuredin years,before most conflicts degenerateinto high violence,the problemfor conflict management is to foreseethe possibilitiesfor escalation and to developpolicies and programsdesignedto promoteaffiliative complexity and to reducethe salienceof deepdivisions or, more precisely,the imbalancesunderlying thesedivisions, be they economic,social, or whatever. This is wherethe particularcharacteristicsof the developmentprocess come into play.

SomeDevelopmentParticulars:Illustrations of Conflict Effects The argumentthus far regardingthe relationshipbetweendevelopmentand conflict mustleavethe readerunsatisfied,especiallythe "developmentpractitioners" who deal in the specificsof the developmentprocessandmay find only limited enlightenmentfrom generaltheoriesthat attempt to subsume within one model or constructthe myriads of policies, programs,projects, sectorand subsectortransformations,technologicalchanges,market operations, institutionalinnovations,andso on, which togethercomprisethe totality of the developmentprocess.A closerlook at someof thesecomponentsis neededif we are to get closerto the real-world activities of the international developmentagenciesand the developmentprofessionals,and attempt to explorethe relevanceandimplicationsof theseactivitiesfor conflict. In fact, many aspectsof the developmentprocesshave beenrelevantto conflict in many countries.Theseaspects-specificpolicies, programs,projects,many of which haveinvolved the internationaldevelopmentagencies-have sometimesexacerbated andsometimesamelioratedconflict. Contextandthe man-

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ner of implementationalso have madebig differences;a conflict ameliorating program in one set of circumstancescan be an exacerbatingfactor in other circumstances. Structuraladjustmentis a term of art for a specialcaseof developmental change.Structural adjustmentis a very modern process,dating only from the late 1970sas a deliberate subjectof economicanalysisand of international agencyattention.Of course,the processof developmentsincethe Industrial Revolutionhaseverywhereentailedcontinuouschangein economic structure.What distinguishesrecent "adjustment"is its referenceto a substantialshift in certaineconomicpolicies,designedto takeeffect overa relatively short period of time (say, two to five years). Structural adjustment becamea major subjectof World Bank lending whenmanydevelopingcountries found their economiesdestabilizedby the effectsof the oil price "shocks" of the 1970s.Theseeffectsincludedsevereinflation, a ballooning of external debt, rising fiscal and externaldeficits, and overvaluedcurrencies.The accumulation of economicimbalancesproved unsustainable.Major policy adjustmentsbecameunavoidableascountriesapproachedthelimits of foreign creditor willingnessto continuefinancial transferswithout an improvementin the prospectsfor restorationof economicand financial balanceand strength.Governmentswilling to commit to the requiredpolicy adjustmentsreceivedsubstantial financial support,especiallyfrom the IMF andWorld Bank.Thatsupporthelped pay for otherwiseunsustainableimport levels and providedbudgetsupportfor governmentsforced to contractpublic-sectorexpenditures. The adjustmentprogramstypically included monetary tightening (e.g., banking systemcredit constraints,decontrol of interestrates),fiscal deficit reduction (through governmentexpenditurereductionsand revenueincreases),exchange-rate liberalization,and a wide rangeof structuralreforms designedto facilitate a return to macroeconomicbalanceand to strengthen an economy'slong-run competitivenessand efficiency. The structural reforms typically entailedfundamentalchangesin economicand development managementphilosophy, often amounting to a break with prevailing antimarketideologies.Programsrangedoverstateenterpriseregulation,pricing, and privatization; tax systems;rationalizationof import tariff and barrier regimes; industrial efficiency, competition, and protectionism;and banking-sectorreform and equity market development.To focus the analysis and policy changerequirementsin specific sectors,such as industry, agriculture, and the social sectors,generalbalanceof paymentsandadjustment by "sector"adjustmentloans.Some loan programsbeganto be supplemented bilateral donorsalso providedadjustmentfinancing, while both multilateral and bilateral donorsofferedtechnicalassistanceto help governmentsdesign and monitor the policy-changeprograms.

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The extentof the changesentailedby theseprograms,the distancecountries hadto travel from government-controlled to market-basedsystems,and from subsidizedto market price systems,varied from country to country. The distancewas greatestin thosecountries,mainly starting in 1989, that embarkedon transition from thoroughlycentrallyplanned,socialistsystems, to market-based, capitalisteconomicsystems.Both structuraladjustmentsin market-based or mixeddevelopingeconomies,andeconomictransition,have been complex processes,hotly debatedover issuesof timing, sequencing, efficiency, anddistributiveimpact.Both processeswereessentialfor the further economicdevelopmentof the nations involved. The socialist or commandeconomieshadreacheda deadend; the mixed or marketlower-income economieswere too destabilizedand distortedto resumesustainabledevelopmentwithout adjustment. The reform programsdesigned,and the conditionsimposed,by the IMF andtheWorld Bank, andthe subsequent performanceof the redirectedeconomies, have beenstudiedand critiqued at length. Both the World Bank and the IMF have drawn lessonsfrom evaluationsof the outcomes,and they have adjustedtheir advice and requirementsover time in favor of greater flexibility and of giving more attentionto softeningthe effectsof theseprogramson vulnerablegroupS.23 A major argumenton transitionhascenteredaroundthe questionof optimal speedand sequencing.Some have arguedthat the entire packageof transition policy and institutional changeshould be introducedat once (an economic"big bang") to deny the vestedinterestsof the old regimethe time to mount an undermining reaction. Others argue that the complexity and historic novelty of the required transformationcall for a gradual process, getting the sequencingright betweenthings that needto be done first and later changesthat dependon prior institutions and policies being in place. Polandis commonly cited as evidencefor a "big bang" approach,in contrast with the transition processin Russia. In any event, to date the economictransitionin EasternEuropeancountrieshasnot generatedlarge-scale violent conflict in the form of vested-interestdefenseor classviolence by the economicallydeprived.The breakupof the Soviet Union has beenfollowed by violent conflicts in the CaucasusandCentralAsian regions;though economicresourceissuesare importantin someof theseconflicts, they are problemsof control rivalries, unleashedethnonationalisms,and religious fundamentalism,not emanatingfrom transitionprocesses perse.The breakup of Yugoslavia,and the attendantconflict, standsout as an exceptionalcase of reversedfederalism,as notedearlier. As far asstructuraladjustmentis concerned,therehasbeenvigorouscriticism by the United NationsChildren'sFund (UNICEF) and othersarguing

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that adjustmenthasunfairly imposedheavyburdenson the poor; adjustment programsshould be redesigned"with a human face." The validity of this criticism must vary by country. Someresearchon adjustmentin Africa has shown that the programsdid not harm the poor (nor significantly benefit them); cutbacksin social-sectorbudgets,for example,did not reduce the level of servicesavailableto the pooras largenumbersof them,especiallyin rural areas,had hardly been touchedby such servicesin the first place.24 While the "IMF-riots" were reactionsto the real pocketbookissuesof lost subsidies,the urban beneficiariesof the subsidieshad generallybeenrelatively favored comparedwith the rural poor. Policy adjustmentsthat improve the rural/urbanterms of trade, such as devaluationof an overvalued exchangerate,anddecontrolof artificially elevatedpricesof domesticmanufacturesandartificially represseddomesticfood prices,can raiseincomesof poor agriculturalproducersto higherlevels that were unattainableunderthe policy structureof the yearsprecedingthe adjustmentprocess. In short, the social impact of structural adjustmenthas varied caseby case,with the effectson different groupsdependingon how the adjustment processaffectstheir sourcesof incomeand the goodsand servicesthey nor25 Thus, the short-runeffectson absoluteor relative poverty mally purchase. do not run uniformly in onedirection oranother.In the longerrun it is clearer that the effects on aggregategrowth of income and on the ability of an economyto addressand alleviate poverty are positive, if only becausethe preadjustmentpolicy structurescould not sustaingrowth or in many cases even reversedecline.The riot reactionswere episodesof transitory low-level violence, not leading to mobilization betweenascriptive or class groups,or mobilizationagainstthe government.To draw more useful conclusionsregarding the possibleeffectsof structuraladjustmentprograms,reinforcing or ameliorating sourcesof social or ethnic conflict, it will be necessaryto examine someof the specific policy components.We return to this subjectbelow. The Rwandacaseis an exampleof how the developmentprocess,or major componentsof that process,can increasethe capacityof (and opportunities availableto) the stateto promotethe hegemonyof thedominantethnicity, evencontributingto violent conflict. In suchcases,developmentcanbe construed as having enabledstate repressionand/or minority exclusionto a greaterextentthan would havebeenpossibleotherwise.Underconditionsof modemeconomicdevelopment,the technicalcapacityof stateorgansto carry out state policies naturally increasesover time. The bulk of international technical assistanceaims to increasegovernmentcapacities,under the assumptionthat thesecapacities(in agricultureresearchand extension,public health, education,economic infrastructure,etc., and in general public administration and governance)would be applied to promoting the general

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welfare of the recipient countries.If a governmentis pursuing hegemony and exclusionthat is inequitableand that raisesthe risk of internal conflict, the country would be betteroff if the government'stechnicalcapacitieswere too weak to implement its policies effectively. The Thai caseprovided an example.The government'sprogramto marginalizeThailand'sethnic Chinesebusinessclassfailed partly becauseit hadno alternativebut to hire local Chinesemanagersto run the very state enterprisesthat were supposedto supplantand preemptChinesefirms. By the time technical assistanceto strengthenthe government'scapacitiesacrossthe boardgot underway in the 1950s,the discriminatorypolicies (which went beyondthe enterprisesector) were being abandoned.It can plausibly be arguedthat if the vast programof training governmentpersonnelhad gottenan earlier start (eitherby the governmentitself in the 1930s,or by foreign aid immediatelyafter World War II), governmentincapacitywould not havehobbledthe anti-Sinic program.26 In addition to growing technicalcapacity,developmentcan also generate increasingrevenuesfor government,dependingon the elasticity of the tax structure.In somecases,one can plausibly arguethat the increasedflow of aid associatedwith "good" policy performance,or aid drawn to countries appearingto offer developmental"success,"may have exacerbatedconditions leading to conflict where the recipient governmenthas exclusionary objectives.As PeterUvin arguedin the caseof Rwanda,aid can inadvertently provide an elite with the incrementalfinancesit needsto carry out a conflict-promoting agenda. Ever since ancienttimes, a quickening of economicactivity has everywhere been associatedwith urbanization.Whetheras trading locales or as sites for industrial conglomerationstaking advantageof economiesof concentration,urban centerswith regional or foreign linkages have beenboth sources("growth poles") of generaldevelopmentand beneficiariesin terms of the opportunitiesand amenitiesthey have provided their residents.In modemeconomicdevelopment,the proportion of a country'spopulationin agriculturedeclinesuniversally.The nonagriculturalsectors(otherthan mining) tend to concentratein urban areas,whereasemploymentopportunities and other attractionsof urban life, especiallyin metropoliseslike Mexico City and Bangkok, draw vast numbersof migrants.Large urbancentersare likely to bring togetherpeoplefrom various regional and ethnic or cultural backgrounds,migrantsfrom home areaswhere the ethnic compositionwas lessvaried,often monolithic. While urbanmigrantpopulationsof oneethnicity or region of origin often clusterin their residentialareas,they will be thrown togetherwith peopleof diverseorigin through work or other urban activities. Differencesbetweenrich and poor may be much greaterthan in rural areas, while the new rich may display their successin conspicuousconsumption.

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The effects of urbanizationon interethnicrelationscan go either way. If the competitiveaspectsof urban life heightenthe prejudicesor predispositions to interpret relationshipsas exploitative and to view the "other" with mistrust and antagonism,the potentialitiesfor mob psychology,for ethnic entrepreneurs, andthe ready accessto ethnic targetsmay increasethe likelihoodof violence.A currentexamplecanbe found in Karachi,Pakistan,where therehasbeenan ongoing violent relationshipbetweenSindh residentsand Muhajir migrants.The interethnicriots in Malaysiain 1969 were confined almostentirely to Kuala Lumpur, the capital. Conversely,before the recent collapseof Yugoslavia,Sarajevohad a long history of peacefulcoexistence and intermarriageamong its Muslim, Croat, and Serb residents.Sarajevo would appearto be oneamongmany examplesof urbanethnic mixing leading to greatertolerance,understanding,and appreciationof cultural diversity. (The readershould not concludethat Sarajevoalso demonstratesthe fact that urbanmulticulturalismmay not be permanentlyimperviousto ethnic conflict; the Serb residentswho abandonedSarajevoduring the recent civil war did so reluctantly,forced out by the non-SarajevanSerbmilitary.) Ethnic ties often help migrantsfind initial employmentand adjust to urban life, reinforcing ratherthan weakeningethnic separation.One study assertsthat in Africa urban ethnic heterogeneityhas not actedto bring about assimilation or to break down the different ethnic value systemsbrought from rural hinterlands.As one observerhas noted: "Non-ethnic institutions (suchas tradeunions)tendto be weak, while the urbaneliteshaveadopteda dual role-actingas sophisticatedWesternerson the one handand maintaining contactswith their homebackgroundsand with traditional valueson the other.In someAsiancountries,heterogeneityhasbeena sourceof conflict.,,27 The alternationof periods of friendship and hostility in the history of many cities suggeststhat a destructionof amicablecommunalrelationsmust result from changesin other factors that would likely produceconflict regardlessof the patternsof residenceand location. Urbanizationper se is not a useful explanatoryvariable for understandingthe Hindu-Muslim and intercasteriots that have beenendemicin India sinceindependence.These riots have occurredin large and small cities and in villages. In addition, "analysisof variancecannotexplain why riots havebecomeendemicin cities suchas Meerut andAligarh, amongothers,while other cities and towns with demographicand other characteristicseven more favorable for riots haveexperiencedfar fewer such riots or noneat all."28 In multilingual countrieslanguo.gedifferences,or efforts of governments to promoteonelanguageasthe official oneor the culturally dominantone in the nameof pursuingnational unity, haveoften beenmajor sourcesof division and conflict. Economicdevelopmentheightensthe importanceof lan-

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guageas a determinantof individual participationin the "modem" sectors and in government,and of group status.Many tonguesspokenby relatively small populationsare in a processof extinction as living languages,their speakersbeing irretrievably drawn to fluency in a majority, or major world, language.Throughoutthe Third World, knowledgeof an internationallanguage(often the former colonial tongue) conveys major advantagesover those who speakonly the local languages;theseadvantages,for example, are seenin foreign tradeor investmentrelationships,dealingswith the international developmentinstitutions, or acquiring knowledgeof modem science and technology.As developmentproceeds,rising levels of skill, knowledge,and communicationexpertisebecomeincreasinglyessentialas sourcesfor raising productivity andincome.Even amongthe world's richest nations,in WesternEurope,multilingualismis the norm in the smaller-population countries. Languagecan becomea deeply divisive issue. Governmentsmay promote the dominanceof one languageby granting it sole "official" status, requiring its use by civil servantsor in citizens' dealingswith government and in judicial proceedings,requiring it as the languageof schoolor university instruction,or evenby introducingsanctionsagainstthe useof proscribed languages.Forcefulpromotionof a dominantlanguageasa methodof achieving national unity-in effect, coercive assimilationof the speakersof the subordinatedlanguages--can provokethe very divisivenessandconflict the policy is designedto prevent.In contrast,prudentlanguagepolicy canbe an effective tool for conflict management.For example,continueduse of the colonial languageas the lingua franca, or as a secondofficial or legal languagewhereonelocal languageis given suchstatusoverotherlocal tongues, may satisfy speakersof minority languagesthat their statusandinterestsare not being subordinated.Alternatively, soleofficial statusof the languageof a dominantmajority may be acceptedby minority languagegroupsif the use of the latter is given wide scopeand not denigratedin any way. Esmanhas arguedthat long-term national cohesionmay be best servedby this sort of combinationof soleofficial language,a requiredsubjectin the schools,along29 side liberal use of the secondarylanguages. Migration has been a major factor in human history. Warfare has commonly markedthe movementof whole peoplesintent on economicbettermentby usurpingthe land andwealthof others.The demographiccomposition of many developingcountriestoday is the result of colonial-eramigration policiesthat were intendedto promotethe colonies'economicdevelopment. The slave trade that transportedmassesof Africans to work the plantations of the WesternHemispherewas, of course,involuntary. In the nineteenth century, severalcolonial powersencouragedvoluntary migration topromote

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the economicdevelopmentof coloniesthey judgedlacking sufficient commercial or professionalclassesor agriculturallabor. Much of the contemporary conflict in developingcountrieshas been occurring in postmigration societiesthat haveyet to developa new multicultural coherenceor satisfactory power-sharingarrangements. Moderneconomicdevelopmentcanalsoentail populationmovementother than urbanmigration.Suchmovementsmight involve resettlementof people from a denselypopulatedareato onepreviouslyunoccupiedandunexploited, or resettlementinto an areaalreadyoccupiedbut presumedto be underpopulated in relation to the land or other resourcesavailable for exploitation. Movement can be individual and spontaneousas people respondto what they perceiveas bettereconomicopportunities,or it might take place as a result of governmentencouragementor official resettlementprograms.In late nineteenth-and early twentieth-centurySpain,spontaneous internal migration from rural Castile to the industrializedareasof Cataloniaand the Basqueprovincescontributedto destabilizingseparatistmovements.Although Basquenationalismhistorically had beenweakerthan Catalan,the depth of some Basqueintellectuals' concern over demographic dilutionof Basque culture and identity was greater,therebycontributing to the conditionsthat led to Basqueterrorism. Modern Basquehistory and conflict would arguably havebeenquite different were it not for the apparenteffect of immigration on the radicalizationof Basquenationalism.3o In anotherexample,the complexof issuesfeeding the Muslim insurgencies in the southernPhilippineshasbeendriven largely by the migration of Christian Filipinos from the more denselypopulatednorthernislands.The gradual reduction of the Moros to a minority in their previously homogebegunby neousIslamic areasis the result of the migration encouragement the Americancolonial administrationand continuedby independentPhilippine administrations.In Indonesia,interislandmigration also appearedto be a rational developmentpolicy for a country with someareashaving dense agriculturalpopulationworking very small landholdingsandotherareashaving unoccupiedarableland. The migration has brought togetherpeoplesof different religious and other identities, in some casesfueling violent conflicts that are adding to Indonesia'scurrentproblemsof destabilizationand of separationmovements.(Although international population movement encouragedby government,such as the "guest worker" migrations to the advancedEuropeaneconomiesas they recoveredfrom World War II, or the large organizedmovementof Asian workersto Middle Eastoil producersin the 1970sand 1980s,may also causeethnic tensionsin the host countries, of modern developmentare outside the scopeof this theseconsequences study.)

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Additionally, recentmigration of lowland Vietnamesesettling on land in the country'sCentralHighlandsregion hasresulted inviolencebetweenthe migrantsand the indigenousethnic minorities. In this case,destructionof outlawedchurchesserving the Protestantminorities has addeda religious complexionto the unrest.31 Governmentprogramsmay involve forcedor voluntarymovement.Population displacementcan take place in either rural or urban areas.Government-sponsored rural voluntary movementsare most commonlyassociated with projectsthat offer peoplewho are landless,or who are farming marginal holdings in denselysettled"old" areas,the opportunity to resettlein newly openedirrigation or other land developmentprograms.Involuntary displacementhas oftenbeena featureof irrigation or hydroelectricprojects that entail the buildup of reservoirsand a consequentinundation of occupied lands.While resettlementin irrigation or land developmentprograms has typically beenvoluntary on the part of the beneficiaries,it can have an obverseinvoluntary characterfor communitiesof prior occupantswho may view the insertionof settlersas a threatto their holdings or cultural homogeneity.Urban development programsoften require involuntary movement,especiallyin the caseof slum clearance. Indonesiaprovidesa numberof examplesof conflict arising from recent migration that was officially promotedfor economicdevelopmentreasons. The inhabitantsof West Kalimantanprovince onthe island of Borneohave long resentedthe presenceof migrants from Madura Island who were resettledunderan official programdating from the 196Os,a programfinanced with donor support.In early 1999, no longer underthe tight control of the authoritarianSuhartoregime,the indigenousMalays andDayaksmassacred large numbersof the Maduresemigrants.The governmentbowedto the indigenes' pressures,sequesteringthe Madureseand sendingsome back to Madura.The problemflared up again in early 2001 when "widespreadrioting, looting and beheadings"requireda massiveresponseby the Indonesian military and police and further removalsof Madureserefugeesby the Indonesiannavy. With the numberof fatalities since1999reportedlyin the thousands,this violencewould classify as a civil war underthe commoncriterion of at least one thousandfatalities a year.32 In the Moluccan Islands there werelong-standingChristian-Muslimtensionsoverperceptionsin eachgroup that the otherwas shuttingthemout in tradeandeducation,respectively.The tensionswereexacerbatedwhen Muslim inmigration in the 1980stippedthe populationbalanceagainstthe Christians.Communalbloodletting in 1999 and 2000 claimedmore than 5,000victims.33 The differing dynamicsof migration and its social consequences in the northernand southernMoluccas are worth noting in detail.

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In the south,political powerhadlong beenthe domainof Christians.They were favored by the Dutch during the colonial era and carriedthat legacy forward when independencewas achieved.After the migrations of the Soehartoyears,immigrantsfrom SouthSulawesi... madeup roughly a quarterof the populationof the capital Ambon City. Their arrival tipped the confessionalbalancein favor of Islam and was accompaniedby a rise in the political andeconomicfortunesof individual Moslems.In the 1990s, as part of PresidentSoeharto'sefforts to win the political supportof Moslem groups,he beganappointingAmboneseMoslemsto the governorship. . . . As a consequence Moslemscameto dominatethe bureaucracy. As in mostpartsof Indonesia,localpolitics hasbeenintimately connected with patronage,accessto resourcesand abuseof power.As power and bureaucraticweight haveshifted from Christiansto Moslems,so havemoney andopportunity.Christiansin Ambonfelt thatthey werebeingoverwhelmed. . . . Justas in the south,North Maluku's conflicts havebeenaggravatedby migration. . .. For instance,numerousbattleshavebrokenout betweenthe Makian andKao ethnicgroupsin the last 25 years,entirely dueto the migration policiesof the Soehartoyears.... Cultural differences,competitionfor limited resourcesand a forced transferof traditional Kao land to the Makian guaranteeda legacyof conflict betweenthe two communities.34 In additionto heighteninglocal resourcepressuresand political competition, migrationalsoindirectly raisedtheseareas'susceptibilityto violenceby contributing to the collapseof the traditional local conflict resolutionsystems.35 The Indonesiancaseis particularly apt becauseof the substantialsupport transmigrationreceivedfrom the World Bank andbecauseits inequitiesand violent consequences (and resulting internationalcriticism) forced the Bank to withdraw from this activity. This was apparentlya caseof missedopportunity, or, to be more precise,opportunity avoided. If the World Bank had applied(andthe governmentimplemented)the Bank'sown policiesrespecting resettlementandthe treatmentof indigenouspeople,the outcomewould probablyhavebeenvery different and more beneficial to all participants.36 It is through the land pressuresthat have beengeneratingmany of these popUlation movementsthat population growth emergesmost clearly as a root of conflict. As Ismail Sirageldinhaspointedout, however,demographic pressurecan becomeeither a sourceof conflict or a facilitator of development dependingon the successand distributional outcomesof a country's developmentprocess."Countriesthat postponetheir fertility transitionswill only increasethe size of the demographicmomentum,increaseits impacton systemvulnerability andreducethe potentialfor sustainabledevelopment.,,37 For many years, wherevergovernmentshave beenreceptive,the development agencieshave been assistingprogramsdesignedto slow population

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growth and bring the fertility transition forward in time. Donors have long emphasizedin their development-assistance programsfemale education, maternaland child health, and family planning-theprincipal factors that havebeenaffecting fertility levels. Becausedemographyhas alreadybeena major concernof the developmentagencies,recognizing its relationships with conflict risk does not lead us to any new program conclusionsfor a conflict-preventionagenda. Forcedmovementinvolving substantialnumbersof peoplehas generally beena political ratherthan economicphenomenon.So-calledethnic cleansing hasbeena political-military policy consequence of the failure of (or the perpetrators'disinterestin) conflict prevention,not a problem that can be chargedto economicdevelopmentper se in any meaningfulway. Nevertheless the developmentagencieshave beencalled upon to play a major role in alleviatingthe plight of peoplewho arebeing,or havebeen,displacedby force. Resolutionof the problemsof forcedmovementis sometimestied to theachievementof postconflictstability, that is, the preventionof anotherroundof violent conflict, which would generateanotherround of displacement. Conflict Modeling and Prediction I tum now to someof the most recentattemptsto developmodelsof conflict causationand forecasting.Facedwith the complexitiesand multiple chains of causationbehind every episodeof modem internal conflict, many studentshave beendevelopingmodels intendedto sort out the more from the less important and to distill systematicpatterns.Someof this work aims at description and explanation.Other work has been designedto provide policymakerswith "early warning" of potentialor impendingconflict in specific situations.Economicfactors figure in most of thesemodels. I focus on the more recent research,which is not necessarilysuperior analytically to earlier work, but which doeshave the advantageof building on the earlier work, and of taking accountof the most recentconflicts and changesin the characterof internationalresponse.As a point of departureI usethe resultsof a largeprojectof the World Institutefor DevelopmentEconomics Research(WIDER) and QueenElizabethHouseat Oxford University. Thethirty-nine scholarscontributingto theprojectwrote bothcasestudies of conflicts in fourteen countries and the Transcaucasianregion and thematic chapterson many aspectsof the origins and preventionof conflict. The project'sconclusionshavebeensummarizedby one of the authors,Jeni Klugman.38 Strictly speaking,the subjectof the WIDER projectis "complex humanitarianemergencies"(CHEs), a recently coined category,defined as multidimensionalmanmadephenomena(i.e., somecombinationof intrastate

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war, forced migration, hungerand disease,and essentiallypolitical and politicized crises). For analysisof conflict, CRE might be too broad a conceptbecauseit embracescountriessuffering from a "poverty crisis" but free of violent conflict. In fact, however, despite its title, the WIDER project focusesonly on countriesthat have had internal war-alongwith disease, hunger,and/orpopulationdisplacement. For any practitioneror developmentagencypolicymakerdesiringto contribute to conflict prevention,or at a minimum to avoid exacerbatingthe problemsunderlyingdeepinternal divisions, a broadknowledgeof conflict experienceand of the generalexplanatoryframeworksis essential.Nevertheless,an important caveatlimits the practical applicability of any framework that purports to provide a generally valid analytic scheme,and of virtually any empirical generalization,including thosefrom quantitativestatistical studiesthat couchtheir findings in the languageof probabilities.The caveatis simply this: in the real world of trying to preventviolent conflict, onedealswith individual conflict-pronecountries,one at a time. Every case hasits own local history and someuniquesocial,political, andidiosyncratic characteristics. In a recentstudy of a numberof African cases,undertakenby the OECD DevelopmentCentre,the authorscapturethe centrality of economicfactors and the balanceof generality and local specificity. "The approachadopted here explicitly acknowledgesthat socio-political instability has highly economy-specificroots. Casestudies,nevertheless,reveal many complementaryelementsand leadto somecommoninsightsthat help to explain the wide spectrumof socio-political outcomeswithin the samegeographicregion.,,39Every framework and generalizationhas its exceptionalcases;application of causalityconceptsdrawn from a large numberof casesmay be misleadingand distorting, and interventionsthat might be helpful in many othercasescould be ineffective or worsein any particularsituationat hand. The generalframeworksand the supportingliterature are importantfor ensuring that the analyst and practitioner avoid simplistic thinking and take accountof the potentialapplicability of conclusionsfrom otherexperiences. But thereis no substitutefor intimateknowledgeof the specificsocietywhere an outsideagencyhas anopportunityand responsibilityto help preventviolent conflict. External agency responsibility cannotbe ducked: the assumptionlong held (or at leastasserted)by many developmentpractitionersand agencies, namelythat developmentassistancecan be technical-neutral,in effect insulatedfrom political conflicts in the surroundingsociety,hasneverbeenvalid. Mary Andersonobservedthat aid cannotbe neutralin the midst of an ongoing conflict: "When given in conflict settings,aid can reinforce,exacerbate,

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and prolong the conflict; it can also help to reducetensionsand strengthen people'scapacitiesto disengagefrom fighting and find peacefuloptionsfor solving problems.Often, an aid programdoessomeof both: in someways it worsensthe conflict, andin othersit supportsdisengagement. But in all cases aid given during conflict cannotremain separatefrom that conflict."40 Just as humanitarianaid cannotavoid affecting the dynamicsof a violent conflict, so developmentaid cannotavoid affecting the underlyingdynamicsor root causesof conflicts in the yearsbeforethey turn violent. Returning to Klugman's summary,the author begins by distinguishing betweenroot causesand triggers."Conflict usually occurswhen some'trigger' eventoccursin a situationof underlying vulnerability to conflict, arising from persistenteconomicand political differencesamonggroups.The asa sharpworseningin relatriggernecessarilyinvolvessomechange-such tive deprivationof a particulargroup." (Someanalystsbelieveit beneficial to distinguish betweentriggers and accelerators.A trigger is defined as a uniqueevent,suchas an assassination, that immediatelyprecipitatesviolent conflict. An acceleratoris an earlier event, such as Klugman's"worsening in relativedeprivation,"which worsensthe grievancesandrelationships,thus increasingthe probability that a trigger eventwill occur and precipitateviolent conflict.) Commonly found prior to violent conflict are certain necessary conditions, including (1) the mobilization of the contendinggroups, often facilitated by a history of earlier violence (e.g., Rwanda),and often deliberatelyaccomplishedby political leadersas a meansto achievepower; (2) political and economicinequalitiesfacilitate mobilization; absentsuch inequalities,group identification is likely to be weak and "remain a cultural ratherthan political or conflict-creatingphenomenon";(3) absenceof alternativesourcesof income(i.e., unemployment),which would otherwisemake the private cost of violence unattractivefor followers; for leaders,in many cases,violence was a meansfor private accumulation(ethnicity merely a tool), while followers may be drawn by opportunitiesfor loot (Liberia), if not by ideology (Cambodia). The foremostroot cause,accordingto Klugman, is horizontal inequality, that is, inequality betweengroups,in contrastto vertical inequality among income classesof individuals. Horizontal inequality can be economic,social, and political, often mutually reinforcing.For example,social inequality tends to limit accessto economicopportunitiesthat can reduceeconomic differences.Accessto education,land, or the military may be key. Horizontal political inequality is nearly universal in conflict countries,with power monopolizedsometimesby a majority, elsewhereby a minority. Invariably, the groupmonopolizingpolitical poweralsobenefitsunequallyfrom control of economic resources-government employment,revenueaccess, asset

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control. High poverty is found commonly amongsubordinategroups,thus facilitating their mobilization and resort to violence. Persistenteconomic failure inducesdominant elites to resort to corruption and discrimination againstthe politically marginalized. Severeconflicts arecommonlyprecededby a crisis ofstatelegitimacy.In somecasesa strong and repressivegovernmenthas lost legitimacy among groupsprovokedto conflict. In others,weak and "eroded"stateshaveleft a vacuumin which violencehaserupted.Statedisintegrationis usually a long anddegenerativeprocess,sometimesinitiated or enhancedby economicdecline, and commonly entailing deteriorationin public goods and services, such as educationand transportinfrastructure.In much of Africa, statelegitimacy has erodedin the absenceof democraticinstitutions. Conversely, democraticelectionscan induce political parties to play an "ethnic card," worseningethnic tensions. Worseningof economicconditionscorrelateswith conflict eruption.Togetherwith widening disparities,the main causaleventsare an increasein uncertaintyabouteconomicprospectsand a weakeningof public goodsand services.Macroeconomic crisescan also act as triggers (as in the Central American conflicts) when there is no consensusas to how to distribute the burdenof adjustmentin a society alreadycharacterizedby deepeconomic inequality. The WIDER conclusionsabout worseningeconomicconditions and conflict appearto be ambiguous.On the one hand, Klugman notesthat "standardstabilization and adjustmentpackages,through demandrestriction and ... liberalization of marketsand reductionin the role of the state, can make parts of the populationsusceptibleto mobilization by threatened elites." On the otherhand,IMF andWorld Bank conditionality, "sometimes thoughtlikely to promoteconflict becauseof its harsheffectson vulnerable groups" through cutbacksin consumersubsidiesand public services,was found generallynot to havetriggered("directly provoked")conflict, except for minor episodesafter someIMF agreements. For somecountries,theseconditionalitieswere irrelevant altogetherbecausethe adjustmentprogramswere nevercarriedout. There appearsto be an importantdistinction hererespectingthe extentand duration of violence commonly attributed to structural adjustmentand the IMF. The WIDER project finds no conflict triggering; other studiesfocus on the frequentoccurrencesof the so-calledIMF riots, massurban protestsmost often triggeredby adjustmentprogramcuts in food subsidies,andresultingfood price 41 Thesefindings are consistentbecausethere is seldoma politiincreases. cized connectionbetweenriots over marketprice increasesfor food (which are inherently nondiscriminatoryamongascriptivegroupsof food consumers), on the one hand, and discriminatory and comparativegrievancesthat

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form the basisfor ascriptivegroupmobilization,on the other. (Again, Yugoslavia was an exceptionalcase;the IMF-Ied adjustmentprogramwas a contributory factor, as we have seen, through a strengtheningrather than a reduction of central stateauthoritiesat the expenseof the ascriptive-based republics.)For countriesimplementingsuchpackages,WIDER recommends that the policy packageinclude distributive measuresto lower the risk of conflict. In fact, it hasbecomecommonpracticeto include social safety net projectsin the aid package. Suddenexternaleconomicshocks(e.g., large shifts in the terms of trade) can worseneconomicconditions,possiblyleading,asjust argued,to heightenedpossibility of conflict. SomaliaandNigeria arecited asexamples.However, the WIDER project included an econometrictest of possiblecausal relationshipsin 124 countries for the period 1980 to 1995, which found, among other things, no associationwith external shocks.The test did confirm significantcorrelationof CHEs with low economicgrowth and worsening income inequality (as measuredby the Gini coefficient [an index of the extentto which the actual distribution of incomein a country deviatesfrom perfect equality]), slow growth in food production per capita (which does not appearto be an addedfinding for this researchbecausein Africa stagnant food productionwould be an importantcomponentof low economicgrowth or decline rather than an additional independentvariable), consumerprice inflation, and a history, or "tradition," of past conflict. The test'suse of income class (vertical distribution, which is what the Gini measures)for its associationwith CHEs is puzzling, for the text clearly statesthe conclusion that horizontalratherthan vertical inequality is amongthe root causes,andis "foremost" at that. Finally, the researchconcludesthat the presumptionthat environmentaldecline (and associatedpoverty) hasbeena causeof CHEs is not supportedby the evidence.Nevertheless,environmentalproblemscan worseneconomicconditions,therebyincreasingpeople'svulnerability. Conflict over water sharinghasnot beenof a magnitudeto be labeleda causeof CHEs, buthascontributedto separatismin the Punjabin India and the Sind in Pakistan. Evenif we makeallowancesfor the unavoidableomissionof detail in any summaryof underlyingresearchas large as the WIDER effort (my summary truncatesit evenmore,of course),the model illustratessomepoints common to many conflict paradigms.First, given the rangeof differencesamongconflict casesthere are examplesof conflict situationswhere conditions have departedfrom the model in importantrespects,implying that the model, if it had been usedbefore the fact as a predictive tool, might have overlooked such cases.Although environmentaldegradationhas led to local unrestand to the formation of activist NGOs (and "green" political partiesin somein-

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dustrial countries),it has not been shown to be a direct causeof general conflict. Nevertheless,severalmodelsinclude such degradationas a factor that can contributeto the catchallof generaleconomicdecline.As compared with vertical income inequality, horizontal inequality is more prominentin conflict modelsthan in standardeconomicdescriptionsof country circumstances.Models vary in their causaltypologies,but commonly agreeon the importanceof distinguishingbetweenroot causesand triggers. Besidesthe WIDER framework, a numberof additional efforts are under way to develop systematicor quantitativeconflict models. Some of these efforts are the work of individual scholars;othersare institutional products Most of theseareintendedas"early warndevelopedby teamsof researchers. ing" guides.Virtually all arebasedon a causalstructure,evenif only implicitly in thechoiceof the relevantphenomena thatmerit monitoringasprecursors of violent conflict.42 Conversely,triggers(e.g.,an assassination), early warning signs (e.g., suddensuppressionof civilian rule), and statistically correlatedfactors(e.g.,an associationbetweenlow opennessto internationaltrade and high risk to conflict) that might signal violent conflict potential may haveonly a symptomaticratherthan generativerelationshipwith underlying structuralcauses. Take, for example,the finding that the risk of conflict in a country is higher (other risk factors already accountedfor) if the country has undergonea prior conflict. To my knowledge,the researchthus far hasnot examined the degreeto which suchrisk, at any point in time, might be raisedby two previousconflicts ratherthan one, or multiple conflicts extendingback throughtime. Doesa history of successiveconflicts reinforcethe finding? Is there a kind of statuteof limitations in the contemporaryrelevanceof conflicts severalgenerationspast?Or shouldone assumethat a certain number of repetitionsindicatesthat renewal of warfare is unavoidable?The Moro/ Muslim rebellionin the Philippinesis perhapsthe longest-running,recurrent conflict in the world. As pointedout in the preface,it datesback four centuries. Doesthis history producea dynamicthat somehowrendersall possible accommodationsshort of secessionso unsatisfactoryto the Moro that they will reject inclusion forever? Basedon the Minorities at Risk project, sponsoredby the U.S. Institute for Peace,Ted R. Gurr hasdevelopeda model to assesswhich ethnic groups aremostlikely to rebelagainsttheir state.Gurr describestheMinorities project as the first researchinto communalconflict that, ratherthan being basedon one or a small set of casestudies,builds on information and dataon all the (233) minority groups in the world that met two criteria: (1) "The group collectively suffersfrom, or benefitsfrom, systematicallydiscriminatorytreatment vis-a-vis other groupsin a state.Suchdifferential treatmentmay be a

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consequence of widespreadsocial practiceor deliberategovernmentpolicy or both." (2) "The groupwasthe focus of political mobilizationandactionin defenseor promotionof its self-definedinterestsat sometime between1945 and 1989."43Of course,not all minoritiesmeetthesecriteria; groupsin Tanzania, Switzerland, andelsewherelive in nondiscriminatoryenvironments. The criteria may be thoughtof as root causes,as necessarybut not sufficient conditionsfor generatingviolence.The criteria embraceboth thosegroups that discriminateand initiate hegemonic(or worse)violenceand groupsthat are discriminatedagainstand adopt a violence programas a response.As Gurr and Harff addedin a subsequentpaper, for a completely causal,or predictive,model, thesestructuralcriteria needto be supplementedwith dynamicfactorsthat propelonegroupor anothertowardviolent conflict, namely the acceleratorsor triggers. The structural model classifiesgroups as high risk, medium-highrisk, or mediumrisk to conflict. The accelerators/triggers might be such things as attackson the group, escalationof the group'sdemandsand rhetoric, an increasein the militancy of the group'selite, or opportunitiesopenedup by disunity or a weakeningof the state'selite. A relatively massivequantitativeapproach,involving a large numberof academicsanddatacollectionandmanipulationexperts,is the StateFailure Projectsupportedby the CentralIntelligenceAgency (CIA). This project is intendedto give early warning of crisesas much as two yearsin advance. The definition of "statefailure" focuseson severeerosionof stateauthority. Failure is identified by extent and by type (i.e., revolution, ethnic war, genocide/politicide,anddisruptiveregimechange).Although the conceptof the phenomenabeing studiedby eachof thesefirst three approachesis different (complex humanitarianemergencies[CHEs], crisesinvolving ethnic minorities, statefailure), implying at leastthat somecountriesand conflicts in one data set may not qualify for inclusion in another,there is, in fact, substantialoverlap.For example,it would be hard to imaginea severeviolent interethnic,or state-minorityconflict that would not qualify as a complex humanitarianemergency.For a contrary example,the conflict in Sri Lanka should not qualify as a caseof statefailure becausethe electedgovernmentshaveretainedtheir domesticand internationallegitimacy and their ability to rule over the majority of the country'sarea. The State Failure Project drew a quantitativemodel from multivariate analysisof 617 variables,of which 31 were statistically significant for differentiatingbetweenstatesthat did and did not suffer sometype of failure. Among the significant variableswere the opennessto trade, already mentioned; infant mortality (a marker for quality of life); level of democracy ("partial" democraciesbeing more vulnerableto failure than full democracies or autocracies);and "youth bulge" in ethnic conflicts.An adaptationfor

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sub-Saharan Africa includedvariablessuchas urbanshareof populationand presenceof ethnic discrimination. A. Jongmanand A. Schmid of PIOOM (Interdisciplinary Researchon Root Causesof Human Rights Violations) also begin by collecting a large dataset for statisticalmanipulation.The dataare indicatorsof humanrights statusand violations. Their approachis more dynamicthan the previousexercises,however,as the indicatorsare recurrentlyupdated(to createa time seriesto indicate trendsand turning points) by field monitors using a common checklist. Although the objective is describedas understandingroot causesof, and identifying early warningsof, humanrights violations, many of the countriesin conflict, or at risk to conflict, would be covered. By contrast,however,a humanrights net would also covercountriesthat havegonethroughextendedperiodsof seriousviolation wherethe very harshnessof state suppressionpreventedany violent countermobilization(e.g., Argentina,Chile, China, Soviet Union). The PIOOM checklistincludesthe basiccharacteristicsof stable,legitimatesocial systems:democracy,minority rights, orderly transitions of power, judicial independence,free press, would-beclassor ethnic destabilizerslacking wide support,no paramilitary, no abrupt economic deterioration.Stagesof increasingtension and rising conflict arecharacterizedby degreesof deteriorationin thesecharacteristics. The PIOOM approachappearsto rely on informedjudgmentbroughtto bear on a country-by-countrybasis,ratherthan a searchfor quantitativetriggers drawn from averagingor multivariatetechniques.It is more a typology than a generalexplanatoryscheme,designedto serveas a pragmatic"watching brief." For our perspectivethere isno needto detail the other predictivemodels summarizedby Klugman.44 As most are intendedto be operationaltools for crisis monitoring and policy responsedecision making, they call for continuousupdatingof the input data.Their largedatabasesappeargenerallyto recordstructuralandeventinformationon causes,changes,and triggers,and to categorizecountriesby stagesof escalatingrisk. A model preparedfor USAID by CreativeAssociatesis interestingbecauseit is designedfor useby practitionersand policymakersat all levels, including diplomats,military personnel,aid officials, NGO managers,and "developmentplanners."45The model divides intergrouprelationsinto five stages:durable peace,in which conflicts (differencesof interest) may be latent or manifest; stablepeace-conflicts(competitions)are manifestbut conflicts, tensions,and possibly irregulated;unstablepeace-unregulated regular armedforces and sporadicviolence; crisis-tenseconfrontationof armedforces; war-low-intensity, anarchy,or all-out. As conflicts tend to evolve graduallythroughthese"intermediate"stages,so the relevantpoten-

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tial interventionswill vary. Betweenroot (systemicor structural)causes,and immediateor triggering causes,the model definesan intermediatecategory of proximateor enablingfactors.Whereastriggersarespecific events,proximate causesare "problemsin the social, political and communicativeprocessesandinstitutions" that "influence" whethersystemicconditionsevolve into violent conflict. Conflicts tendto havea "life cycle" asthey movethrough the intermediatestagesinto violence,and thende-escalate,often in stagesof resolutionthat arealsodifferentiatedfor identifying pertinentinterventionscrisis 'managementand dispute resolution, peaceenforcement,peacekeeping, and postconflict peace-building. The model lists ninety policy tools for conflict preventionand mitigation. In addition to diplomacy (such as good offices, formal conferences,sanctions, recognitionor its withdrawal), nonofficial methods(NGO diplomacy, nonviolencecampaigns,etc.), military measures(arms embargoes,military reform, preventivepeacekeeping forces or intervention,etc.), political measures(party and election support,humanrights monitoring and promotion, civil societydevelopment, power-sharing promotion,etc.),judicial andlegal measures(war crimestribunals,legal systemreformsandstrengthening,etc.), and communicationsand education(peacemedia,journalist training, civic education,training in conflict managementand resolution),policy tools for conflict preventionalso include economicand social measures.Among the latter are developmentassistance,economicreforms, private investment, humanitarianassistanceand resettlement,economiccooperationand intercommunaltrade,andtwo forms of pressure,namelyeconomicsanctionsand aid conditionality.Sanctionsare shownas relevantfor addressingimmediate or triggeringcauses,conditionalityasrelevantfor triggersor addressingproximate or enablingcauses.All other developmental"tools" addresssystemic or structuralcauses.The guide then lays out an analytic processthat moves from statusdescriptionto the setting of preventivegoals to the defining of specific measuresto achievethe statedgoals.The factors and problemsrecommendedfor attention are generally the same as those identified in the various early warning models. Many of the insights of the studiesI have cited are reconfirmedby a recent Dutch researchproject into the causesof conflict, basedon fourteen country casestudies.Thoughthe NetherlandsInstitute of InternationalRelations project unearthedsomecommonalities,it found that eachconflict was locally and historically specific, with a "bewildering variety of factors and circumstancesthat conspireto make a situation conflict-prone.,,46It points out the importanceof understandingthe different startingpoints at independence,the different colonial historiesand social configurations.In a slightly different take on categoriesof causes,the NetherlandsInstitute differenti-

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ated betweenroot ("pivotal") factors needingresolution for a settlement, and factors that escalateand precipitateconflict, namelymobilizing factors, aggravatingfactors (which add weight to pivotal or mobilizing factors; e.g., small-arms proliferation),and trigger events.The study found that weak institutional capacity of government(to mediate,provide servicesto reduce dissatisfactions,or maintainsovereignauthority) hadcontributedto the outbreak of violence. By attributing inadequateprovision of services(implicitly, by benign governments)to capability shortcomingsof public-sector serviceorganizations,the studyidentifiesa factor thatis commonlyaddressed by developmentassistanceprogramsand that might be worked on more aggressivelywhereservicedissatisfactionsarefeedingdeepgeneralgrievance.

Gettingfrom Causesto Interventions:DenseReality versusSalientFocus In agreementwith the models above,most studentsof conflict in general, andindividual conflicts in particular,believethat the causes(not necessarily the triggers) of conflict are multiple. In contrast,some studentsseemultiplicity as obscuringthe (presumablyidentifiable) limited numberof causes that have beenpowerful enoughby themselvesto be sufficient conditions. Multiplicity would then confuseany attemptto identify the critical sources and would lead to a false sensethat a much wider range of policies and interventionsmay be relevant thanis actually required.There is a parallel here betweenthe differencesin negotiation strategydescribedby Kevin Avruch-the narrow, Realpolitik bargainingamongthe hostile leaderships versusthe comprehensiveresolutionof underlyingdifferencesat many levels. Multiplicity of causesimplies that resolutionrequiresmultifacetednegotiationsandprograms;critical subsetimplies that resolutionefforts should focus leverageand resourceson a limited numberof critical issues. A recentanalysisof the conflict in the Congoprovidesan exampleof the multiplicity school. It cites three categoriesof issuesessentialfor peace: "equitabledistribution of power throughoutthe Congo; integrated,coordinated and multifacetedcounterinsurgencycampaignsagainstthe nonstate actors... ; and a coherentstrategyfor addressingthe boiling cauldroncalled Kivu [the easternmostregion of the Congo.]" It calls for addressingthese issuesat "multiple levels." For example, The questionof citizenshipstatusof CongoleseTutsi populationsremains explosive.A comprehensivesocial,legal, and economicstrategymust be fashionedfor this issue,including community meetingson coexistence, civic education,free movementof people,economicdevelopment,secure

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land tenure,protectionof individual and group rights, and local defense 47 mechanisms.

In a conferencevolume on conflict on the African continent,including country and cross-cuttingstudies,the multiplicity of causesis laid out in somedetail. The prominentAfrica scholarsFrancisM. Deng and I. William Zartman (1991) cite various domesticand external causesthat have taken different configurationsand relative weightsin individual countries.The intrastatecausesfall into three groups. First, there have been conflicts over natural or other resources,with individuals or groupscompetingfor control over the resourcesor for "greater distributive justice" respectingnational wealth. Second,therehavebeenconflicts "over the definition of 'self' in the struggle for self-determination,"the "core" of the conflicts in Sudanand Ethiopia/Eritrea.Third, there have been conflicts fueled by competing ideologies.48 In the samevolume,RaymondW. Copsoncites"ethnic cleavagesor other deepsocial divisions," poverty, and "repressivepolicies and other political excesseson the part of African governments."He stressesthe relative poverty of competinggroupsratherthan the absolutelevel of deprivation,and the "resentment"felt by the relatively disadvantaged,or exploited, as they haveobservedtheseinequalities.49 Although Copsondoesnot makethe point explicitly, his examplesof political excessesillustrate a point that for many models also remains only implicit, namely the often critical role of individual rulers and their personaldecisionsto compromiseor to repress,to bridge or to exacerbateand manipulateethnic divisions so as to avoid or to precipitateconflict. The idiosyncrasiesor fanaticismof individual rulers may have wide scopeto determinethe courseof group conflicts in stateswhere poweris centralizedand not constrainedby rule of law or by a well-developed civil society.In otherwords, the causesinclude economicand material,psychological and sociological, and intellectual factors. The implication is that the multiple causesof conflict in Africa cannotbe understoodin their totality, or disentangledand weighed,if seenthroughthe lens of only one or two disciplines.And efforts to preventor mitigatetheseconflicts by addressing the apparentlycritical causesidentified by onedisciplineor another(say, economicsor political science)are likely to be simplistic and insufficient. Most of the socialandeconomicinterventionscalledfor by all theseanalyseswould commonly beincludedin developmentprogramsanyway,whether or not a country was conflict prone.For peoplewho doubt the effectiveness of foreign aid, or who see(nonhumanitarian)aid as only a marginally useful instrumentofforeign policy in the post-ColdWar world, the long-termlinks amongeconomicdevelopment,democraticevolution,andthe declineof vio-

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lence as a meansof conflict resolution should amountto a powerful argument for foreign aid in the self-interestof donor nations.At such a general level of analysis,however, without specifying just how the interventions might relateto conflict and might be shapeddeliberatelyto enhancenonviolent outcomes,the recommendations are not programmaticallypowerful. Although the few econometricstudiesthat haveattemptedthusfar to identify factorsleadingto conflict, or correlatedwith conflict to be more precise, using rigorousstatisticalanalyses,havemadesuggestivebeginningstoward separatingthe more salient causal relations from the less important, they alsohaveyieldedonly limited guidance.Like theWIDER econometricstudy, Auvinen and Nafziger'sresearchfound significant associationamongslow economicgrowth or declinein GNP, a low level of economicdevelopment, and warfare (or complex humanitarianemergencies).50 They found ("less clearly") that incomeinequality ("relative deprivation")and slow growth in food production were also sourcesof conflict. The associationswith inflation andIMF funding wereambiguous.Two noneconomicvariablesincluded in their analysis,military "centrality" and a tradition of conflict, were "robustly" associatedwith humanitarianemergencies.Although the strengthof thesecorrelationsvaries dependingon the numbersand kinds of variables includedin the models,the statisticaltestsemployed,and the datasetsfrom which the variablesare drawn, the generalconclusionsagreewith much of the nonquantitativepolitical scienceresearch.From this level of generality, however, one cannotexpectdetailed guidancefor preventiveintervention. Thus, the authorsconcludethat the internationalcommunity shouldsupport economicgrowth, help reducedisparitiesin income and wealth, assistadjustmentto economicdisequilibria, promote good governance,and reduce tradein arms. Recentwork by Collier and Hoeffler (2000) illustrateshow econometric analysisof conflict falls into the antimultiplicity camp.The purpose,of course, is to separatethe more significant factors from the less significant through statisticaltreatmentof variablesthat are selectedto representdata (from as many conflict countriesas possible,given dataavailability and comparability) on presumablyconflict-relevantphenomena.This is an importantline of research.The effectivenessof international conflict-preventionefforts dependsin part on the choice of factors such efforts try to influence in any given situation. If it were known with some certainty which factors were unlikely to affect the outcometo any significant degree,externalinfluence andresourcescould focus on the factorsof importance.The CollierlHoeffier researchis still "work-in-progress"as indicatedby their reservationsregarding the quality of the data,their experimentationwith different models,and the usual questionsraisedby the choicesof individual variablesusedin the

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statisticalanalysisto serveas proxies, or representations, for social and political phenomena.A number of their findings are counterintuitiveand inconsistentwith (if not dismissiveof) "conventional"findings that havegained wide acceptancein the literatureon conflict, ethnicity, and statefailure. For example,the researchersfound no significant relationshipbetween income distribution and conflict. Further, in a comparisonof two models, one postulating"greed" as the explanationfor rebellion, the other postulating "grievance,"they found grievancehad low explanatorypower. Our resultsthuscontrastwith conventionalbeliefs aboutthe causesof conflict. A stylized version of thesebeliefs would be that grievancebegets conflict, which begetsgrievance,which begetsconflict. With suchan analysis, the only point of interventionis to reducethe level of grievance.Our model suggeststhat what is actually happeningis that opportunitiesfor primary commoditypredationcauseconflict, andthatthe grievanceswhich this generatesinducediasporasto financefurther conflict. The policy interventionpoints here are reducingthe absoluteand relative attractionof commodity predation,and reducingthe ability of diasporasto fund rebel 51 movements. The driving force in the CollierlHoeffler researchis "greed." Rebelsinitiate conflict in order to aggrandize themselves. The leadersgo for the big prize, control over primary export earnings.The rank and file join for employment.It would follow that "rebellion dependson the financial and military feasibility of predationduring combat."s2 The reachfor policy advice basedon suchresearchseemsa bit premature. To generalizeacrossa large numberof conflicts is to eschewdifferentiation amongtypes of conflicts and to excludeadvice tailored to individual circumstancesand exceptionalcases,such as African cases"when a radical faction seizespower to eliminate corruption or to implementfundamentalsocioecoOr caseswhereconflict beginsout of oneparty's nomic andpolitical changes."s3 conviction that no other recourseis availableto perceivedfundamentalthreat, despitethe absenceof an export prize or weaponryother than machetes(as in Rwandaand the Mollucas). Or where the military power of the stateis overwhelming, and "feasibility" to an outsidermight be judgeddubious (as with Aceh provincein Indonesia).On this latter point, NafzigerandAuvinen (1997) believethat severelyrepressedgroups("desperatebargainers")canbe driven to launchcivil war despiteits apparentinfeasibility as a winning strategy. Desperateunderdogswill fight regardlessof the consequences if they feel they havenothingto lose.SouthAfrica's blackpopulationhadbeendriven to sucha positionby the apartheidregime.The country would havelapsed into civil war no matterhow strongthe repressivemachineryof the white

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establishmentwas and no matterhow little hopetherewas for the African National Congresscoalition to win militarily.54 Paul Collier hasalso shownthat heterogeneous countrieswith largenumbersof ethnic groups,eachrepresentinga small fraction of the total population, arelesslikely to havecivil war thancountrieswith fewer ethnicities.In the latter cases,presumably(as Horowitz noted earlier), it is more feasible for a relatively large ethnic group, or an alliance of a very few groups, to attempt to establishhegemony.However, selectinga different set of variables as hypotheticalcausesof conflict can lead to very different explanations of individual country cases.Thus, Collier (2000) cites the absenceof civil conflict in highly ethnically diverseTanzaniaas an illustration of his statisticalfinding. Auvinen and Nafziger(1997) cite the relativeevennessof income distribution ("sharedpoverty") as a possibleexplanationof the absenceof destabilizationdespiteTanzania'seconomicstagnation. The Fallibility of Conflict Forecasting Many of the difficulties of modeling or predicting conflict havebeenillustratedby failures ofthe U.S. "intelligencecommunity" toanticipateinternal warfare,as in the casesof RwandaandYugoslavia.55 A striking examplewas a mid-1999publicationof a conflict tour d'horizon preparedevery eighteen monthsby the interagencyNational IntelligenceCouncil. Basedon the "coordinatedviews of analystsand expertsfrom agenciesacrossthe Federal Government,"the exerciseattemptsto foreseethe likely direction (worse, statusquo, or better) of ongoing and potential complex humanitarianemergencies(CHEs). The publication identified twenty-threecountriesthen experiencingCHEsandanothernine at risk. Indonesiawaslisted asan ongoing emergencybecauseof economiccrisesand its needfor food aid the previous year.Conditionswere projectedto improvebetweenmid-1999andend-2000. Somehow,the warningmethodologyandthe culling of experts'views missed the conflict (and major CHE) that eruptedin EastTimor not long after the assessmentwas issued,and that had been predictedby the pressin early 1999.56 I seesuch discrepanciesnot as indicationsof incompetence,but as unsurprisingexamplesof the fallibility of short-termprediction. Immediately after EastTimor exploded,a group of Indonesiascholarsand watchers admitted that, "As recently as August 30 [1999], when the East Timorese went to the polls on a day relatively free from violence and intimidation, it was possibleto hopethat an opportunityexistedfor Indonesia'sdemocratic transitionandeconomicrecoveryto progresssideby side with self-determination for East Timor. That hope was shatteredby the atrocities permitted and committedby the Indonesianmilitary in EastTimor."57

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A critical Rand Corporationanalysischaracterizedthe predictive methodologiesof the intelligenceagenciesas large-scaleinductivemodelsthatstatistically"grind up" enormousamounts of data,rangingfrom healthandmortality statisticsto thenumberof people under arms,in an effort to developuseful predictorsof political violence. Such predictors,if at all finally available,merely describecorrelationsbetweensomeclassof dataandpolitical violence.Theydo not establushacausal link betweenthe variablesincludedand the social outcomethey seekto explain. Not surprisingly,suchinductivemodelscannotaskquestionsthatbear on the problemof Iww deprivationanddiscontentleadto strife.58 The Randalternativeis syncretic,a guide to judgmenton a case-by-case basis.It is a stagedanalysisthat movesfrom strife preconditions;through political mobilizationby "identity entrepreneurs," changesin the powerbalanceand resourceavailabilities, outsideaid, and "tipping events";to political confrontation,wherebargainingandtherole of the statedeterminewhether thereis nonviolentresolutionor a breakdowninto armedconflict. The analyst would use the framework to follow the course of events.Economic, anthropological,political, institutional, geopolitical, and other phenomena would be taken into account.The outcomeneveris predetermined(as simplistic historicism would assert: "these people are always at each other's throats"), but is contingenton many decisions,influences,chancehappenings, and idiosyncraticpersonalities. One cannotcomeaway from a readingof the burgeoning"warning" materials and the beginningsof econometricexaminationof conflict without strongreservations.First, for mostof the forecastingefforts "early warning" is a misnomer.The genreshould more accuratelybe characterizedas putative late warning systems.Much of the datafed into thesesystemsappliesto events(or accelerators)and triggers that are eleventh-hourhappenings.Intergroup trust has already collapsedand violence is already under way or being prepared.We should reservethe notion of early warning to causal factors and indicatorsthat are evidentat least,say, a year prior to the breakdownsthat takethe partiesto the brink, andover.A notional five to ten years would be much better as an intellectual orientation to true early warning. This is not to assertthat such"warning" would serveas a predictor in any specific case.Rather,it would be interpretedas signaling a plausibly unfavorableoutcome,a "heads-up."Basedon experienceelsewhere,the particular casecould evolve into violent conflict. Current divisions, policies, and institutional arrangementsshouldbestbe examinedin this context. Second, most investigatorsadmit that the stateof the art is still primitive. Someexamples:

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Conflict researchersby and large lack the ability to forecastadequately specifictypesof conflict, despitehavingidentifiedhundredsof factorsthat in various combinationsmay contribute to the developmentof conflict phenomena.The problemis that large-scaleempiricalefforts may identify a handful of generalvariablesthat increasethe likelihood of conflict but tell us little about what typesof criseswith what magnitudeare likely to occur.... At present,"early" warningsare rarely early, seldomaccurate, and moreoverlack the capacity to distinguish among different types of conflict or crises.59 After virtually everymajor relief operationtherearecalls for the developmentof an effective early warning systemof massrefugeeflows. Despitesuchcalls, thereis no suchsystemin place.60 Already in the 1960sIsrael Charnycalled for an early warning system to preventgenocide.Threedecadeslater we still do not havesucha system. . . . In the field of humanrights we still haveno early warning system.61 Nevertheless,in recentyearsthe warning enterprisehasbeengrowing in subtlety and has benefitedfrom the obvious conviction on the part of the researchersand organizationsinvolved that the ills they are addressingare among humankind'smost egregious,and that they are developingpublicpolicy instrumentsthat could be of substantialvalue for humanwelfare. The fact that there is a great deal of overlap amongtheir various constructshas encouragedrapid disseminationof ideas,data banks,and draft papers(and Web sites).There is probably some wastedmoney and effort in this profusion owing to the different missionsof the interestedorganizationsand different disciplinary frameworks of individual researchers.Thus, separate conceptualand data-gatheringsystemshavebeencreatedaiming at "early" warningof different aspects of violent conflict: internal populationdisplacement; external, that is, refugee, flows; political terror; political violence (politicide); large-scalehumanrights violations; generalminority risk; state failure; civil war; complex humanitarianemergencies;and genocide.There are cleardifferencesamongthesephenomena.Internal and externalpopulation displacementdiffer in their cross-borderand internationaleffects. Minority risk or civil war seldom transmutesinto genocide.But all these phenomenaare correlatesof violent conflict; they often occur in the same conflict and might be tracked or "forecast" by a single model that could effectively capture conflictescalationprocesses,as suggestedby Alex P. Schmid, of PIOOM.62 Third, careshouldbe takento avoid assumingthat collectionof evergreater of increasingquantificationof the analyvolumesof data,andthe appearance ses,ensuresthat we are getting closerto having robustconflict theoriesand

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increasinglyreliable conflict forecastsor numerical indicatorsof conflictrisk probabilities.Perhapsbecausethe stateof the art is still primitive, increasingresourcesseemto be going into constructionof warning models and statistical formulations of conflict risk. We should recall von Hayek's warningsaboutthe fallaciesof misplacedquantification,from his 1974Nobel Memorial Lecture on "The Pretenceof Knowledge": Unlike the position that existsin the physicalsciences,in economicsand other disciplines that deal with essentiallycomplex phenomena,the aspectsof the eventsto be accountedfor aboutwhich we canget quantitative data are necessarilylimited and may not include the importantones.... And while in the physicalsciencesthe investigatorwill be ableto measure what,on the basisof aprimafacie theory,he thinks important,in the social sciencesoften that is treatedas importantwhich happensto be accessible to measurement. ... Sucha demandfor measurablemagnitudesquite arbitrarily limits the facts which are to be admittedas possiblecausesof the eventswhich occurin the real world.63 Thereis a further technicaldifficulty. Even if the investigatoridentifies a relevantvariable that appearsquantifiablein a straightforward'manner, the measuredeventsmay actually be ambiguousas an indicator of the phenomenonthey are intendedto represent.A history of political instability, for example, is a commonprecursorof violent conflict. Someinvestigatorshave createdindices of instability basedon the frequency of revolutions and/or coups.Suchan index would miss the potentialfor conflict in a country that had undergonea long period of authoritariangovernmentthat had successfully represseddiscontentor frustratedlocal ethnonationalisms (e.g.,in Zaire! Congo,or amongex-USSRrepublics).It would also falsely predict conflict if a countryhad a long history of coupsby military rivals riding along on the surface,so to speak,of an underlyinghistory of social stability and technocraticlbureaucraticcontinuity, as was the casefor many yearsin Thailand.In short,an effort to nail down a generalsociopoliticalconceptcanmisconstrue complex realities that vary substantiallyfrom country to country.

Illusive but Real: Nonmaterial Motivations If any demonstrationis neededof the relevanceof von Hayek'spoint to the investigationof the essentiallycomplex phenomenaof societiesin conflict, one can refer to the importantrole of psychological,ideational,and ethical factors amongthe causes,or enablingconditions,leading to the two worst conflicts andlargestgenocideof the twentiethcentury.In his effort to under-

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standhow the bulk of the Gennanpopulationand elite were drawn to support the Nazi agenda,historian Fritz Stern wrote at length abouthis "belief that National Socialismwas the greatmoral dramaof our time, and that the vulnerability of Gennans,especiallyof the Germanelites with their claims to superioreducation,responsibility,self-awareness, and a senseof history, to Hitler's triumph was a fateful themein that drama."Sternarguesthat "for many Gennans,National Socialismin its deliberatepseudo-religiousfonn appearedasa greattemptation,asa promiseof nationalsalvationthat harked back to earlierhopesand delusions.'Temptation'in the essaytitle suggests the irrational elementsin submission."Stern observesthat World War I inculcated"ideological simplicity and vastdistrust.The Gennansdid not have a protractedor unifying coursein politics or self-government.The emotional vocabularycontinuedunderWeimar; in many ways National Socialismwas a continuationof wartime politics and psychosisby other meansand under different circumstances."64 Stemalso recordsthe captivation,in World War I and in the yearsleadingup to World War II, of the intellectualsand of their suspensionof critical thoughtunderthe spell of emotionalnationalism. "Self-imposed"conformity, often unconscious,kept pacewith Hitler, and nowherewas thismorestriking thanin the Germanuniversities,which had always boastedof their autonomy.This self-surrenderof the intellectual elite recallsSigmundFreud'ssenseof why in the GreatWar "the bestintellects"demonstrated "their uncritical credulity towardsthe mostdisputable assertions .... Studentsof humannatureandphilosophyhavelong taught us that we are mistakenin regardingour intelligenceas an independent force and in overlooking its dependenceon emotionallife .... Thus, in their view, logical argumentsare impotentagainstaffectiveinterests...." These"affective interests"had as much to do with the self-surrenderto National Socialismas other interests;cold calculationor opportunismoffers only partial explanation.... Despite[Nazi] attackson the traditional rule of law andon the honorof scholarship,mostprofessors-as they had in 1914-immediatelyand passionatelyespousedthe national cause,the Germanrenewal.This outpouringof supportwasof coursein part a product of humanweakness,of fear of reprisal,of careerism.But opportunism alonedoesnot explain this behavior.65 Therewas a similar outpouringof elite and popularenthusiasmfor war in Europein 1914. Stern describeshow a "war-starved"Europerespondedto the outbreakwith "unprecedentedexaltation.""The famed spirit of August 1914 expresseda great yearning for a different world, a world of action, sacrifice, unity, a releasefrom bourgeoisboredom.War as the redeemer, unifier, cleanser-thatwas one of the great delusionsof our century." No

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lessa personthanThomasMann admittedin 1915 that "we had seenthe trial coming-andstill more, in someway we longedfor it, felt in the depthsof our heartthat the world, our world, could not go on like this any more. We knew that the world of peace... horrible world, which no longer is, or no longerwill be, after the greatstormpassedby. Did it not crawl with spiritual vermin as with worms?Did it not ferment and stink of the decayingmatter of civilization?"66 In his magisterial study of nineteenthcentury Europe'sintellectual history, entitled The Cultivation of Hatred, historian PeterGay concludesby writing aboutthe culminationin broadenthusiasmfor, and belief in, violent conflict: The [1914-1918]war hadnot comewholly without warning.For decades, imaginativenovelistsand underemployedmilitary men had forecastsanguinaryconflicts betweennationsandraces.Someof thesedreamerswrote to castigatehumanself-destructiveness, othersto belabora bourgeoisorder badly in need of a fighting tonic. . .. This literature reflected,and fostered,ingrainedbellicoseattitudes,whetherdrawn from a Social Dara~ avant-garde irritation with winist defenseof conflict in humanaffairs or Mahaweli, effeminatecommercialcivilization. The pacifist ideology, though it had enlisted eloquentadvocates,was feeble in comparison;spokesmenfor pugnacity,schooledto seemortal violence as a greatteacher,apparently had a solid majority behindthem."67 Severalyearsbeforethe Nazis took power, the studentpopulationwas "enthralled" by NationalSocialism.As Fritz Sternobserves:"[T]he studentelections of 1928-1930were decisively pro-Nazi, far in excessof the party's national electoralstrength.The studentshad grown up in the deprivationof the war; their teachers-authoritarian figures-hadcontemptfor the [Weimar] republic.... [T]he young infectedtheir teachersas well. The teachers'envy of the young, the admiration for their 'idealism,' while they were embarrassedby their own bourgeoistenuredsecurity, was considerable."68In effect, Sternseesgenerallysharedintellectualfailures anddistortedemotional proclivities as central for an understandingof the easewith which National Socialismmobilized the populationbehind its violent agenda. The vast scholarshipon the causesof the two world wars is seldom,if ever, drawn upon in the literatureon contemporaryinternal conflicts of developing countries.The parallelsmay be few, althoughthe generalconflagrationincludedintrastateconflicts,suchasthe SpanishCivil War, the warfare among resistancearmies in Yugoslavia and China, and conflicts between resistancemovementsand collaborationistregimesin someoccupiedcoun-

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tries. I cite thesereferencesto the impetus to conflict flowing from intangible, emotional,and psychologicalmotivations only to recall the obvious point that such conflict motivationsnot easily capturedas quantifiabledata or variablescan be powerful forces.As historian Paul Kennedynotes: In an anarchicworld that lacks a singlesovereignpowerto orderits destinies, tribes, cities, empiresand nation-stateshavejostled alongsideeach other, and all too often gone to war with eachother for a whole variety of motives-for land, for trade, for gold, becauseof dynastic or religious or ideologicalrivalries, out of fear of beingovertakenor a desireto overtake.69

Conclusion:Multiple CausesCall for Multiple Interventions Deng and Zartman have written about the "complex pattern of causation" behindAfrica's conflicts.Among the major internalfactors,they cite "ethnic cleavagesor other social divisions ... religious cleavage... a region's relative impoverishment... degradationof unemploymentand underemployment ... repressivepolicies and other political excesses."The persistence of repressivegovernmentsand violent guerrilla movementsin "uncompromisingstances"has frustrated the efforts of would-be outside mediators.1°In the face of such arrays of motivations and sourcesof conflict, many of which in anyonesituation are likely to be presentand of varying (anduncertain)relativeimportance,it is not surprisingthatthe search for internationalresponsesand remedieshasgeneratedcalls for multiple interventions. A good exampleis the final report of the CarnegieCommissionon Preventing Deadly Conflict, issuedat the end of 1997. The CarnegieCommission proposesthe widest possible range of measuresaimed at prevention whenconflict appears imminent, andat preventionby addressingroot causes. In the face of imminentconflict, the commissionurges(in addition to forceful measures,if necessary)strengtheningof early warning capabilities,preventive diplomacy, economicinducementsor sanctions,aid conditionality (or what othershavecalled "peaceconditionality"), and the creationof new internationalmachineryto serveas dispute-resolutiongood officesfor intrastateeconomicdisputes,analogousto the interstaterole of the World Trade Organization. To addressinternationalandinternalroot causes,what the CarnegieCommission calls "structural prevention,"the report proposesboth international and internal measures.Recommendationsconcerningsuch things as controls on weaponsof massdestruction,conventionalarms control, regional security arrangements,avoidanceof third-party exacerbationand meddling in internal disputes,and creatingjust regimesand police and military adher-

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enceto rule of law-areall of obviousimportancebut beyondthe scopeof this study.Therecan be little doubt that if thesevariousmeasuresand institutional arrangementswere generallyin place,the efficacy of the rest of the commission'sproposals-whichconcerninternal root causesbeyondfears of insecurity-wouldbe enhancedsubstantially. The commissionreportpositsa direct connectionbetweenmaterialdeprivation and risk of conflict. Existing in a secureenvironmentis only the beginning,of course.People may feel relatively free of from fear of attack,but unlessthey alsohavethe opportunityto maintaindecentliving standards,discontentandresentment can generateunrest. Too many ofthe world's peoplestill cannottake for grantedfood, water, shelter,and other necessities.The slippery slope of degradation-so vividly exemplifiedin Somaliain the early 1990s-leadsto growing risks 71 of civil war, terrorism,and humanitariancatastrophe. The critical connection with receptivity to violence may be through people'sperceptionsthat their governmentis standing in the way of improvementin their conditions,both absoluteand relative. Well-being entails accessto basic necessities,including health services, education,and an opportunityto earna living. In the contextof structural prevention,well-beingimplies more thanjust a state'scapacityto provide essentialneeds.Peopleoften areableto tolerateeconomicdeprivationand disparitiesin the shortrun becausegovernmentscreateconditionsthat allow them to improve their living standardsand that lessendisparitiesbetweenrich and poor.72 To improve living conditions and create confidencethat governmentis enhancingratherthan blocking people'sprospects, thecommissionrecommendswidely sharedeconomicand social development.The perceptionof fairnessis moreimportantthanmaterialprogressitself. "The resentmentand unrest likely to be induced by drastically unbalancedor inequitableeconomic opportunity may outweigh whateverprosperityis generatedby that opportunity.'>73Developmentalso needsto be sustainable,as massviolence can erupt from disputesover resourcesthat are scarceor depleting.Countries need strong rule of law, soundlegal regimesto protect humanrights, participatorygovernance,andsocialaccommodationof diversegroups.Such accommodationshouldinclude freedomto practicereligion, educatepeople in minority languages,and pursueindividual cultures. International assistance of various kinds can help countriesdevelop the requisite legal and other governancesystems,civil society organizations,and responsiblefree media. Religiousleadersshould be called upon to promote toleranceand

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interfaith dialogueand to censurefellow religionists who espouseviolence. Important contributionsto greaterunderstandingof the causesof violence, andto promotingtolerance,dispute-resolvinginstitutions,and a "culture" of nonviolence,should be made by the scientific, educational,and business communities,and by the media.Donors shouldenhancedevelopmentprospectsthrough measureslike increasedaid and debt relief. The CarnegieCommissionendorsesa set of judgmentstaken from reports by the World Bank and UNDP on how economicand social developmentshouldbe approached.Thejudgmentsarestandardcalls for pro-growth andpoverty-reducingpolicies."Thesejudgmentsreinforcethe Commission's belief that diligent programsthat help cultivate the human resourcesof a country, in ways that ensurewidespreadaccessto economic opportunity, will help createconditionsthat inhibit widespreadviolence."74As an article of faith, the presumedconnection-pro-growthand poverty-reduction(i.e., developmentanddistribution)policiesthat createthe kinds of socioeconomic conditionsthat inhibit (widespread)violence-istoo complexto be accepted without examinationor qualification. Developmentand distribution policies are numerousand heterogeneous.Even if intendedto favor the poor, it is unlikely they would all, under all developingcountry conditions,have the happy result of ensuringpeace.What is surprisingis that early prevention, through developmentassistancedeliberatelyshapedto addressroot causes of internal conflict, has receivedrelatively little attentionbeyondgeneralities and hopeful proposals.

Notes 1. Gary S. Fields,"IncomeDistribution and EconomicGrowth," in GustavRanis and T. Paul Schultz, eds., The State of DevelopmentEconomics.Oxford: Basil Blackwell, 1989,pp. 459-460. 2. Tellis et aI., 1997,p. 7. 3. Horowitz, 1985,ch. 4. 4. The small community of ethnic GermanMennoniteswho have lived in Kyrgyzstanfor generations(somearedescendants of settlersfrom overtwo centuries ago)providesan interestingexampleof culturalcharacteristics,sustainedovermany years,more materially efficaciousthan thoseof the host society.The communityis known for hardwork, thrift, andorderliness.Their homesarerecognizedas superior investments,betterbuilt and maintainedthan the homesof other ethnicitiesin the country.New York Times,October11, 1999,p. 4. 5. Martin O. Heisler, "HyphenatingBelgium: ChangingStateand Regimeto Copewith CulturalDivision," in JosephV. Montville, ed.,Conflict andPeacemaking in Multiethnic Societies.Lexington,MA: Lexington Books, 1991,p. 181. 6. Ibid., p. 182. 7. Nordlinger, 1972,p. 99. 8. Cited by BlancheWiesenCook, in EleanorRoosevelt,Vol. 2. New York: Viking Penguin,1999,p. 502.

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9. Dani Rodrik, "The Asian FinancialCrisis and the Virtues of Democracy,"in Challenge(July-August1999):44-59. 10. Esman,"EconomicPerformanceandEthnic Conflict," in Montville, 1991,pp. 477-490. 11. Horowitz, 1985,p. 131. 12. Ibid., p. 259. 13. Horowitz, n.d. 14. Alberto Alesino and RobertoPerotti, "The Political Economyof Growth: A Critical Surveyof the RecentLiterature," in World Bank EconomicReview8, no. 3 (September1994):367-368. 15. InternationalFood Policy ResearchInstitute, IFPRI 1998: Essays.Washington, DC. 16. Jimmy Carter, "First Step TowardsPeaceIs EradicatingHunger," International Herald Tribune, June17, 1999. 17. SeeCohenand Feldbruegge,n.d., p. 3, and Messeret aI., 1998,pp. 9-13. 18. Tania Li, Malays in Singapore:Culture, Economyand Ideology. Singapore: Oxford University Press,1989,p. 182. 19. Prendergast and Smock, 1999,pp. 7-8. 20. Ortegay Gasset,Revoltofthe Masses.New York: Mentor Books, 1950,p. 55. 21. SigmundFreud,Civilization andIts Discontents.New York: Norton, n.d., p. 65. 22. PeterGay, The Cultivation of Hatred. New York: Norton, 1994,pp. 518-519. 23. For a goodone-volumeoverview andevaluationof structuraladjustmentprograms,seeCarl JayarajahandWilliam Branson,StructuralandSectoralAdjustment: World BankExperience,1980-92.Washington,DC: World Bank OperationsEvaluation Study, 1995. 24. David E. Sahnet aI., Structural AdjustmentReconsidered:EconomicPolicy and Povertyin Africa. Cambridge:CambridgeUniversity Press,1999. 25. Jayarajahand Bronson,1995,ch. 6. 26. Muscat, 1994,pp. 54-65. 27. Harry W. Richardson,City SizeandNational SpatialStrategiesin Developing Countries.World Bank Staff Working PaperNo. 252. Washington,DC: April 1977, p.37. 28. Brass,1997,p. 51. 29. Esman,1992,p. 393-395. 30. Basquenationalism"lackedthe political clout of its Catalancounterpart.With little supportfrom the local industrialoligarchy, its cultural, linguistic, and political roots were lesssecure.The mosteminentBasqueintellectuals... scornedBasqueas a literary language.Native Basqueshad a strong senseof community but, unlike Catalonia,the Basqueprovincescould not counton the memoryof a singlepolitical unit with a glorious past.SabinodeArano ... the founderof Basquenationalismand its party, the PNV, saw the Basque-speaking community as being threatenedby a flood of migrantCastilian speakers... who cameto work in the minesandfactories aroundBilbao. To savethis communityfrom adulterationSabinodeAranoinventeda nationalunit, which he calledEuzkadi,which would separatefrom Spain.... Catalan nationalism,given its wide socialsupportandsecurelinguistic andculturalroots,had no needto resortto violence."RaymondCarr, Spain: A History. New York: Oxford University Press,2000,pp. 228-229. 31. "VietnamAdmits to More UnrestAmong Minorities in Highlands,"New York Times,February9, 2001, p. A5.

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32. "IndonesiaClashes,"NewYork Times,February26, 2001,p. A6. 33. Far EastEconomicReview,February24, 2000,pp. 32-33. 34. InternationalCrisis Group,2000,pp. 2-3. 35. Ibid., p. 2. 36. The experienceis describedbriefly by Daniel R. Gibsonin "The World Bank and Displacement,"in EsmanandHerring, 2001,pp. 38-39. 37. Sirageldin,1994,p. 20. 38.KJugman,1999. 39. Goudieand Neyapti, 1999,p. 10. 40. Anderson,1999,p. 1. 41. E.g., JohnWalton andCharlesRagin,"Global and NationalSourcesof Political Protest:Third World Responsesto the Debt Crisis," in AmericanSociologyReview 55 (1990): 876-890. 42. My summaryof thesemodels draws partly on the convenientreview in Verstegen,1999. 43. Gurr, 1998,pp. 6-7. 44. Acceleratorsof GenocideProject,B. Harff, University of Maryland; Life Integrity Violations Analysis (LIVA) project, H. Fein; Protocolfor the Assessmentof Nonviolent Direct Action (PANDA), D. Bond, Harvard University; Conflict Early WarningProject,P. Brecke,GeorgiaInstituteof Technology;conflict patterns/stages analysis,P. SchrodtandD. Gerner.Somefocus narrowly on a brief time spanprior to a violent outbreak,differing from eachothermorein the recordingandmanipulation methodsthan in the structuralor eventdatathey judge relevant.One is designedto forecast(or at leastidentify the precursorsof) only the mostextremeform of conflict -genocide.Thereare also warning modelsand databasesdevelopedby the United Nations,the World Bank, anda few governments.HumanitarianEarly Warning System (HEWS), U.N. Departmentof HumanitarianAffairs; modelof the GermanFederal Ministry for EconomicCo-operationandDevelopment;modelof PaulineBaker, Fund For Peace;model of the Forum on Early Warning and EmergencyResponses (FEWER),a consortiumproduct;pilot studyfor an early warningsystem,SwissForeign Ministry. 45. CreativeAssociatesInternational,1997. 46. NetherlandsInstituteof InternationalRelations,1999,p. i. 47. Prendergast and Smock,1999,pp. 8-9. 48. Dengand Zartman,1991,pp. xvi-xviii. 49. R. W. Copson,"Peacein Africa? The Influenceof RegionalandInternational Change,"in DengandZartman,1991,pp. 25-27. 50. JuhaAuvinen and E. WayneNafziger, "The Sourcesof HumanitarianEmergencies,"in Journal ofConflict Resolution43(3) (June1999): 267-290. 51. Collier and Hoeffler, 2oooa,p. 25. 52. Collier and Hoeffler, 2000c,p. 14. 53. Ted R. Gurr, "Theoriesof Political Violence and Revolution," in Deng and Zartman,1991,p. 170. 54. NafzigerandAuvinen, 1997,p. 54. 55. Tellis et al., 1997,pp. 2-3. 56. Far East EconomicReview,February11, 1999,p. 18. 57. EastAsian Institute,ColumbiaUniversity, Transition Indonesia:Perspectives ofAmerican,Japanese,andAustralian Observers,September1999,p. 14. 58. Tellis et al., 1997,p. 4. Italics in the original.

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59. BarbaraHarff, "Early Warning of HumanitarianCrises: SequentialModels and the Role of Accelerators,"in Daviesand Gurr, 1998,pp. 70-71. 60. L. Clark, Early Warning ofRefugeeFlows. Washington,DC: RefugeePolicy Group, 1989,p. 1. 61. Alex P. Schmid,"IndicatorDevelopment:Issuesin ForecastingConflict Escalation," in DaviesandGurr, 1998,p. 39. 62. Ibid., pp. 40-41. 63. FriedrichAugustvon Hayek, "The Pretenceof Knowledge,"in TheAmerican EconomicReview79, no. 6 (December1989): 3. 64. Fritz Stern,DreamsandDelusions.New York: RandomHouse,1989,pp. 140141. 65. Ibid., pp. 168-169. 66. Ibid., pp. 141-142. 67. Gay, Cultivation ofHatred, 1994,p. 517. 68. Stern,Dreamsand Delusions,1989,p. 160. 69. Paul Kennedy,"American Grand Strategy,Today and Tomorrow: Learning from the EuropeanExperience,"in Paul Kennedy,ed., Grand Strategiesin War and Peace.New Haven,CT: Yale University Press,1991,p. 167. 70. Dengand Zartman,1991,pp. 225-227. 71. CarnegieCommission,1997,pp. xxxi-xxxii. 72. Ibid. 73. Ibid., p. xxxii. 74. Ibid., p. 86.

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Part II

Toward an Agenda for Conflict Prevention

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4. Relevanceand Assessment

To addressroot causesof conflict, the CarnegieCommission reportrecommendsstrongermeasuresto copewith security problems,to strengthensystems of justice, and to promote well-being and development.It calls for upgradingthe state'scapacityto provide accessto basic needs(health,education, water, shelter,etc.) and improving both the policies and the attention that governmentsdevoteto raising living standardsand reducingdisparities. In its call for greaterinternationalefforts to promoteeconomicgrowth and reducepoverty,the CarnegieCommissioncites, in very generalterms,a few interventions:economic organizationthat enhancesbroadly distributed growth; a focus on women and children; resolution of conflicting claims over scarceresources(food, water) and natural resourceendowments(e.g., oil); reducing environmentaldegradationand the pressuresof population growth; developinggood governance."In sum, improving well-being requiresa multifacetedapproach.It meansmobilizing and developinghuman capacities,broadeninganddiversifying the economicbase,removing barriers to equalopportunity,andopeningcountriesto participationin theglobaleconomy andtheinternationalcommunity."!Unfortunately,recommendations at this level of generalitydo not provideadditionalpracticalguidance.All of theseactivities havelong beenthe staplesof internationaldevelopmentprograms. As is the casewith muchof the prescriptionliterature,the CarnegieCommission assumeseconomicdevelopmentwill be conflict-reducing.The recommendationsalsoreflect the easewith which a prescriptioncanmovefrom "development"to an emphasison one or a handful of factors basedon a surfaceplausibility of strongrelevance.For example,the commissionstates: "Thereis greatpreventivevalue in initiatives that focus on womenand children, not only becausethey are the main victims of conflict, but alsobecause women in many vulnerablesocietiesare an importantsourceof community stability andvitality."2 No onewould quarrelwith the observationthat women and childrenare the main victims of many conflicts and that they deserve international attention. However, for reasonswe will examinebelow, the argumentthat women are an important sourceof community stability, and thereforeare a natural conflict-opposingconstituencythat can be strengthenedin this role by aid resourcesand projects,is lesscompellingas a guideline for internationalassistance. 165

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The examinationof conflict thusfar hasthrown up numerousstructuralcharacteristics,policy areas,andconflict-management processeswherethe work of the internationalagencieshasbeen,or could be, relevantin shapingoutcomes. It is importantto avoid any simplistic assumptionthat potentialrelevanceof any one or set of the interventionsor activities reviewed here will automatically translateinto general conflict reduction. In some circumstances-oftiming, conflict intensity,extremistpolitics, or fundamentalistreligiousmovementsthe mandates,policy and project agendas,and capabilitiesof the international developmentagenciesare totally overshadowedby forces that can be addressedonly by internationaldiplomatic and security processes.It would be unrealistic to believe that development-assistance programsmight have beenconstruedto preventconflict in societieswhere rule of law has never been reestablished(or initially establishedin modern independenthistory) and wherepoweris recurrentlycontestedby warlords;or in countrieswith a long history of internal violence,whereconflict can be said to be a "normatively justifiable" characteristicof the political culture;3or in countriesruled by authorities who reject the modern material developmentparadigm; or during periodswhen countriesare ruled by vicious and/orhermeticregimes. It is also difficult in practiceto know when an apparentopportunityholds realistic promise of root-causeamelioration.Aid-assistedsocioeconomic measuresmight be inadequateto the opportunity if not accompaniedby effective diplomatic and political interventions,or an international effort of many dimensionsmay be powerless(shortof military intervention)to change or block local political forces intent on violent contestation.The African nation of Burundi is a case in point. At independencein 1962, the Tutsi minority (16 percentof the 6.2 million population) retainedthe governing powerthey hadheld for four centuriesexceptfor the (German-British-Belgian) colonial period that had begun in 1899. The Tutsi military rejection of the first (1965) electionresults,in which the Hutu won a largelegislativemajority, initiated yearsof revolt, political assassination, massacres,and deepening ethnic polarizationand extremism.A window of opportunity seemedto openin 1988following an army slaughterof about20,000Hutu. The donors pressedupon the latest Tutsi regime a packageof political and economic reforms.As describedby StephenR. Weissman,it is "almost unthinkable" that a political settlementcould be developedin Burundi without "substantial internationalsupport,including a deft mixture of carrotsand sticks." However, the effort madewhen the window appearedto open failed becauseit relied on an electoralform that wasmajoritarianratherthan a powersharing form, and becausethe "moderates"with whom the international community negotiateddid not commandthe allegianceof their more extremist constituencies.Needlessto say, in such a politically flawed "settle-

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ment" the economicmeasures,and the leverageapplied,were marginal and ineffectual. It remainsto be seenwhetherthe power-sharingarrangements, installed on November 1, 2001, after lengthy negotiationsled by Nelson Mandela,will fare any better. The violence launchedwithin days by Hutu groupsthathadrefusedto participatein the negotiationswasnot encouraging. In otherconflict-pronecountries,however,well short of genocide,major issuesof contentionarelikely to be affectedby the programsof the development agencies.The dynamicsof contentionmay still allow sufficient time for theseagenciesto help develop mutually acceptablesolutionsand conflict-avoiding alternatives.Given the large numbersof donorsand projects in typical developingcountries,and the wide rangeof potentially conflictrelevantfactors, it would be surprisingif many aid activities did not touch contentiousissuesandconflict sources.As examples,in Tanzaniamorethan forty donorswere supportingover 2,000projectsin the early 1990s.Kenya and Zambia in the mid-1980shad sixty to seventydonors with about 600 projects.4 Such arrays of activities commonly engagevirtually every governmentministry, working in nearly every sectorand areaof a country. In what follows, I try to sketchout an agendacovering subjectsand activities that are relevantto conflict and that are the normal bread-and-butter concernsof the developmentagencies.Somesubjects aremore suitableto multilateral agencies,either by mandateor by the comparativeadvantages they have developedover time. Others are more suitable for bilateral aid agencies,reflecting their lessconstrainedmandates,their aid orientation,or historic relationshipswith particularrecipientcountries.An importantpoint stressedabovebearsrepeating:the pursuit of the policy and project activities in this agendamay often affect conflictive relationshipseven if the involved agencyhas been oblivious to theseconflict-dimensionsaltogether, under the illusion, and with the intent, that its aid is underwriting a politically neutral"technical"activity. As the Bangladeshsecessionexampledemonstrated,perverseunintendedconsequences are reprehensibleeven if they arise from sheeroversight or from an analytic framework that artificially separatesthe economicor technicalfrom the political and social. How severe the divisions are, how antagonistthe relationships,what the specific points at issueare, what kinds of interventionsor policies or projectsmay be salient-all will vary from country to country and from time to time, and they can bestbe determined,or suggested,by a systematicassessment. In discussingany particularstructural or distributional feature,and how an agencymight be relevantand attemptsomeameliorativeaction, I do not meanto imply that in generalthis problemor that structuralfeatureis likely to be a sufficient causeof severeconflict, or that any single interventionwill be powerful enoughitself to counterbalance all the forces thatmay be press-

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ing toward conflict. Rather,I assumethat eachof the potentialinterventions will be relevantin someinstances,irrelevantin others,more salientin some andlessin others.Somecombinationof interventionsand policieswill probably be advisablein most casesto develop a program adequateto create expectationsand trust that credible positive-sum accommodations are feasible and are being createdwith internationalsupport. Much of what follows builds on someguidelinesMilton Esmanhas laid out in his valuablepaperon foreign aid andethnicconflict.5 Esmansuggests that developmentagenciessearchfor appropriateallocationformulasin their choiceanddesignof policies or projects.The first formula involves common interests."The ideal policy or project set producespositive sum outcomes for all the partiesconcerned."Avoid interventions"that will be perceivedas benefiting one community at the expenseof another."His secondformula favors divisibility-that is, projectsthat canbe providedin separatecomponents,therebyoffering benefitsto different communitiesresiding in different areas.Third, Esman suggestssearchingfor programs that create interdependence,"where a division of labor betweenethnic communities rewardscooperativeratherthan competitivebehavior."He cautionsthat allocation of aid-financedor aid-supportedbenefits (scholarships,jobs, privatizationof stateenterprises,etc.) accordingto neutral criteria of merit or market competitionmay correct or reinforce systemicethnic distortion, depending onthe circumstances.Technicalneutrality doesnot guaranteean optimal social outcome.Competitivecriteria, proportionality in allocation, or compensatorypreferencesmay eachbe most suitablein different contexts.In any case,donor choicesshouldbe madein consultationwith governmentand with all the ethnic communitiesthat might be affected."[T]he searchthrough dialogue for common interestsand mutual accommodationcan increasethe legitimacy of the processand reducethe likelihood of conflict.'>6 For any developmentagency,the feasibility and appropriateform of interventionswill vary depending onwherea country'sauthoritiesstandalong the spectrumbetweenbenign,accommodating,self-aggrandizing,clientalistic, hegemonic,or repressive.None of the following discussionsof individual activities or subjectsare meantto be comprehensive. I will not try to summarize the many lessonsof policy and best practicethat can be found in the extensiveliteratureavailableon eachof the subjects.The purposehere, instead,is to explorehow eachsubjectmight appearin a new light whenlooked at from the perspectiveof conflict exacerbationor prevention. Conflict Assessment An essentialrequirementfor taking conflict-relevanceinto accountin a specific country is knowledgeof local social and political conditions.To create

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a basisfor intelligent planningrespectingpotentialconflict prevention,or to avoid exacerbatingor deepeninginterethnicdivisions, a conflict assessment should shouldbe made,coveringthe following ground.First, the assessment review both the country'srecenthistory and its major changesand long-run trends.An understandingof pastviolent conflict, if any, along with lingering consequences, would obviously be very relevant.Second,it should outline the structureof ascriptive,regional, and political divisions within the society, giving close scrutiny to socioeconomic tensions (economic,religious, linguistic, political representation,educational,etc.) that contributeto grievance and divisivenessalong structural fault lines. As debatableas some of the conclusionsmight be, an analysisof the potential effects on thesedivisionsof policies or projectsstill in the proposalor developmentstagecould alert the agency(ies)to a needfor options that could reducepotential negative effects or introducepositive conflict-ameliorationeffects or offsets. Third, the assessmentshould explore issuesof ethnic politics. Are the contendinggroups mobilized along ethnic lines? Or are they subdivided, with some factions drawn to conflict-ameliorating,cross-ethnicalliances? Are economic,geographic,or cultural factorsreinforcing or attenuatingthese enmities and alignments?What is the statusof economic,professional,or otherinterestgroupingsthat crossascriptive lines?What are thegoalsof the contendingelites and the dynamicsof their relationshipswith their nonelite followers?Understandingthe goalsandrhetoricof contendingelites(whether dominant or challengers)is critical for assessingconflict risk and the urgencyof, andscopefor, ameliorativeinterventions.Thesegoalswill be more or lessopento accommodationand feasiblesatisfactiondependingon where they sit along the range of objectives betweeninclusion adjustmentsand zero-sumextremism-thatis, betweeneconomicconcessions(e.g., budget allocations,revenue-sharing,job preferences);political structureconcessions (e.g., power-sharing,political processreforms); degreesof autonomy;federal reconstitution;captureof the government;hegemonicrepression;secession; ethnic cleansing;genocide. Fourth, what is the role of the state-mediatorand promoterof the general welfare?Capturedby a dominantgroup, and partisanor exclusionary?Hegemonic oversubordinategroups?Are any of the dynamicsthat DonaldHorowitz hasidentified as underlyingsevereethnic conflict present:(a) fear of competition; (b) ethnicallybasedpolitical parties,andpolitics pervadedby ethnicity; (c) powerful juxtapositionsand stereotypes;(d) intraparty competitionthat inducesjingoistic outbidding; (e) nonnegotiable,zero-sumpostures?7Fifth, an evaluationof the conflict relevanceand effects of past assistanceprograms in the country could be especiallyuseful for guiding a fresh look at the implications of ongoing programsand for forward planning.Taking the

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pastexperienceinto account, whichactivities appearto be the most salient for both promotingdevelopmentandaddressingconflict potentialities?Which havethe potentialto exacerbatethe country'sdivisions?Integratingpolitical andeconomicanalysesposesan obviouschallengeto developmentagencies whose expertiseis traditionally economic,technical, and only in some respectssocial. The assessment analystcan draw on an extensiveliteratureon the politics of deeply divided, ethnically diverse,developingcountries.8 Sixth, the assessment must analyzethe economicsof the society'sfault lines. The literatureon poverty in developingcountriesis enormous.Unfortunately, much of it shedslittle light on the intergroup income status and trendsthat are the relevantphenomenafor most internal conflict. Standard quantitativepoverty analysisis basedon the distribution of incomeby class (incomebrackets),acrossan entire country population.Commonlydrawing on data collectedin householdsurveys,the analysisdivides thepopulation accordingto income-levelgradations.Although the analysiswill show what percentageof the populationearnseachlevel of income (for example,in a country with a highly skeweddistribution of income, Brazil in 1989, the richest 10 percentof the population earned51.3 percentof total country income,while the poorest10 percentearneda mere0.7 percent;put another way, the richest decile of the populationhad a per capita income seventythreetimes greaterthan thosein the poorestdecile),9it seldombreaksdown this information(or relateddatathat may becollectedabouthouseholdwealth, health,educationalattainment,andotherindicationsofliving standards)into ascriptive groups. Householdsurvey data and gross product accountsare commonly designedto yield regional comparisons.Comparativeregional analysis may stand in for group analysis if the groups are highly concentrated in particularregionsor provinces.The approximationmay only give indications, however, if ethnic majority regions contain within them local minorities. A manual on social benefit-costmethodologyissuedby the United Nations in 197810 providesa good exampleof how this economic,as opposed to political or ethnological,framework for datacollection and analysiscarried overinto the conceptionandappraisalof investmentprojects.The manual spells out how the expectedincomeflows to the relatively poor can be given greaterweight than comparableflows to the less poor. Such weighting may alterthe selectionof projectsin favor of thoseexpectedto yield moreequitable distribution.The manualpoints out that governmentsmay want to attachextra valueto "basicneeds"that will accrueto peoplein "targetincomegroups,"but it conceivesof potentialtarget groupsonly as the (undifferentiated)poor, or as membersof functional classeslike labor or small business,or as the inhabitants of a poverty-strickenregion. Poor-regionweighting, and the implied regional

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biasin projectlocationdecisions,would translateinto anascriptivegroupweighting in the many countrieswherebackwardor subordinatedethnic groupsare geographicallyconcentrated,but the manualdoesnot extendits conceptionof disadvantaged groupsto embracethe ascriptivelydefined. A similar limitation is found in all the contributorsto a volume on costbenefit analysisput out by USAID in 1980.11 One researcheroffers an example of a poverty group-rankingmethod for rural projects that lists the very poor, poor, small farmers,well-off, and very wealthy.12 In an IMF technical manualfor analyzingpublic expenditurepolicy issues,the discussion of income distribution and of fiscal policies for its improvementtreats a populationas an assemblageof individuals.13 Distribution that is described by the Gini coefficientandothermeasuresthat define groupcohortsonly by incomeclassburies the ethnic distinctionsthat are essentialfor understanding the political economyof divided societies. The project appraisaltechniquesusedby the developmentagencieshave variedin their complexityandin the extentof their adoptionin practice,and they havebeencriticized on many methodologicaland practicalgroundsin an extensiveliterature. Perhapsthe best commonsense defensefor using a systematicanalysisis that it forces the analyst to take accountof all the relevant aspects,and to specify the reasonsfor and costs of choicesthat deviatefrom the arithmeticallyoptimal. The groupdistributioneffectsthat I am proposingbe addedto the analytic requirementsfor project appraisal (by thoseagenciesthat still performsystematicappraisal)merely extendthe existing distribution perspectivesto cover a type of benefit-groupdifferentiation that in many contextsexceedsin importanceall other standard benefit-groupcategorizations.At the sametime, I would be remissif I ignoredthe cautionsin the U.N. guide: Once the analystbegins adjusting valuesof the goodsper se for social reasons,eveneconomicallydisastrousprojectscanbemadeto show"good" social ratesof return. Furthermore,the borderlinebetween"social" and "political" is thin; it is easyto endup maintainingthatpolitically expedient projects,regardlessof how economicallywasteful they may be, are "socially" justified.14 Nevertheless,the U.N. guide urgesthe analyston, arguingthat useof the methodologymakesit possibleto specify thecost,or returnforgone,of "pursuing objectivesotherthan pure economicefficiency." In a further comment for "purists who think that economicsshouldbe devoid of political or subjective judgments,"the guide notesthat the normativeconsiderationsit outlines "are problemsof the real world, and investmentdecisionsare madein this world, not in the world of theoreticalabstraction.Ignoring theseissues

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will not make them go away; it will only make the advice of the economist partially useful at bestand irrelevantto the decisionmakerat worst.',I5 Where different ethnic groupsare highly concentratedin separateareas, analysisof regional economicdifferencesmay give an accuratepicture of ethnic relative economicstatus.An analysisof interregionalresourceflows can be particularly useful. As illustratedby the East-WestPakistanand Sri Lankacases,andby the violent responsein ethnoregionsin Indonesia,Nigeria, andelsewhere,wherethe local populationreceivesonly a fraction of the nationalrevenuegeneratedfrom local oil or gasfields, interregionalresource balancesstructuredby central governmentcan be fundamentalsourcesof grievanceand conflict. Even if a total resourcebalanceanalysisis not feasible, partial balancesmay be estimatedfrom central governmentrevenue and expenditureaccountsrespectinga region in question,supplementedby estimatesof net flow effects of other policy instruments(like an industrial protection regime or foreign exchangepolicy). Such analysesmay reveal systematicimbalanceslong before the level of ethnoregionalgrievance emergesasa conflict "signal." If the imbalancesareinadvertent,the analysis could alert a governmentto the needfor correctivepolicy change,andbe the basisfor donorassistanceto help accomplishthat end. If the imbalancesare deliberate,the analysiscanbe the basisfor placingthe issueson the table for negotiationbetweengovernmentand donors,or for whateveraction the donors judge appropriate. Analysesof economicsectorsor labor-forcecomponentsmay also paint a reliable picture of ethnic differentials in an economy where ethnicity and function tend to coincide.Thoughethnic functional concentrationmay have originated from colonial governmentpolicy, ethnic segmentationis often continuedby employerswho maintain informal practicesof occupational discrimination in hiring. In economieswhere the samefunctions are performed by different ethnic groups(i.e., where there is interethnic competition in the labor markets),thereis often a segmentedwage scalethat can be identifiedthatdiscriminatesagainstworkersfrom low-statusethnicgroupS.I6 In somecountriessurveydataon demographic and social characteristics may reveal ethnic disparities. For example,accordingto the 1998 Human DevelopmentReport issued by the U.N. DevelopmentProgramme(UNDP), life expectancyamongSouth African whites was sixty-eight in the early 1990s,and amongblacks only fifty-four years. In Malaysia, poverty incidenceamongethnic Malays was 24 percentcomparedwith 6 percentfor ethnicChinese.Povertyas measured by the UNDP'shumandevelopmentindex could be shownto vary widely by languagegroupswithin NamibiaP In any deeply divided society where the conventionalavailabledata do

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not lend themselvesto ethnic characterization,an effort needsto be madeto developempirical information and indicators that will make reliable judgmentspossibleon the differentialsandtrendsrespectingthe mostfundamental cleavages.More than economics,the work of anthropologistsand sociologistsshould be drawn upon for information about interethnic relations whereeconomicfunctions such as farm-gateproducebuying, agricultural lending, intermediatemarketing,village shops,urban retail marketing of specificproductlines,or modem-sectorbusinessownershiparecommonly identified with particularethnic groups.Functionalseparationmay actually promote good interethnic relations if it focusescompetition within rather than betweenethnic groups.Rural ethnic Chinesemerchantshavetraditionally had smoothrelationswith Thai farmers; intraethnicmerchantcompetition kept marketing margins low, while Thai villagers saw advantagein marrying the children of the local Chinesemerchants. Conversely, functionalseparationmay fuel conflict if onegroupperceives that anotheris extractingmonopolyor monopsony(sole purchaser)rents,or, on a largerscale,if anothergroupis seenasdominatingthe economyor parts of it. Indonesiais an exampleof a country with a small ethnic Chineseminority, prominent in local trade but most conspicuousin major industrial enterprises(favored by the Suhartoregime), which has been subjectedto occasionalpogroms. of conflict potential should draw on the "early In general,assessments warning" literature, looking for signs that may be presentin the country being studied.In addition, the analystneedsto be alert to someof the longerterm factors we discussedearlier from the scholarly work on conflict and ethnicity that may be significant in the particularsociety.An important examplemight be internal migration (which cuts acrossseveralof the developmentactivities below), eitherfrom denselyto thinly populatedareasor from backwardto more prosperousareasandthat brings togetherpreviouslyseparated ascriptivegroups. An assessmentof the scopesuggestedhere probably would need to be done only once every severalyears, especiallyif independentresearchers are regularly taking the social pulseand watchingfor "early warning" signs. However, donors working in a deeply divided society should maintain a "watching brief," alert to changesor interventionswheneverthey occur and that havethe potential,perhapsonly after a lag of sometime, to affect group asymmetriesor grievances.Take, for example,the problems,perhapscrises, that may overtakea developingcountry when it is hit by an unforeseeneconomic "shock." Suchshocksarecommonlyexternaleventssuchas the sudden oil price rises of the 1970s,or a sharpworseningof the terms of trade becauseof a collapseof the world pricesof one of its major exports.Shocks

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can destabilizeeventhosecountriesthat havebeenconductingprudenteconomic management(i.e., nations not candidatesfor structural reform programs).The governmentcan take various policy measuresto ride out the unfavorableevents,cushionthe domesticimpact, and restoreits macroeconomic balances.The choice amongalternativepolicies takesa high degree of judgmentand must be tailored to the particular circumstancesand the expectedfuture courseof the shock factors. Becauseloan funds from the IMF and the World Bank commonly are an important elementof the responsepackage,both institutionscommonlyaredeeplyinvolved in the crafting of policy responsesto externalshocks. A conflict watching-briefperspectivewould keepthe IMF andWorld Bank alert to the conflict-relevantimplications of shock responsepolicies, or of macroeconomicmanagementpolicies generally.Theseproblemsand policy responsesare often short-termin nature,temporarydeparturesthat are reversedas a crisis passesor as ordinary cyclical changesswing back and forth. For the art of macroeconomicmanagementthere are important distinctions betweenthe regular annual cycles and occasionalrefinementsin periods of relative economic stability, the crisis managementdemandsof shockinstabilities,andthe morefar-reachingoverhaulrequirementsof structural adjustmentwherea complexof reforms is neededto removebasicobstaclesand changethe long-term orientationof an economy.However, the samepolicy instrumentsare commonlyemployedin "normal" times, in crisis management,and in structuraladjustment;the distinctionsin how these instrumentsare usedarisefrom differencesin duration (e.g., shockmanagementmay requireonly brief departuresfrom long-runbestpractice),severity (e.g., the extentof a shock-induceddrop in incomes),andphasing(e.g., the timing of specific policy changesdependenton relatedinstitutional changes, understructuraladjustment).The conflict-preventionandgroup-distribution perspectiveshould be applied to ensurethat the potential relevant consequencesof any recommendedpolicy changeare not overlooked,regardless of the natureof the macroeconomicepisode. Finally, therearepracticalandsensitivequestions:Who shouldmakelongterm conflict risk assessments? How should such assessments be used or distributed,especiallyif they concludethat there is perceptiblerisk? Could publicationof an unfavorableconclusionhavethe perverseeffect of actually damaginga country's prospectsfor avoiding conflict by discouraginginvestment?Donor governmentagenciesare likely to have fewer constraints on conducting sociopolitical risk assessment.The researchwork of multilateralsis largely transparent,and the decisionto undertakeand/ordistribute country researchis commonly subject to consentof the country's government.Much would dependon the sourcesof a country'sdivisive prob-

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lems, andon the characterof its government.If governmentis not a party to the country'ssocial divisions and hostilities, not itself predatoryand partial, it might be receptiveto the insights and policy suggestionssuch an assesswere doneby ment might produce.Sensitivity could be less if assessments an independentacademicor researchinstitution, which couldbe domesticor foreign. Objective scenariobuilding that estimatesthe economiclossesa potentialconflict couldentail,especiallythe lossesto the segmentmostlikely to initiate violent conflict, might enliven a searchfor alternativesless damaging to the parties'economicself-interest.

Notes 1. CarnegieCommission,1997,p. xxxiii. 2. Ibid., p. 84. 3. As in Colombia, accordingto Nafziger andAuvinen, 1997,p. 57. 4. World Bank, 1999,p. 14. 5. Esman,1997.A slightly revisedversionappearsin EsmanandHerring, 2001. 6. Ibid., p. 12. 7. Horowitz, in Montville, 1991,p. 457. 8. Two goodexamplesareEsman,1994,and Horowitz, in Montville, 1991. 9. World Bank, World DevelopmentReport, 1996,Table 5. 10. U.N. IndustrialDevelopmentOrganization(UNlDO), Guideto Practical Project Appraisal: Social Benefit-CostAnalysisin DevelopingCountries.New York: 1978. 11. JohnD. Donahue,ed.,Cost-BenefitAnalysisandProjectDesign.Bloomington, IN: USAID and Pasitam,1980. 12. Ibid., p. 104. 13. Ke-youngChu, and RichardHemming,eds.,A Guide to Public Expenditure Policy in DevelopingCountries.Washington,DC: IMF, 1991,pp. 119-128. 14. UNIDO, Guide to Practical Project Appraisal, 1978,p. 77. 15. Ibid., p. 75, footnote 109. 16. E.g., wagediscriminationagainstlower ("scheduled")casteandtribal workers in Gujarat,New Delhi, andelsewherein India, andagainstAfrican workersin Kenya, is citedin MichaelLipton, LaborandPoverty.World Bank StaffWorking Papers,No. 616, 1983,p. 83. 17. United NationsDevelopmentProgramme,HumanDevelopmentReport.New York: Oxford University Press,1998,p. 34.

s. Inducing Nonviolent Politics and Conflict Management

Top-Down: ReengineeringPolitics American foreign aid beganas a straightforwardinstrumentof Cold War competition.In the 1950s,economicassistancewas provided to democracies and dictatorshipsalike, to sustain alliedrelationshipsand encourage "Third World" governmentsnot to becomeSoviet clients. In the 1960s,the Kennedyadministrationincreasedforeign aid in the belief that development and modernizationwould lead naturally to democratic evolutionin authoritarian developingcountries,therebyinoculating thesesocietiesagainstany lure of revolutionor communism.As this conceptappearedto fail in delivering its promiseddemocracyin what was an unrealisticallyshorttime frame, the administrationreturnedto the earlierpolicy of supportinganticommunist governmentsregardlessof their authoritariancharacter.Looking for a more direct democratizingalternative,CongresstheninstructedUSAID to encouragedemocraticevolutionby working directly on political institutionsandon promotion of "popular participation" in the developmentprocess.Projects for political developmentinvolved areassuch as legal processand institutions, civic education,andlegislativeprocess.For variousreasons,however, direct political developmentremaineda marginal activity. In the 1970s,under the shift of Americanaid'sfocus from economicdevelopmentto meeting "basic needs"of the poor, "participation" survived as a catchwordfor the policy of directingbenefitsto the disadvantaged andincluding the beneficiaries in the planningand implementationof the aidedactivities.l It was not until the 1990sthat thedirect promotionof democracyemerged as a major subjectfor U.S. aid. As the end of the Cold War freed Western developmentassistance from the geopoliticalexigenciesof the previousfour decades,many other bilateral donors also adopteddemocracyas a goal of their developmentassistanceagencies.To maintainits apolitical credentials, the World Bank has confined its foray into political culture to encouragement of good "governance."(The standardlist of attributesof good governanceincludes such things as accountability,transparency,efficiency, low corruption,and addressingmarket failures, all of which can be characteristics of an authoritarianregime.) In practice,democracypromotion has in176

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volved support for NGOs working on human rights; legislaturedevelopment; strengtheningof judicial systems;training of journalists;andtechnical and financial supportfor electionsand for political party development.The end of the Cold War also saw a lesseningin many developingcountriesof oppositionto such donor country "interventionism"in governanceand political process. ThomasCarothers'srecentbook, Aiding DemocracyAbroad, is the first comprehensiveexaminationof the still brief record of direct assistancefor the institutionalizationof democraticprocessand political "culture." Recall our earlierdiscussionof the apparentlong-termcongruenceamongdevelopment, democracy,and nonviolent internal political process(and nonviolent interstaterelationsamongdemocracies).If democracyaid could hastenthe transitionto, andsolidification of, democracy-providinga quick, top-down fix-then the mostdirect routeto conflict preventionwould be aid for political engineering.Although it would appearinconsistentwith former USAID AdministratorJ. Brian Atwood's conviction (cited in Chapter1, pages2728) that statefailure cannotbe preventedby a top-down approach,democracy assistancewas divided among "civil society," which included some bottom-upactivities (NGOs, labor unions, civic education),and three topdown categories-ruleof law, governance,and elections.According to Carothers,the mix of top andbottomactivitiesreflecteda bureaucraticcompromisebetweenthe proponentsof the two approaches.In any event, democracy becamea major USAID objective in the 1990s. Funding for democracyprogramsrosefrom $165million in 1991 to $637million in 1999. There is an importantdistinction implicit in the theorizing that rationalizes democracyaid as the antidoteto conflict. Drawing on Atwood's explaof socialconflict andalleviation nation,thedistinctionis betweenmanagement of the problemsthat producesuch conflict-that is, betweenstrengthening "indigenouscapacityof peopleto manageand resolveconflict within their own societies" on the one hand, and providing technology to (inter alia) "increasefood supplies,slow population growth and preservenatural resources"and to achieve"sustainabledevelopment"on the other. In effect, during a decadeof stagnantor decliningaid appropriationsfor development, funding to strengthenmanagementof conflict roseat the expenseof money to addressunderlyingsourcesof conflict. Was this transferof funds and attentionwise?Putting asidethe presumed link betweendemocracyandnonviolentconflict resolution,hasthis aid been an effective instrumentfor advancingits proximate objective, namely democracy?How can its effectivenessbe evaluated?Needlessto say, a mere decadein which this instrumenthas beengoing through its initial development is too short a period for reachingany definitive conclusion.For coun-

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tries with governments,elites, and populationsthat are intent on democratic evolution and alreadywell along in establishingdemocracy'sbasic institutions andprocesses,assistancefor democracymay demonstrablyadvanceits maturation.In countriesin the early stagesof transition from authoritarian rule, still saddledwith leftover problemssuch as opportunisticleadership, subservientjudiciaries, clientalist and hierarchicalpower structures,and a weak middle class,it is unlikely that externaltechnicalassistanceand some incrementalfunding can bring off a rapid metamorphosisin which the society discardsits inheritedpolitical culture and history. Even where leadershipis committedto democratictransition, there can be no assurance thatthe "Western"institutionalforms andpolitical processes the assistanceis conveyingwill transplantsuccessfully.The Westernpolitical partiesgenerallyhave crosscuttingeconomicand social agendas.Their agendaschangeover time in responseto changesin voter preferences,and voter majorities often shift party allegiancefrom one electionto another.In deeply divided societies,by contrast, parties tend to appeal to different ascriptively defined constituencies,and individuals vote for the party seen as identified with the interestsof their own ethnic group,the party that interprets all issuesin terms of effects on its own ethnic constituency.Adoption of Westernparty systemsand processes(the American more than the European) is likely to require years of experimentationand socialization. Horowitz's insight aboutthe fateful differencebetweenthe polarizedparty systemof Sri Lanka and the coalition systemin Malaysiastandsas a warning for political engineers,especiallyas the lessdemocraticMalaysianpolitics hasmaintainedinterethnicstability while the arguablymore democratic systemin Sri Lanka hasled to civil war. In Carothers'sjudgment(which he believesappliesto all Westerndonors offering democracyassistance),the results to date have been decidedly "mixed." The U.S. effort has often been naive and simplistic, replete with mistakes.The democracyenthusiastshave learnedsomelessons,and their performanceis improving, although the learning processhas beena "constantstruggle."The democracypromotersshouldbe going beyondthe simplistic useof U.S. models;moving from the reproduction of institutional forms to the nurturing of core political processes and values, such as representation,accountability,tolerance,and openness;coming to terms with the mUltiplicity of political trajectoriesthat follow democraticopenings;understandingthe limits of electoralism;confronting the inadequatewill to reform that hampersthe reform of most stateinstitutions; giving up the simple equationof advocacyNGOs with civil society;embracingmore hands-oninnovativemethodsof civic edu-

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cation; not counting on the training of journalistsas a solution to media reform....2 Democracyprogramstoo often rest on what is eithera dreamy,or, seen in anotherlight, a hollow view of politics. Democracypromotersfrequently seemsurprisedby the most banal realitiesof politics-thatpower is only rarely given away cost-free,that principlestrump interestsonly occasionally, that zero-suminstincts are as commonas cooperativeattitudes,that political violenceeruptseasily when power shifts are occurring,and that historical legacies,whetherhelpful or harmful to democratization,areextraordinarily persistent.3 In addition to the intellectualshortcomingsof the practitioners,Carothers cites the inadequacyof the stateof knowledge,the needfor a "synthesisof economicandsocioeconomicdevelopmentwork." He alsocriticizesthe poor interactionbetweendemocracypromotersand developmentpractitioners. Most democracypromotersbelieve that economicdevelopmentand democracyreinforceeachother.They havenot, however,made.manyefforts to connecttheir work to otherpartsof the developmentassistancepicture. . . . [They] haveworked from a conceptionof democratizationfocusedon political institutionsandprocesses,which downplayssocioeconomicforces and trends that affect democratization.In parallel fashion, even though many traditionaldevelopmentalists camearoundin the 1990sto the ideathat democracycan be a positive factor in development,they have shown little interestin democracyassistance,whetherout of skepticismaboutthe possibility of shapingpolitical developmentthroughaid or concernabout"infecting" their socialandeconomicprogramswith overtly political content.4 A project USAID conductedin Haiti between1994 and 1996 was an interesting exception to this dichotomouspractice. The project provided small grantsfor local economicimprovementactivities in a large numberof communitiesthroughoutthe country.The purposewas to help shoreup the initial stagesof the restorationof electedgovernmentafter the ousterof the military regime. According to an evaluation,the Communal GovernanceProgram (CGP), as a complementto the restorationby internationaldiplomatic and military intervention, contributedto the democratizationprocessby quickly moving into a new political spaceand providing badly neededmaterial resourcesto enable local organizationsto beginimproving their communities... , ameansfor Haitiansto expressthemselvesfreely both with oneanotherand with their local representatives. This is resultingin local officials beingmorerespon-

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sive to their constituents .... CGPhasinjectedtransparencyandaccount.... CGP has startedan important ability into programsand transactions processto rebuild confidencein local governmentand lay the foundation for otherdemocratizationactivities.5 The project was seenas a contribution to "facilitating the restorationof effectivegovernanceat all levelsof Haitian society."The conceptis interesting as a putativemarrying of civil society,local officialdom, higherdemocto the brief racy, andeconomicreconstruction.Evenif aid efforts subsequent CGP project havesucceededin sustainingwhat was certainly a novel set of relationshipsin Haitian society,there is little evidencethat it has madeany connectionwith, or contribution to, effective governanceat higher levels. Haitian governmentat the top hasbeenparalyzedsince 1994. Conflict-managementat the national level can take different forms, of which some would be foreign to, or inconsistentwith, constitutionalprinciples underlyingthe political systemsof someof the countries(mainly the United States)providing democracyassistance.Eric Nordlinger identified six political practices,one or more of which have been employed where nonviolent conflict managementhas succeededfor periods, if not permanently: (1) stable governmentcoalitions betweenparties representingthe antagonisticgroups; (2) proportionality in allocating governmentpositions or resources,ratherthan winner-take-all;(3) mutual veto (or concurrentmajority), under which decisionsin specified areasof public policy must be acceptableto all parties; (4) selectedissuedepoliticization,limiting involvement of governmentin divisive communalissues,devolving authoritiesto different jurisdictions,or avoiding public discussionof "conflict-ladencommunal issues";(5) compromiseon core issues,most feasiblewherethere are several suchissuesgiving scopefor quid pro quo bargaining;and(6) unilateralconcessions by the strongeramong a set of antagonisticgroups. Pure democratic majoritarianismmay actually exacerbateconflicts in deeply dividedsocieties.6 In sum, we should anticipatemodestresultsfrom efforts of aid agencies to democratizethe political culture and institutions of societiesthat are still retainingor newly emergingfrom authoritarianpolitical cultures.Poweraccommodationthrough negotiation (in some casesachievableonly after a civil war in which neither side prevails) may be a more realistic and more quickly attainablegoal. As Malaysiaillustratesagain,power-sharingandits accompanyingbargainscanbe the basisfor long-termstability andfor rapid economicgrowth and poverty reduction,even undera flawed, quasi-democratic political systemthat democracypromoters(and many Malaysians,of course)would judge needful of reform. The fundamentalconstrainton the effectivenessof efforts at direct aid-induced,or aid-assisted,reform of power

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relationsand political processcanbe simply put. If a regimeseeksassistance as power-sharing, in good faith to adopt conflict-avoiding measures-such decentralization,respectfor minority rights, judicial independence, credible elections-thebattle is already won.The really difficult problemis how to bring a governmentand a polity to that readiness. An alternative,structuralroute to power-sharingmay be throughdecentralization. We have seenhow the location of power has been a central issue in countrieslike pre-civil war Pakistan,Sri Lanka,Yugoslavia,andMozambique, where large ethnic groupsare concentratedin specific areasor subnational jurisdictions.Division of powersbetweencentraland regional or local governmentis everywherefundamentalto politics and the structureof the state. Constitutionalprovisionsestablishingthesedistributionswere importantissuesin the processesleadingto post-WorldWar II decolonization.The issue hasbeenmuch studiedby scholarsand mediatorsconcernedwith countries (e.g., Nigeria) where the very integrity of the stateis bound up with an unstable assignmentof powers. Whetherdecentralizationwill exacerbateor ameliorategroup tensionsdependson suchfactors as the presence,or lack, of ethnic (or religious, racial, etc.) homogeneityin the subnationaljurisdictions, the nature of the political and social agendaof the regional ethnic elites as comparedwith that of the national authorities,and the location and fiscal powersover resources.Despitethe complexity of the issuessurrounding statestructure,thereappearsto be a presumptionthat decentralizationis likely to be an effective solution in deeply divided societies.7 Thomas Carothers'swork deservesclose reading by aid policymakers and practitioners,and by anyoneconcernedwith the dynamicsof the postCold War world. Our sketchyusehereof someof his conclusionsis intended to fill out the contextof internationaldevelopmentagencywork relevantto conflict prevention,and to convey the essentialpoint that agencies'contributions to conflict preventionthroughtheir traditional main business-promoting economicdevelopment--cannot be short-circuitedthrougha diversion into democraticengineering.It is all the more unfortunate,then, that the U.S. aid programhas in recentyearsmarginalizedthe resourcesand attention devotedto economicgrowth.

Developmentof Civil Society The role of civil societyhasbecomean importantareafor the study of both economicdevelopmentand the dynamicsof collective action. Civil society, in the particularform of independent"advocacy"NGOspursuingcivil rights, women'srights, and democraticprocessesgenerally,hasbecomean important subjectfor numbersof bilateral aid agencies.Encouragementof civil

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societyfor its economicdevelopmentrole, andfor its potentialenhancement of socioeconomicgovernance,hasbecomean objectof attentionandfinancing for both bilateral and multilateral agencies.For many years,donorswere drawn to supportinglocal NGOs for their self-helppotentialities.For small groupsof peoplewho were poor, powerless,and ignoredor unreachableby governmentservices,thesewere vehiclesto move from passivevictimhood to initiators of collective action to improve their local agricultural, health, housing,or other circumstances. In addition to spontaneous responsesto environmentalchallengesor market obstacles,people also have formed collective-actionorganizationsto defend immediateinterestsunder threat. Albert O. Hirschman(1984) observedthat the poor in Latin America "are usedto their poverty, which they bearin silenceand isolation, but the fact of being treatedwith injustice can bring out unsuspectedcapacitiesfor indignation, resistanceand common action." Hirschman'sresistanceexampleshad emergedin responseto "aggressionby society" (i.e., land swindlesby powerful and unscrupulouspersons)and destructionof slum housingand preemptionof small agricultural holdingsby "the stateas aggressor."His grassrootsexampleswere all being supportedby national "intermediary" organizations(social activist NGOs setup to train andpromotethe grassrootsentities)and/orby internationalaid donors.HirschmancapturesthebasicandclassicalNGO paradigmasfollows: [T]here existstoday an impressive,loosely integratednetworkof national and internationalorganizationswhich, at the level of any single Latin Americancountry,performsimportantfunctionsof education,public health, housingimprovement,agricultural extension,developmentpromotion of handicraftandsmall business,etc. It is as thoughboth the nationalandthe internationalconscienceabout basic economicrights of Latin American citizenshadoutstrippedwhat is providedby the stateso that complexsubstitute or supplementaryattemptsat assuringtheserights havecome into being.8 Whendonorstum to NGOs as instrumentsof conflict avoidance,they are seekinga different paradigm.Insteadof the classicself-help model, or the collective to act againsteconomicinjustice, they hope to empowerNGOs that wantto enhancea democraticpolitical culture,act againstgroupprejudice and victimization in any form, promoteaccommodationand understanding betweengroups in conflict, and in generalundertakeactivities designedto prevent violent dispute resolution.To be meaningful for internal warfare prevention,such activities must have effects on large regional or national stages.This also suggestsa needfor an additional and different perspective and program objective, which we might term distributional rather than

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functional-thatis, a focus on creatingand empoweringcivil society organizationsinternal to traditionally structuredbackwardgroupsup to the level of organizationand capability of the more advancedrival groups. Affirmative action policies (discussedbelow) are designedto favor individualsfrom a specifiedgroup(s).In effect, thoseindividualswho arehelped to gain (favored)accessareenteringthe mainstreamstructuresandprocesses of economicdevelopmentwhere they and othersof different ethnic origins now will jointly participate.But affirmative action may also be seenas a group rather than an individual-basedprogram. Subordinateor disadvantagedgroupsare commonlyperceived,evenby themselves,as lacking critical behavioralattributesof the dominantor more advancedgroupsin their society.Horowitz notesthat the "collective" sideof relative positioningis as important as the individual side. "Backward groups very often believe advancedgroupsto be more cohesive,betterorganized,more given to mutual cooperationandcollectiveeffort-includingin-groupfavoritism--thanbackward groupsare.,,9It is clear from his examplesthat thesecharacterizations (which Horowitz citesin a discussionof ethnic stereotyping)frequentlymirror reality. The Malay view of the Chineseminority as more highly organized was correct, although probably not any longer. Such collective organizationalthinnesscan be describedas a nearabsenceof moderninstitutionsof civil society.Programsto eliminatethis importantbasisfor invidiousgroupcomparisons,andfor real differentialsin groupstrength-ineffect, a collectivepreferencein civil societypromotion-mightmakea significant contribution toward conflict avoidancein a deeply divided society. Conversely,althoughthe narrowing of a civil-society gap might help reducehegemonicimbalance,it would alsodeepenthe structureof ethnic division. Divided countriesthat have ethnicity-basedpolitical parties tend to haveethnically exclusive,parallelcivil societyorganizationssuchas unions, chambersof commerce,and social organizations.1O The optimal objective might be to encouragedevelopmentof functional organizationsthat cross ethnic lines and include significant multiethnic participation. In any case, donorsshouldnot assumenaively that all civil societyorganizationsare inherently more pro-peacethan are political parties. As with many of the programmaticopportunitieswe are discussing,a donor bias in favor of civil-society capacity-buildingamonginstitutionally weakandsubordinatedgroupswould generallynot be feasibleif opposedby a recipientgovernment.In fact, somegovernmentshave madeknown their discomfortwith the ideaof a direct aid relationshipbetweendonorsandcivil society(or the local privatesector).As the World Bank noted:"The involvement of civil society and the private sectorin the aid coordinationprocess remainscontroversial.Most donorsstronglyfavor greaterinvolvement,while

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recipient governmentsexpressa variety of views, ranging from cautiously positiveto skeptical,or evenantagonistic.,,11Nevertheless,in a conflict-prone society,if donorsjudge that strengtheningcivil society would contributeto improvedcommunication,and a bettersenseof minority capability for nonviolent representationand participation, an aid program along theselines would be a propercandidatefor donorsto pursuein their overall dialogue with government. But what exactly is civil society,and what kinds of organizationsare relevantfor what particularobjectives?Under its broadestdefinition, the concept refers to all associations,exceptprivate businessand formal political organizations, whichare "betweenstate and family [and] which are separatedfrom the state,enjoy autonomyin relation to the stateand are formed voluntarily by membersof societyto protector extendtheir interestsor values."12The associationalareabetweenstateand family in developingcountries can be very large. It might include traditional kinship networks, patron-clientnetworks,tradeunions,professionalassociations,sportsassociations, cooperatives,farmer irrigation water-usergroups,advocacyorganizations,cultural organizations,welfare societies,and women'sgroups,not to mentioncriminal networks.In the many countrieswherean establishment religion has a close relationshipwith the state, only independentreligious groupsand hierarchies,and interfaith organizations,would fall into the area betweenstateand family. Although donorshave worked with such associations as water-usergroupsand village women'sgroupsin the normal course of developmentprojects,their interestin "civil society"hasfocusedon organizationsthat aim to influencepublic policy, primarily to move government and societyin the direction of greaterdemocracy.Thus, the United Statesat leasthastendedto work with a narrow rangeof organizationsand individuals, seeingcivil society as a strategicinstrumentfor advancingdemocracy. Given the breadthof the concept,efforts to supportthe developmentof civil society in transitionalsocietiescould in theory reachacrossquite a numberof organizations,associationsandcollectivities. In practice,however, they have not. The U.s. civil society programscarried out under a democracyrubric havefocusedon a limited partof thebroadfabric of civil society in most recipientcountries:nongovernmentalorganizationsdedicatedto advocacyfor what aid providersconsiderto be sociopolitical issuestouching the public interest-includingelection monitoring, civic education,parliamentarytransparency,humanrights, anticorruption,the environment,women'srights, and indigenouspeoples'rights. [Two] other areasof U.s. democracyassistance-media assistance,and aid to labor unions-alsorepresentefforts for the developmentof civil society,though

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when U.S. providersusethe term "civil societyassistance"they are usually referring specifically to their work with advocacyNGOs.13

In searchingfor the rolesthat civil societycanplay in conflict prevention, we candefinefour categories.First, political engineering:nongovernmental organizations(NGOs) dedicatedto changing-inways that promoteinclusion, transparency,and accommodation-specific governmentpolicies, the political institutionsand processes,and/orthe "political culture," that is, the generalorientationof the citizenry toward political behaviorand the proper exerciseof power. Second,conflict managementand resolution: traditional or modernorganizationsspecializingin good-officenegotiationand mediation, and in relatedresearch.Third, empoweringrepresentativeinstitutions ofan aggrievedgroup, whosecivil societyis limited to traditional internally orientednetworks.Fourth, bridge-building betweenhostile groups through promotionof common-interestorganizationsand activities that are (a) economic or professional,or (b) social, cultural, or charitable.A nuancedapproachwould try to distinguishamongthe types,functions,andmembership of civil society organizationsso as to focus on those most relevant to a program'sobjectives. Building networksamongprofessionaland intellectualelites may be particularly strategic. Some of theseelites may offer the best prospectsfor strengtheninginfluential opinion that favors accommodationand nonviolent dispute management.They may also be more receptiveto establishing(or reestablishing,postconflict) cross-ethnicassociations.I surmise that such groupswould includeeducators,medicalandmentalhealthproviders,social workers, feminists, athletic organizations,and various academicfaculties and"development"professions,includingeconomics,anthropology,humanities, engineering,and political science. Bottom-Up: Behavior Change and Civil Society For thosewho adoptKevin Avruch's "restricted"senseof conflict resolution (i.e., getting at root causesrather than relying on negotiatedbargainsbetweencombatantleaderships),interventionsaimedat psychologicalandperceptualchange,at alteringworldviews,deconstructingcategoricalprejudice, and socializing entirepopulationsto toleranceare deemedessentialfor establishing an enduringbasisfor nonviolentgroup relations.14 As removedas this perspectivemay seemfrom Realpolitik, many bilateral governmentaid programsarecarryingout small-scale,community-level, interpersonalprojects,on the assumptionthat reeducationand improvedinterpersonalcommunicationcan make practical contributionsto reconcilia-

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tion and conflict avoidance.For such activities to have a hope of significance,they mustbe replicableand scaledup to include politically meaningful numbersof communitiesand ordinary citizens. WhethergroundswellS againstaggressionas public (or group) policy succeedor fail will dependon the circumstances.But strong nonelite supportfor accommodativepolitics may well be a necessaryif not sufficient condition for the sustainabilityof peaceaccords. There are several areasunder this headingin which aid agencieshave conducteddevelopment-oriented activities that merit reconsiderationin the context of conflict prevention.Someinvestigatorsbelieve that formal education systems,startingfrom the earliestgrades,can havea significant,possibly lifetime, effect on how people view and behavetoward membersof ascriptivegroupsotherthan their own. Programsof multicultural curriculum design,classroomintegration,and integrationin sportsand other extracurricular activities have been widely adoptedin the United Statesand elsewhere,basedon the presumptionthat lifelong patternsof individual altruism or aggressiongrow at least partly out of early schooling experience.The potential contribution of such programsto subsequentadult propensities would, of course,be more limited in divided societieswhere different ethnicitiesresidein geographicallyseparateregions.In contrast,on the other hand, amicableinterethnic relations in leading urban areas,as in Brussels, for example,can contribute substantiallyto national conflict mitigation. Whereasprogramsto socializechildren and adolescentsto tolerance,to altruism, to the ideasof a sharedhumanitywith peopleof different ethnicity or religion, and to democraticvaluesare all undeniablyimportant,the determinantsof adult behaviorin theserespects,and the distinctionsbetweenindividual psychologyand the behaviorof individuals in groups,are complex phenomena. The experienceof somelocal NGOs working to promoterestorationof toleranceand pluralism in ethnically mixed Bosniancommunities(with financialand technicalsupportfrom USAID) illustratessomeof the practical potentialitiesanddifficulties of efforts to reshapeattitudesandbehavior.The NGOs had practicalobjectives:incrementalstepsto restoreinterethniccommunication,participationin the sameclassesandcommunityactivities (e.g., neighborhoodcleanupand restoration),and interethnic group counseling. Although reconciliation was a major objective,someof the NGO staff believed that the term "reconciliation" in Serbo-Croatian(as in English) implied a restorationof attachmentsthat wasinfeasibleso soonaftersuchbitter conflict. However,thoseNGOs working with youth (eighteenand younger) found that reconciliation, not merely restoredcommunication,was easily attained.IS

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One not atypical exampleis worth describingas an illustration of what ordinarycommonsensecanaccomplishevenunderinauspiciousconditions. In the so-called dividedcity of Gornji VakuflUskoplje, one voluntary organization locatednearthe streetseparatingthe Muslim (or "Bosniac") inhabitants from the Croat beganby offering computerand photographycourses not available in the schools on either side of the line with their separate ethniccomposition.At first the CroatandMuslim childrencameto the NGO facility on separatedays. Cordial interethnicrelations were restored,however, amongthe teachersat the facility. When summercamealong in 1997, the NGO offered seasidevacations(financedby Germanaid) to groups of teenagersunderteachersupervision.In this first round, the Muslim children went with Muslim teachers,the Croat with Croat teachers.In the following summerthe children chosewhich other children and teachersthey would prefer to join, readily crossingethnic lines and erasingthe previousethnic structuring.After this secondvacation,they begancrossingthe streetto visit friends in their homesregardlessof side.Although in 1999the youth center wasstill the only facility in the city whereCroatandMuslim teachersworked side by side, the programs werehaving "spread"effects,inducing teachers not connectedwith the centerto move themselves towardrestorationof prewar relationships.The numberof children participatingin centeractivities had risen to 2,500 and had drawn about 4,000 of the parentsinto involvement in the center'sinterethnicprograms. Onewould hopethat in time activities ofthis sort would thrive, involving enoughpeopleto bring aboutfundamentalchangein interethnicrelationsat the community level, sufficient to force local politicians to basetheir electoral appealson inclusionratherthanon separated constituencies. Threeyears was apparentlynot enoughto producesuchsignsof spreadeffect. No families had moved their residencesacrossthe line, no repatriatedrefugeesof either ethnicity had returnedto live in former homeslocatedon the "other" side,andthe city-formerly, asGornji Vakuf, a singlejurisdiction-remained politically divided, with separateadministrations.In general,the NGOs under this project throughoutBosniafound that the return to preconflict civil~ Mahaweli, ity andinterethniccordiality camemosteasilyto youth, thento mothers,and most slowly to adult males.The NGOs themselves,it is importantto note, were formed and staffed largely by women professionals(social workers, psychotherapists, etc.) working on a volunteerbasis.Aside from their desire to respondto the needsof the war's victims for social services,they commonly expresseddeepregretoverhow ethnonationalism hadarisenandoverwhelmedthe multicultural society Bosnia had enjoyedbefore the conflict, indeedstretchingback many generations. Theexperiencein Bosniapointsto severalconsiderationscommonto pro-

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grams of support to bottom-up NGOs pursuing conflict amelioration and reconciliation.First, in manycountriesan effort to empowerindividualswho have the motivation and capabilitiesto undertakebottom-upactivities will face the difficulty that the societyhasweakor no traditionsof self-propelled NGOs.Theseindividuals work, or previouslyworked,for government,or in privatepractice.Or they may be long on motivationand probity, but shorton trainedbackground.Almost universally,the NGOs remainsmall and cannot be sustainedwithout technicalassistance andexternalfunding. Externaltechnical assistancecan do its job in a very few years,especiallyif a local organizationis establishedasa permanenttechnicalsupportcenter.Donorfinancial supportmay haveto continuefor a much longer time before the local general public and/orprivatebusinesscommunitydevelopthe financial capability andphilanthropichabitsthat supportNGOsin wealthiercountries.Donor support,therefore,hasbeencritical for the NGO segmentof "civil society" development,a subjectwe return to below. Second,the enthusiasmwith which donors have seizedupon the NGO sectordoesnot meantheseefforts have been without problems.An important one to mention herehas beenthe problemof fit betweendonor preferencesand the objectivesand projectpreferencesof the local NGO initiators. To remaineligible for financial support froma donor that has turnedits attentionto a new subject,NGOsmaybe forcedto undertakethe donor'snewly favoredactivity in placeof the activities they were originally motivatedand competentto initiate. Thus, an NGO that starts outworking on reconciliation may find that its donor has switched attention to microenterprise.To maintain its original focus and survive, an NGO may haveto becomeadept at, and divert attentionto, the art of internationalgrantsmanshipfor finding replacementdonors.The problemof financial sustainabilityhasbeenwidely recognizedascritical for NGOsin developingcountries.Successin securing severaldonorsincreasesan NGO's reachand potentialimpact.It alsoforces the recipientto meeteachdonor'smanagementand reportingrequirements, and to bow to multiple programmaticpreferencesand restrictions. Third, the Bosniaprogramillustratesa genderbias, of U.S. assistanceat least, toward supportingNGOs dedicatedto women'sproblems,interests, and empowerment.This makessensewhen the objectiveis to addressproblems of war victims, refugees,and maternaland child health.As we have seen,NGOs run by womencan also serveas enteringwedgesin an effort to rebuild interpersonaland communalrelationships.However,such agender focus overlooksthe overwhelmingimportanceof adult malesin violent conflicts and the fact that the political actorsand opinion leadersin most of the societiesat issuearelargely men.It is a commonplacethat the femalesof our speciesare less bellicosethan are the males.It is also commonly assumed

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that strengtheningthe role of womenwill help preventconflict, evenif such strengtheninghas nodirect connectionwith the specific roots of a conflict. As the CarnegieCommissionobserved: There is great preventivevalue in initiatives that focus on children and women,not only becausethey are the main victims of conflict, but also becausewomen in many vulnerablesocietiesare an importantsourceof communitystability and vitality .... For women,this entailsnationalprogramsthat encourageeducationfor girls, women-operated businesses, and othercommunity-basedactivities.16 The genderpoint is debatable,of course,and restson two assumptions. One, greaterparticipation, organization,and training and funding support will leadto empowermentat different levels-fromwithin the family, to the local community,to groupand nationalpolitical processes. Two, womenare more likely than men to exercisepower to resolve disputesin ways that avoid violent conflict. There is much evidencethat NGOs at the local level canempowerwomenby freeing themfrom total financial dependence, loosening social restrictions,and strengtheningtheir collective voice in village deliberations.To my knowledge,however,no evaluationhas beendone to assesswhat impact such bottom-upempowermentmay have had on local interethnicdisputeresolution,or whetherand how increasedempowerment of women in developingcountries has affected political processeswhere they havepenetratedand risen in more than token numbers.Are the effects limited to "women's" issues,or has the presenceof women legislatorsand politicians also had moderatingand humanizinginfluence,especiallywhere womenhavereachedseniorranksin political parties,in their own social or ethnic groups,or in influential and decision-makingnationalpositions?Under what circumstancesand at what levels in a polity hasthe increasedpresenceof womenhad discernibleimpact?ThomasCarothersappearsto share donors' enthusiasmfor women's NGOs as instrumentsfor promoting democratization,but he notesthe openquestionsregardingthis connection, the superficiality of some of the thinking behind it, and the limitations to which women'sNGOs are not immune.(Although the apparentlyvoluntary participationof womenandgirls in the genocidein Rwandaand in the cadre of the Khmer Rougeare exceptionalcases,they serveas cautionsto facile generalizations. ) U.s. democracyaid doesinclude a growing numberof undertakingsdirectly relatedto women,but thereremainsa tendencyamongnumerous democracypromotersto view the subjectasa narrowspecialtyratherthan as a potentially powerful approachthat can usefully synthesizemany as-

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pectsof the democraticagenda.A focus on the political statusand role of women obliges aid providers to go beyond the forms of democracyto grapplewith the substance-how different sectorsof a societyare participatingin political life and whetherpolitical systems are representingtheir interests.It also ties togetherthe all too often separatecomponentsof the standard democracy aid template.It may entail simultaneouslyaddressing issuesrelating to electionsand political parties(such aspreparingandencouragingwomencandidates),stateinstitutions (increasingthe presence of womenin positionsof statepowerand the extentto which stateinstitutions areresponsiveto women'sconcerns),and civil society (heightening the degreeof civic organizationand participationamongwomen).... Programsto help increasethe numberof womenin political office may meettheir numericalgoalsbut run up againstthe fact that merely having more womenin office doesnot changemuch.Thoughwomen'sNOOsare the mostrapidly growing form of NGO in transitionalcountries,they still face thesameproblemasotherdonor-supportedNOOs of elitism anddisconnectionfrom their intendedbase.Nonetheless... it is impossible notto be struckby the unusuallyintenseinterestandenthusiasmthat democracy programsrelating to women often generate.It is a domain with notably strongpotential for further development.17 Fourth, we notedthat youth were easily drawn into postconflict normalization and reconciliationactivities. Conversely,most of the actual combatants in all violent conflicts are young males,even children. While the very youngboysarecommonlysaidto havebeendragooned(asin Mozambique), they also commonly becamesocializedto violence. Restoringtheir mental healthand resocializingthem in the processof postconflictnormalizationis one of the unusualproblemsfacedby theseparticularsocieties.The ideathat youth in particular,as a conflict-avoidancemeasure,can and shouldbe educated to insulate them againstviolence is attractive even if its efficacy is problematical.18 Fifth, if bottom-upprogramsare to have significant amelioration(or any other) effects, theyneedto be approachedwith the systematicconceptualization commonly applied to more standardsubjects.For example,to have more than isolated impact, they need to be replicable. They also need to extendinto a wide rangeof activities so that the bridge-buildingperspective becomesincorporatedinto different dimensionsof interpersonaland community life and affects the different social classeswithin the society. Individual NGOs should not be encouragedto extendtheir clientele, locations, or programcontentprematurely,beyondtheir managementreachand technical competence.Instead,replication and the developmentof complementary programscanbe achievedthroughsupportof networksofNGOsselected

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for their interest in the relevant activities. Local concentrationsof NGOs focus-workingwith with similar bridge-buildingor disadvantage-minority women,youth,or adultmen,throughactivitiesinvolving skills training,sports, neighborhoodimprovement,performing arts, cultural exchange,and so forth-are more likely to affect communal relationshipsthan if the same volume of activity is scatteredand unintegratedover a large area.Achievement of critical massalong such lines is more likely if good coordination existsamongall donorsinterestedin promotionof civil society. Finally, despitethe enthusiasmwith which donorshaveseizeduponlocal social serviceand activitist NGOs,donorsmay (as was the casein Bosniain the mid-1990s)view NGOs essentiallyas cheapservicedelivery vehicles.19 Insteadof sustainingtheir supportasan effort at NGO institution-buildingin Bosnia,somedonorsand internationalNGOs lost interestin the local organizations,shifting their attentionto othercountriesor subjects.Sustainability cannotbe approachedhaphazardly.Donors should be preparedto support effective NGOs until sustainabilityhasbeenachievedthroughincome-generating activities, membershipand local community or businesscontributions, and/orNGO masteryof internationalgrantsmanship. In countrieswhere none of the domesticsourceswill be significant options for yearsto come, donorsshouldconsidercapitalizingan independent,local endowmentfoundation that can act as a reliable sourceof core funding for operatingNGOs. Also, in addition to supporting individual NGOs working on the donors' chosensubjects,donorsshouldexaminethe legal framework. Sustainability of the aided NGOs and of the entire nongovernmentalorganizationsector may be at risk if the legal basisfor NGO existence,and the regulatoryenvironment, is undevelopedor hostile. Creation of an enhancingframework could be an importantsubjectfor technicalassistance. While bringing large numbersof people in opposingor hostile groups into harmoniousrelationshipsis critical if animositiesarewidespread,it would be a mistaketo overlookthe possiblebenefits frombottom-upactivities that involve only relatively small numbers.Forms of NGO organization,potential leaders,and the effectivenessof alternativeprogramsmay have to be testedin small pilot projectsbeforethe feasibility of scalingup to largenumbersof beneficiariescan be determined.Hirschmanasked,"What doesit all add up to?" in his essayon Latin American grassrootsorganizations.He cautionsthat doing good on any scaleshouldnot be denigratedby "comparing the resulting 'total' to someequally nebulousconceptsuch asthe General EconomicWelfare or the Prospects forDemocracy." Still, the questionremains,what effect can scatteredmicroprojectshave on the massof untouchedpopulation?Hirschmansuggestsimportantsocialchangebenefits.The projectswere providing youth a new voice, an option

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otherthanguerrilla warfare:"the lives of Latin Americanmiddle-classyouth havebeenenrichedby the openingup of this vast new areaof possibleendeavors."He speculatesthat in the caseofthe anti-authoritarianreactionsin Argentinaand Chile in 1982 and 1983,"it is conceivablethat the grassroots stirrings, togetherwith the searchingsof the social activitists, were an important underlying factor in preventingthe social quiescenceand introversion that arerequiredfor an authoritarianregimeto takehold." Nevertheless, Hirschmanstill envisagesmajor social changeas a function of the scaleof the changeagents'movement."A densenetworkof suchmovements,jointly with a large numberof social activist organizations,is boundto changethe traditionalcharacterof Latin Americansocietyin severalways,mostof which are not yet well understood.,,2o The Sri Lankan irrigation experiencesdescribedearlier illustrate how developmentprojectscaneitherexacerbatelocal communalrelationsor ameliorate themdependingon whetheror not the inherentopportunitiesfor bringing divided, evenhostile, local communitiesinto harmonious,economically meaningfulrelationshipsaretaken.The farmergroupsof the Gal Oya project havebecomecelebratedexamplesof on-the-ground,integrative,andconflictavoidingcivil society.Comparableopportunitiescanbe found in othertypes of projects: agricultural settlementschemeson land not previously occupied; farm-to-marketroad projects that traverseheterogeneouspopulation areasandthat arebuilt, andpossiblymaintained,usinglabor-intensivemethods; cooperativemarketing systemsthat include producersfrom different ethnic groups; pastoral projects embracingdifferent kinship groups; rural electrificationsystemsthat include consumercommunity representatives in their governance.The border zonesof contiguousethnic regionsshouldbe scrutinizedfor project opportunitiesthat could bring the different groups togetherin common-interestrelationships.As the Gal Oya projectalsoshows, socialengineeringmay haveto be an essentialcomponentof suchprojectsto ensurethat the designand workings of the new relationshipsare conducive to a positive outcomedespitethe previousdistanceor hostility betweenthe groupsinvolved. The creationof real commoninterestsis likely to enhancethe effectivenessof people-to-peopleprogramsthat hopeto changeattitudesand behavior throughsheerdiscussion.A largeconflict-management/resolution network hasdevelopedin recentyears.Organizationslike the U.S. Institute of Peace bring small groups of peopletogetherin seminarsand retreatsdesignedto breakdown barriersand stereotypicalthinking, and to facilitate negotiation and accommodation. Conflict-avoidancefacilitation throughdialoguecan operateat all levels, from local and youth groups up to national level decision makers.The

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CarnegieCommission's"Project on Ethnic Relations"(PER), for example, is working in Russiaand in Central and Eastern Europe,through "dialogue amonggovernmentofficials and ethnic leaders,"supportfor local conflictresolutioninstitutions,and training of conflict managementspecialists.The PER "brokers" ethnic disputes."Moderateson both sideswere able to develop partnerships,beginto devisepeacefulsolutionsandcompromises,and createan atmosphereof mutual respect."To reducethe chancesof conflict, PER adheresto certain methods-forexample,createcredible, neutral forums; redefinethe parties'self-interests;work regionally; maintaincommunication with opinion leaders;encourageindigenoussolutions.21 The focus is on the process.Obviously,this is a large subject.It involves many institutions and field projects and has been much studiedby scholarsof conflict and diplomacy. Becausethis important dimension of international peace maintenancelies outside thescopeof our own study, I mention it only in passingexceptto note that Churchill's precept-jaw-jawis betterthan warwar-will be more persuasive,as the CarnegieCommissionrecognizes,if thejaw-jaw restson a foundationof concretegrievancemitigation andinterest harmonization. In conclusion,it would be naive to assumethat civil societyis uniformly virtuous.Enthusiastsof civil societyhavetendedto equatecivil societywith NGOs, especiallyadvocacyNGOs, and to believe that civil society organizationsnaturally favor tolerance,accommodation,and democracy.Unfortunately, it has often been the casethat civil society supportsthe agendaof aggressivenational leaders,adding fuel to the flames. Donors need to be alert to the possibility, especiallyundernondemocraticsystems,that apolitical NGOs they havenurturedonly as programmaticinstrumentsmay be susceptible to being cooptedfor divisive purposes.Such coopting should not ariseundergovernmentthat is benign.Instead,donorsneedto be alert to the dangerthat excessiverelianceon NGOs could deprive a development-and equity-orientedgovernmentof resourcesand technical assistanceit would otherwisehave receivedto help improve its performance.The Netherlands Institute of InternationalRelationsstudy found that donor funding and relianceon NGOs had beenweakeninggovernmentsin WestAfrica. 22 This is a striking observationthat runs counterto the current voguefor civil society, and one that merits further explorationin otherregions.

Notes 1. SeeCarothers,2000, ch. 2, for a detailedaccount. 2. Ibid., p. 342. 3. Ibid., p. 343. 4. Ibid., p. 344.

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5. ManagementSystemsInternational,1996,p. vii. 6. Nordlinger, 1972,pp. 20, 36. 7. A recentexamplein USAID is cited by HeatherS. McHugh, in "USAID and Ethnic Conflict: An Epiphany?"in EsmanandHerring, 2001, p. 74. McHugh refersto a USAID paper(authoredby Harry Blair) as the basisfor a study on governance: "The conceptpaperdevelopedfor this evaluationcontainsvaluableindications on wherefuture agencyguidancemay bedirectedandincludessectionsrelevantto projects focusedon ethnicconflict. For example,in the sectionon benefitsof decentralization, the conceptpaperdiscussestwo strategies:decentralizationprojectshavethe potential to indirectly empowermarginaland ethnic groupswho find little or no political voice at the nationallevel; and decentralizationcan directly reduceethnic conflict." 8. Hirschman,1984,pp. 33, 92-93. Italics in original. 9. Horowitz, 1985,p. 169. 10. Ibid., 1985,p. 293. 11. World Bank, 1999,p. xi. 12. GordonWhite, cited in Carothers,2000,p. 209. 13. Ibid., pp. 209-210. 14. For oneexample,seeStaub,1989. 15. This accountdrawson Muscat, 1999. 16. CarnegieCommission,1997,p. 84. 17. Carothers,2000,pp. 345-346. 18. There is a "need to design projects aimed at youth and preparingthem for involvementandprogressiveassumptionsof responsibilityin society."GermanFoundationfor InternationalDevelopment,1996. 19. The referenceis to an evaluationby Ian Smillie, ServiceDelivery or Civil Society?Non-GovernmentalOrganizationsin Bosnia& Herzegovina.CARE/Canada, December1996. 20. Hirschman,1984,pp. 97, 98.Italics added. 21. CarnegieCommission,1997,p. 53. 22. NetherlandsInstitute ofInternationalRelations,1999,p. 90.

6. Economicand SectorPolicies Reforms,Preferences,and Harmonization of Interests

Across-the-BoardReform The internationaldevelopmentagencieshaveplayedan importantrole in the shapingandfinancing of the economicframeworkanddevelopmentpolicies of mostdevelopingnationsin the pasthalf century.Both the scopeand speed of the economic,social, and technologicalchangesin this period havebeen historically unprecedented. It bearsrepeatingthat, over the long run, both economicdevelopmentand modernizationhave beentides that raise most (but not all) boats.(Conversely,in countriessuffering developmentfailure, the economicebb tide has leftmost boatsstrandedor lowered.)In the early stagesof the developmentprocess,however,the distributionof the gainscan be very uneven.At various times, different groups may be left behind to experiencerelative or even absolutedeteriorationin their material circumstances.The plight of the loserscan be especiallysharpand pregnantwith conflict potentialities when their welfare deterioratesrelatively quickly, particularly if the deteriorationcan be laid at the door of the government. Recallhow the centralgovernment'sslow andseeminglyindifferentresponse to the typhoon in East Pakistanadded to the Bengalis' senseof regional grievancebeforethe breakaway.More commonly,grievanceshavearisenin responseto perceivedsins of commissionratherthan omission.When these sins are perceivedas outcomesof economicpolicies,externalagenciesassociatedwith the adoptionof the policies may also be implicated. As the policy front-runnersamongthe internationaleconomicagencies, the World Bank and the IMF havebeenthe principal targetsfor critics decrying the inequitiesand hardshipsattributedto policy changeand reform programs. Sound economic managementover time always requires policy adjustmentsto ensurethat changingeconomiccircumstances(often the consequenceof externalfactors over which a country'spolicy managershave no control) do not destabilizean economyor derail its growth. Structural adjustment,the targetof muchcriticism, differs from ordinary policy adjustmentin its scopeand timing. To restoreeconomicbalanceand growth to the numbersof Third World economiesthat had becomeseriouslydestabilized, the structuraladjustmentprogramsof the 1980sand 1990stypically called 195

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for a multitude of policy changes.The changepackagesrangedfrom the relatively incrementalto the drastic. Reform programstypically went beyond "stroke of the pen" changes,such as currencydevaluation,to include "structural"changes-that is, changesin the economicrules of the game,in the role of governmentin the economy,and in the relative extentof government economic directionand public ownershipversusprivate marketsand private property. The degreeof changean economyand society had to undergodepended on how severeand unsustainablewere the macroeconomicimbalances,and on how far (and for how long) previousgovernancehad gonein the way of establishingnonmarket,centrally administered,politicized systemsof resourceallocationandeconomicmanagement. Whereasthe changeprocesses in different countriesfrequentlycomprisedsimilar policy packages,the most thoroughgoingend of the reform spectrum-thedismantlingof the socialist systemsin the former SovietUnion andEasternEurope-hasbeendifferentiated underits own term of art, namely "economictransition." The economists' standardanodynecharacterizationof theseprocesses as"policy reform" does not convey the depth of changeentailed.As one investigatorhas observed,"Although eachelementof reform-price decontrol,privatization, stabilization, and so on-might seemfamiliar, the confluenceof so many elementsof suchmagnitudeis unprecedented. The word 'reform' is surely a misnomerfor what is occurring; 'revolution' is more fitting."! While this observation(written a few monthsprior to the collapseof the Soviet Union in late 1991)referredto EasternEuropeandthe USSR,it is alsoapt for many of the IMFIWorld Bank structuraladjustmentprogramsin mixed-economy developingcountries.In deeply divided societies,processesof such scope and systemicchange,and which are plannedfor implementationover relatively shorttime periods,are not likely to be neutralin their effectson different ethnic or socioeconomicgroups.They may well exacerbatesocial and political divisions, increasingthe potentialitiesfor violent conflict. The substitutionof competitivemarketsfor the administrativedetermination of prices,resourceallocation,and assetcontrol, which was characteristic of socialisteconomies,has beenat the core of the mainstream paradigm (the "Washingtonconsensus")and of the wave of economicreform that has swept acrossthe developingcountriesin the past two decades.It has been widely acknowledgedthat there will be losersduring thesetransitionsand that measuresneedto be incorporatedto protect the most vulnerable.It is less well recognizedthat marketsin deeply divided societiesmay not, over time, produceeconomicconvergencebetweenascriptive groups.Whether owing to history, geographicresourceendowment,discriminatorypractices, or otherreasons,competitivemarketsmay, undersomenot-uncommoncir-

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cumstances, widengroup divergences.The literature on structural adjustment appears tohaveignoredthis perspective. For example,researchersinto the politics of adjustmenthavefocusedon the questionof implementationviability. Whoseinterestsare hurt and how can governments(and aid agencies)limit that hurt and the resultingopposition to the program?The winners and losers are usually defined in traditional classtermsas measuredby incomedeciles,or by standardproduction factor groups-privateenterprise,organizedlabor, public-sectorenterprises, agriculturesmall-holders,and others.2 An examinationof the conflict potential of a structural adjustmentor market-transitionprogramin a deeply divided society should considerthe implications,in that context,of individual policy changesthat would affect socioeconomicgroups likely to be identified more by their communalor ascriptivecharacterthan bythe standardcrosscuttingclassandfactor classifications. Exampleswould be policies that (a) reduceor removeeconomic rights long held by particular groups; (b) reduceor end subsidiesor other transfersbenefiting particular groups; (c) transferland, manufacturing,infrastructure,or otherassetsfrom stateto private ownership;(d) changegovernmentexpenditureallocation by reforming the budget processto (inter alia) depoliticize expendituresby subjectingthem to technocraticreview and control; (e) centralizeor decentralizeaspectsof the fiscal system(e.g., allocationsof revenueand intergovernmental transfers betweenthe center and regional/provincialjurisdictions; taxation and borrowing authorities), which would shift the previous balanceof rights and controls; (f) reduce import tariffs and quantitativerestrictionsthat havefavored somegroupsat the expenseof others (e.g., through urban bias impact on the urban/rural terms of trade); (g) devaluea currency,and/orunify a multiple-ratesystem, thereby affecting income distribution through the changesin implicit taxes on, and subsidiesto, the producersor consumersof the affectedgoods;(h) reform labor marketsin the "liberalizing" shapeof eliminating hiring/firing restrictions(which would be conflict-amelioratingor enhancingif previous labor marketpolicy includedaffirmative action, dependingon whethersuch policy was designedto promoteor to counterdiscrimination); or (i) introduceor strengthensafety-netprovisionsto offset deleteriouseffectsthat reforms (suchasexchangerateliberalizationor creditexpansionceilings)might have ondefined groups. Thepotentiallyconflict-exacerbatingeffectsof thesechangescanbe greatly intensified if many of them are introducedat once under a packageof reforms. The political consequences can alsobe greatlymagnifiedif the differentially affected groups are concentrated(the Yugoslav case) in separate jurisdictions (provinces,republics, etc.) under a decentralizedfederal sys-

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tern, with the reform programin effect pitting someethnogeographic jurisdictions againsteachother or againstthe centralgovernment. Once the incidenceand grievancepotentials of the individual reforms have been identified,the possibleimpact of the reform policy as a whole shouldbe considered.The study of the interrelationshipsamongthe different structural changesinvolved in thesereform processeshas produceda large literatureand much debateover the pastdecade.A greatdeal of attention hasbeendevotedto issuesof timing andsequencing.Many of the individual reformstum out to be technicallyrelatedin waysthat makethe viability of somereformsdependenton the implementationof others.(For example, to be effective, privatization may require changesin accountingand audit standardsand reformsin the banking system.) Although the insightsgainedfrom researchinto theserelationshipshave beenimportantfor improving the designof reform programs,the really contentiousdebateshavebeenover the politics of timing and sequencing,with analystsdivided over which approachis more likely to ensurethe success and permanenceof the process.Advocatesof a "'big bang"-implementing and telescopingthe full packageas forcefully as possible-arguethat speed is essentialto deny vestedinterestsand otheropponentsthe time requiredto mount an effective blocking or underminingcounterattack.The proponents of more deliberateand gradualimplementationarguethe reverse:longer sequencinglowers the risk of a scuttling counterattackby reducingthe startup pain andgiving different groupsmore time to adjust.Somereformsmustbe introducedearly and strongly on technicalgrounds,suchas measuresto stabilize the economyandlegal reform prerequisitesfor privatization,taxation, banking system,or other componentsof the package.The timing of other reforms may havegreaterleeway or be inherentlymore time-consuming. The mostimportantstrategicchoicesarise... out of the interplaybetween economicsand politics. System-widereform is an intenselypolitical process:indeed,the main differencesamongreform strategieslargely reflect differing views of what will be politically sustainable.The time neededto reform institutions,createskills, and value assets,arguesfor a measured paceof reform. But a slower pacehas costs,including prolongeduncertainty andprobablya longerperiodof pooreconomicperformance,during which oppositioncan coalesceto block the reform process.A rapid approach,in which marketsareliberalizedevenbeforeadequatepreparatory steps,avoidsthe dangersof delay,but raisesthe potentialfor chaos.3 This summaryof the corepolitical economyissue(by a former chief economist of the World Bank and by a former chief of the World Bank'sSocialist EconomiesUnit) drew on the experienceup to 1991 of socialisteconomy

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transitions.It servesequally well as a caution for designersof reform processesin developingcountrieselsewhere. As we observedearlier, the evidencedoes notshow significant association betweenstructuraladjustmentprogramsin generaland subsequentconflict, except for the occasional"IMF riot" and the exceptionalcase of Yugoslavia.Onemight look for a relationshipif a structuraladjustmentprogramfell heavily and suddenlyon a portion of the populationthat was relatively poorandalreadypolitically mobilizedovergrievancesagainstthe state and/ora less affected,hegemonic"other." Many critics of structuraladjustmenthavedecriedits allegedinequities(e.g.,governmentbudgetcutsin the form of reductionsin food subsidiesfor needyurbanconsumersor increases in unemploymentcausedby ceilings placed on bank credit expansion). Though some of theseeffects (e.g., increasedunemployment)have been common,othershavenot. For example,many subsidybeneficiariesactually havebeenmiddle-classratherthan the more needypoor; healthservicecutbackshavenot affectedthe very poor in countrieswherethe servicesnever reachedthe poor to begin with. Somepolicy-changeadjustmentsmay benefit somegroupsof the poor while simultaneouslyhurting others.Thus,currency devaluationin African casesraised the (agricultural productexport) earningsof rural poor but reducedthe real incomesof those poor earning their living in the urbaninformal sector. In Latin America,by contrast,devaluationswere found to havehurt both the rural and urban poor.4A multiple-exchange-rate regimeis like a system of tradetaxesand subsidies, withdifferential price-raisingor price-lowering effectson different import or export goods.A policy reform that movesto a uniform rate applied to all trade transactionswill differentially affect producersand consumersof different goods,benefiting someand costing others. I cite thesefew examplesonly to demonstratethat a generalargument againststructuraladjustmentas being inherentlyantipooris fallacious.Furthermore,whereantipoor resultsdid emerge,the IMF often had no alternative thanto accepta government'sdecisionnot to pursuethe relevantpolicies to their targetlevels and timing, while the World Bank respondedby developing and funding "safety-net"programs. Even wherea structuraladjustmentprogram(or, more precisely,componentsof a program)is reducingthe welfare of someof the relatively poor, sucheffects(evenif not fully offset by safety-netprograms)are intendedto be of shortduration.If structuraladjustmentoverall achievesits stabilization and structuralreform purposes,then growth should resumeon a more sustainablepath,graduallyrestoringemploymentandincomelevels. (Thereare caveats,of course:for other reasons,sourcesof growth like investmentor exportsmay not recoverdespitethe enhancedpolicy environment.Bolivia

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has been a casein point.) Economistswho criticize structural adjustment have not arguedthat the reforms were not required; rather, they have assertedthat the IMF (and the U.S. Treasury,but not the World Bank) erredin imposing "shock therapy," that is, requiring the implementationof the full packageof reform policies within relatively short time frames, on the assumptionthat the political and economicviability of the reform would be threatenedif the sick patientdid not takethe bad medicineall at once.Thus, a prominentcritic, JosephStiglitz, accusedthe IMF andthe U.S. Treasuryof having deepenedthe 1997-1998crisis in EastAsia and worsenedthe economic transitionprocessin Russia.5 Other critics arguedthat the really sick patientswere the poor. To the extentthat budgetstringencies,job layoffs, or otherelementsof the process fell on those owning the fewest resourcesto tide themselvesover before economicrecovery,the adjustmentprogramsat least should be redesigned to include social safety nets.An essentialpoint was often ignoredby critics of the earlier structural adjustmentprogramsgoing back to the late 1970s, namelywhat would havehappenedhadtheseprogramsnot beenundertaken? The dilemma this oversight appearsto place upon the IMF and World Bank is illustratedby the NetherlandsInstitutestudycited earlier.Recall that the NetherlandsInstitute cited dissatisfactionover weak governmentcapacity to deliver servicesas a factor contributingto the outbreakof conflict. The institute views the budgetstringenciesof World BanklIMF-sponsoredstructural adjustmentas further underminingthesecapacities,thereby in effect contributing to conflict.6 Conversely,the study'S examinationof the Sri Lankanconflict is said to show that "economicdecline and stagnationprovide mobilizing incentivesfor extremistleadership.,,7If economicdecline does hold such potentiality it must be reversed;but reversalis usually impossiblewithout the initial stabilizationreformsnormally containedin structural adjustmentprograms,reforms that may unavoidablyrequire reducing governmentexpenditurein order to restorefiscal balance. No criticism of any public policy that doesnot try to take accountof the alternatives-doingnothing, or adoptinga different policy--canbe takenat face value.Wheresuchefforts havebeenmade,they indicatethat

1. failure to undertakeany significantpolicy changewould haveworsenedthe position of the poor, quite apart from the increasinggeneral economicdeterioration; 2. the successfulcasesillustratehow policiescanbedesignedto avoid, or mitigate, adverseeffectson the poor; 3. time doesmatter,that is, a fasterreturnto sustainablegrowth is best for sustainingand enhancingthe well-being ofthe poor; and

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4. the particularsof eachcountry situationhavehad major impact on the distributionalconsequences of policy alternativeswithin an adjustmentprogram. The last point is especiallypertinent. It reinforcesthe importanceof indiof conflict risk, quite apartfrom poverty impact vidual country assessments analysisfor its own sake.Whatevermay be the elusiveupshotof the debates concerningpast structuraladjustmentand poverty, the apparentdetermination of the IMF andWorld Bank (respondingto the chargesof socialinsensibility) to give povertyimpactandsafetynetshigh priority shouldat leastlessen inequitable,short-termdistributional effects of stabilization and reform programstheseinstitutions,and associatedbilateral donors,supportin the future. In sum, within the overall consensustherehasbeen muchdebate.Economists have differed on details, timing, the reasonsfor regional and country performancedifferences,the methodologiesusedin econometricexaminaexample,contion, and the needfor adjustmentswithin the consensus-for cerning financial marketsfollowing the setbacksexperiencedby the East Asian "miracle" countries.The structuraltransitionsundertakenby the majority of developingcountries(including EastEuropeanandex-Sovietstates) area recentdevelopment,still in the early stagesin mostcases.Consequently, there has beenrelatively little empirical study of the relationshipsbetween transition and violent internal conflict. I tum now to a closer look at some specific areasof economic policy reform and structuralchange.Theseare illustrations of policies with potentially significant distributionalimpactamongcompetinggroups.Theexamples are intendedto look at policy reform in the context of conflict potential and obviously cannotbe takenas full treatmentsof the policy changesin question.

Privatization:Transferof StateAssetsto PrivateOwnership The saleof government-owned enterprisesto private ownershiphasbeenan importantcomponentof the transitionprocessin mostcountriesundertaking structural reform. Privatization is a standardelementof the reform agenda promoted,if not demanded,by the World Bank and the IMF, and it hasbeen supportedby donor governmentsin principle and with technicalassistance. The unloadingof public enterpriseshasalsobeenan importantpart of structural adjustmentprogramsin countriesthat had long beenmarket-basedbut that had traditionally reservedfor governmentownershipcertain sectors (e.g., power generationand distribution), or had adoptedthe principle of governmentmanufactureof "commandingheights" productsof heavy industries(e.g., steel).

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Although there have beenexceptions(such as someFrench stateenterprises),the caseagainstgovernmentownershipand managementin developing countriesrestson wide experienceof inefficiency andeconomicdrag. Managersin centrally plannedeconomiesfaced distortedincentivesthat sooneror later led to poor enterpriseperformance.Transition requires changesthat introducefinancial disciplineandincreaseentry of new firms, exit of unviableones,andcompetition.... Oncemarketshavebeenliberalized, governmentscannotindefinitely control large partsof a dynamic, changingeconomy.[Privatizing] ownershipis the best way to increase 8 competitionand improve performance. In addition to its salutaryeffects on enterpriseefficiency, privatization can also contributeto economic reformand modernizationby spurring the developmentof a country'scapital marketand ancillary legal, accounting,and other servicesectors. Despitethe now extensiveexperiencewith privatizationin a hostof countries, and the availability of a library of casestudies,much debateremains amongeconomistsand political scientistsover issuesof methodand timing. The economicadvisability of privatizing in principle is seldomquestioned, eventhoughthe two mostoutstandinggrowth performers,Taiwan andSouth Korea,wereclearlaggardsin this respect.Thesecountrieshad unusualinstitutional characteristicsthat enabledthem to avoid or minimize the management inefficienciesand corruptioncommonlyfound in the public enterprise sectorsof developing countries. Different methods and sequencesfor privatizationhavebeentried underdifferent economicand political circumstances,with varying results.Enterpriseshavebeensold (a) to domesticentrepreneurs,foreign ownership,or joint local/foreignownership;(b) through management-employee buyouts; and (c) through vouchersystemsopen to the generalpublic. Under less orderly circumstancesand weak regulatory systems,public enterpriseshave been privatized "spontaneously,"that is, takenover by workers,or acquiredat below-marketvalue by political insiders. In countrieswith entrepreneurialclassesinexperiencedin management of large firms and/orhaving limited accessto capital, privatization of large state enterprisesmay be possibleonly if the governmentis willing to sell ownershipshares,often a controlling interest,to foreign investors. Apart from the different efficiency outcomesof thesevarious routes to privatization,the processeshavedrawn much attentionto their political outcomes.The Russianexperiencehas beenparadigmaticfor its lack of transparency and the acquisition of public-sectorassetsby tycoons who have then beenperceivedas wielding enormousbackroompolitical influence,an outcomeseen as undermining public support for the entire transition to a

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market-based economyandfeedingpublic cynicismregardingthe natureof the political transitionto a democraticsystem.Crossingfrom the economicto the potentialpolitical effectsof privatization,a World Bank review concludedthat "Poorly managedprivatization,evenif it delivers short-term revenue or performancegains,may be seenas corrupt or highly inequitable,concentratingeconomic and political powerin the handsof a domesticelite or foreign investors ratherthan expandingan independentand decentralizedmiddle class."9 Two perspectivesof this critique are interestingas illustrationsof how a traditional, "technical" analysis overlooks potential outcomesin conflictrisk countries,outcomesarguablyof much greatermomentthan the merely economic.First, the World Bank'sperspectiveseessuch political effectsas suboptimalefficiency drags, unfortunateresults from a processof institutional changethat derives from, and is integral to, an economic reform program.These"crony capitalism"outcomesaretechnicaldistortions,opportunistic productsthat could be avoided were the processnot "poorly managed."Somecritics of the Russianexperiencehave cited the plunderingof stateassetsby a new classof oligarchsas a consequence of a fundamental error (attributablein part to the flawed adviceofthe IMF and the U.S. Treasury Department),that is, the disposition of the stateenterprisesbefore an adequateinstitutional infrastructurefor a market economyhad beenput in place.lO Second,the political economylens through which this undesirable outcomeis seenis traditional for economicanalysis:the winners and losers are characterizedby economicclass (a socially undifferentiateddomestic elite on the one hand, and everyoneelse, the nonelite, on the other) and by functional groupssuch asconsumers,workersin the privatizedfirms, other enterprisestakeholders,and so forth. The effectsand desirability of pri vatizationmay look very different if the policy is introducedas an instrumentfor the extensionof an elite's political dominance.A processof political spin-off to reward elite supportersis not likely to be structuredto achieveefficiency results.Though technically devolved, the privatized enterprisesmay actually increasethe extent of the political authorities'economiccontrol comparedwith the previoussituation under which the state-ownedentities were controlled by diverse piecesof the bureaucracy.If the governingelite belongsto-andis using privatization to enhancethe interestsof-a dominantethnicity, the processcould widen ethnic power disparitiesand exacerbateperceptionsof ethnic-groupexclusion and exposureto fundamentalpolitical risk. Whereasseveralinvestigators haveexaminedhow politically driven privatizationmay produceperverse economic outcomes,one study of privatization under military regimesin sub-SaharanAfrica found empirical support for the existenceof political (ratherthan efficiency) derivation and ethnically skewedoutcomes.

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To ensurecompletepower,privatizationhasoften beenusedto control the country economicallyand politically.... Almost all of the African countries with military (as well as some civil) governmentshave adopted privatizationon purepolitical groundsratherthanefficiency.... Governmentswhich undertakeselective(political) privatizationusually belongto a certainparty or ethnic group. Their policies are, thus, more likely to be partisanthan nationalistic.11 Acquisition may be additionally skewedthrough the allocation of politically influencedbank creditsonly to the favored buyers.Privatizationthen transfersstateassetsto the personalownershipof the sameelites who controlled theseenterpriseswhen they were still stateproperty,or to the ownership of their clientele.Severalanalystshavenotedthat the privatizationthat sweptsub-Saharan Africa in the 1980sand 1990sproducedexactly this unintended consequence.Even if a governmenthad no intention to skew privatizationfor political purposes,the stateassetsmight end up owneddisproportionatelyby membersof one ascriptivesegmentof a populationbe(suchasabsenceof openprocess,insider causeof "institutional" weaknesses access,or below marketor nonmarketvaluation)that facilitate their capture by well-positionedgroups.An ethnicallyskewedprivatizationmight become a divisive issue,especiallyif the samegroup of beneficiariesappearsto be gaining disproportionatelyfrom other aspectsof public policy. In the Mozambiquecasethe aid techniciansassistingthe privatization processarguedthat, amongthe groupsnot acquiring stateenterprises,there simply were no capableentrepreneurs.The experiencein Kenya was very different. Thereit was widely recognizedthat public-sectorenterpriseswere amongthe main sourcesfor financing patronageand political support.In the first postcolonialperiod, underJomo KenyaUa'spresidency,the benefitsof this systemaccruedlargely to the Kikuyu. Underthe succeedingDaniel arap Moi presidency,the ruling coalition of non-Kikuyu tribes has redirectedin their favor the flow of resourcesand rents undergovernmentcontrol or influence.Whenthe privatizationprocessbegan,the interestsof thosegroups, andof the Moi administration,appearedthreatened.The World Bank andthe IMF were deeplyinvolved andcognizantof the potentialdistributionalconsequences.Unlike in the Mozambiquecase,the external actors in Kenyan privatizationmadea sustainedeffort to depoliticizethe process,which meant reducingto somedegreethe salienceof tribal identity as a factor determining ownershipoutcomes.12 Thesepotentialoutcomeson the relative positions of the elitesof ascriptive groupshave generallybeenignoredby the analytic studiesof privatization. In onereview of privatizationexperience,a World Bank studythat was cited

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as an advanceover "earlier partial studies"becauseit examinedthe effects of divestitureon "aU importantactors"apparentlydid not include ascriptive groups per se as "stakeholders"or "important actors" in the outcome.The review discussedmethodsof addressingthe political problemsthat might arise when foreign ownersacquirestateenterprises,but did not considerhow such devicesmight meet thespecialproblemsof domesticownership,which is viewed as ascriptively "other" by a significantfraction of the society.As the investigators noted,the distributionaleffectsof privatizationneedmorethoroughstudy.13 A political economyperspectivegoing beyond an oversimplified two-class model, of elite and nonelite actors, should be adoptedfor both comparative analytic studiesand for individual country policy assessments. Finally, it is worth reiteratingan observationoften madeabout a related reform consequencethat may be necessitatedby privatization. Where state enterpriseprofits havebeena major sourceof revenuefor governmentbudgets,a governmentthat is divesting must developalternativerevenues,usually through a mix of improved administration and collection and the introductionof new taxes,stepsthat in themselvesmay haveimportantconsequences for wealth distribution and for the relationsbetweentaxedgroups and the state.

Labor Market Liberalization Although seldoma centralconcern,labor marketreformsmay figure in structural adjustment. Animportantobjectiveof adjustmentprogramshasbeento increaseindustrial competitivenessand flexibility. In addition to such measuresas price liberalizationand investmentand productionderegulation,industry may needaccessto a more efficient labor marketas a complementto the other areasof liberalization. As explainedin a World Bank review of adjustmentprogramsduring 1980 to 1992, Labor marketregulationsalso servedto impedethe flow of resourcesto newly expandingsubsectorsin such countriesas Cote d'Ivoire, Ghana, Indonesia,Mexico, and Senegal.In Cote d'Ivoire, for example,all firms are required to hire personnelfrom a single, governmentemployment agency.Hiring and firing are tightly controlledby the agency,which also sets industrial wages.Undoubtedly,theseregulationslimited the private sector'sability to respondto the extensiveliberalizationof the exportsector that took placeunderstructuraladjustment.14 The review concludedthat regulatoryreform, including reform of labor market controls,hadbeeninadequatein manyof the countriesundergoingWorld

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Bank-assistedstructural adjustment,thereby limiting the gains that could have beenrealizedthrough the price and other reforms that had beenintroduced. It recommendedthat the Bank neededto "refocus its attention on domesticmarket structureand performance." Without gainsayingthe importanceof flexibility in the factor markets,proponentsof freeing up labor marketsneedat leastto be awareof the possibility that liberalizationin ethnically divided societiesmay have perverseoutcomes. RobertKlitgaard has warnedagainstfacile assumptionsin this regard: [T]he creationof a nationaland competitivelabor marketdoesnot necessarily leadto a reductionin ethnicinequalities.The colonial periodin many countriesmarkedthe first establishmentof a large-scalestateapparatus, and it often led to an accentuationof both the perceptionand the fact of ethnicdifferences.The Brazilianexampleis interesting:"the creation,consolidation, andgrowth of the competitivesocial systemdid not help" the newly emancipatedslavesovercometheir economichandicaps.Contrary to the optimism of someeconomists,there is ampleevidencethat ethnic tensionsand inequalitiesare frequently exacerbatedrather than removed by the onsetof competitivemarkets.15 Klitgaard makesthe importantobservationthat this outcomemay derivefrom marketimperfectionseven in the absenceof deliberatediscrimination. [I]f, for whateverreasons,groupsdiffer objectively in performanceand if information on individual performanceis scarceand expensive,then we cannotcount on free marketsfor labor or fair merit systemsto drive out discrimination... . /finformation is poor enoughand it is difficult to vary wagesaccordingto performance,then theforces ofcompetitionmay even reinforce ethnic inequalities. ... [A]n employermay have no intrinsic preferencefor one ethnic group over another,yet may rationally hire membersof groupswith higher expectedproductivity.16 Regardlessof whether an ethnically segmentedlabor market derives from history, prejudice,or economicstructure,one responsemay take the form of affirmative action, or preferencesystems,to which we now turn.

Changesin Group Economic Rights Structuraladjustmentis only one of many policy-changeprocessesthat reshuffle economicrights. Loss of economicrights a group has alreadypossessedcan be a major sourceof grievanceand conflict The rights may be

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traditional, say from long occupation,or enshrinedin law. The rights might be individual or pertainto a group'spublic property.The lossmay be actualor only a credible threat The loss might developgradually over time or be imposed suddenlyby edict or legal process.The changesin group economicrights may beunintendedconsequences of reformsundertakenonly for economicpurposes. The recentconflict in the Moluccas was a violent responseto an actual but gradual erosion of traditional individual economicrights, compounded by perceptionof a generalthreatof cultural and local powerloss. In Nigeria, the EasternRegion'sreductionsin revenueallocationsfrom oil production (of which the East was Nigeria'slargestsource)was a major grievanceprecipitating the Nigeria-Biafracivil war of 1967 to 1970.The breakupofYugoslavia,as discussedearlier, has beenattributedin part to the threatof loss of groups' public economicrights understructural adjustment.Most often, strategiesfor maintainingthe viability of deeply divided multiethnic states centerarounddevolution (ratherthan mere administrativedecentralization) of powers.Devolution respectingsubjectssuch as education,culture, judiciary, and someeconomicmattersis common.The federal or centralgovernment commonly retains internal security, defense,foreign policy, and the core economicpowersover monetarypolicy, foreign exchange,and publicsectorexternal debt. Devolution in Yugoslavia had gone further than elsewhere,certainlyfurther in economicpolicy management thanwould normally be consideredprudent.The Yugoslav disintegrationprovidesan exampleof the risks of moving in the oppositedirection, of withdrawal of group economic rights previously devolved. While the senseof grievancemay be more acutewhen a group loseseconomic rights it haspreviouslyenjoyed,grievanceover governmentdenial of accessto economicrights being newly createdor distributed can be acute enoughto fire up a movementfor secessionor conflict. As examples,such denial of economicrights could pertain to administratedallocation of foreign exchangeearnings(the East Pakistancase),to land distribution (as in the Sri Lankan case),or (in Mozambique)to accessto stateenterprisesup for privatization or to the bank credit that potential buyerswill needto acquire those enterprises.As we have seen,donors may be involved in the policy deliberationsrespectingthe creationand allocationof new economic rights, or the reallocationof existing rights, and in associatedfinancing. The political economyof such processesshouldnot be ignored.

PreferencePolicies Preferentialgovernmentpolicies,and/orpreferentialprivate-sectorpractices, havea long history. The grantingof preferencerights hasrepresenteda ma-

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jor structural changein the many countries where such preferenceshave beenadopted,sometimesto widen, sometimesto narrow, economicdifferences.Many countries retain large group differentials in economic status and opportunity,either as legaciesof now discreditedpasteconomicstructures and policy regimes,or as the result of currentpolicies and practices. Negativepreference(discrimination)andpositivepreference(affirmative action)regimescantakefour generalforms: (1) onegroup (or setof groups) dominatesanothergroup (orset)both politically andeconomically;preferences are discriminatoryand exclusionary,with inequalitiesmaintainedby a policy regime that favors the already dominant; (2) one group(s) dominates(or, in democraticsystems,preponderatesover) a minority group(s) politically and economically,but the preferencesystemaims to reduceinequalities,favoring the nondominant;(3) one group(s) dominates(or, in parliamentarysystems, preponderates) politically, while anotherdominates(only) economically;the preferencepolicy regime may be compensatoryand inclusive, employedto reduceeconomic inequalitiesby favoring the politically dominant, or (4) confiscatoryandexclusive,a zero-sumprogramat the expenseof the politically subordinate. In practice,the distinctionsbetweengroupsand their relative advantages or deprivationsmay not be asclearasthesecategoriesimply. Rigorouscrosscountry comparisonof preferenceprogramsand their outcomeswould be difficult. Apart from data problems,the programshave differed in policy content,have rangedin scope,and have beencarried out in very different contexts(e.g., India, the United States,and SouthAfrica). Preferencepolicies combinedwith large-scaleresourcetransfersare likely to have more powerful effectsfor their beneficiaries(or on their victims) than preferences alone and would make the identification of preferenceeffects alone even more difficult. By denying a country the potential growth contributionsof the excludedgroup,programsof extremeexclusionmay actually work to the disadvantageof the putative majority beneficiaries(as in SouthAfrica, and in EastAfrica and Burma after the expulsionsof SouthAsian commercial classes). In logic, preferentialpoliciesdesignedto eliminate(or reduceto specified levels) differencesin the social or economicopportunitiesor circumstances of different groups within a country should be temporary.Once the objectives are achieved(over a period that realistically may haveto be measured in years, if not a generation),the policies would no longer be neededor justifiable. If progressalong the way toward the objectivesfalls short of what was anticipated,the policies and objectivescould be reevaluated,and adjustedor strengthened. After achievement(regardlessof how much of the changecan be attributedto the policies in question),continuedapplication

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of the preferentialpoliciesmay becomeperverse,putting the previouslyrelatively advantagedgroup(s) at a disadvantage.The policies could then be seenas unjust anddiscriminatoryby the groupsnot eligible for the preferential treatment.In the U.S. experience,a backlashagainstsomeaffirmative action preferences,both in university accessand in hiring practices,hasdevelopedlong before the broad objectivesof interethniceconomicequality havebeenachieved. Policies favoring one group over othersmay appearin a very different light dependingon the economiccontext. Unequal distribution of only the incrementsof income and economic assetsmay be acceptableto, even if disliked by, the economicallyadvantagedgroup if strongeconomicgrowth is yielding generousincrementsto all populationsegments.By contrast,discriminationthat appropriatesexistingassetsof onegroupor expelsmembers of the nonfavoredgroup from residence,occupations,or employmentthey already occupy is overtly negative-sumand unmistakenlypunitive and expropriable.Preferentialaccessto increments-iftransparent,negotiated within a politically inclusive process,and framed with specific cutoff criteria-may be seenas morally justified and serve to avoid resentment sufficient to support ethnicradicalization. As with so many programsof social engineering,the history Of economic preferencesshowsmixed outcomes.Writing in 1990,ThomasSowell came down againstpreferencesbasedon his review of experiencein severalcountries. He arguedthat the preferencesoncelegislatedusually remain in force despitetheir presumablytemporarynature.Further,political pressurestend to expandpreferentialaccessto includeeverincreasingother"minorities" or "disadvantaged"groups,as hasbeenthe case,for example,in India. He also arguesthat the numbersshow the policies are not very effective after all. After anotherdecade,however,the recordlooks lessnegative. In the United Statesa substantialblack middle classhas emergedalong with a conservativereaction among some African-Americanintellectuals againstfurther extensionof affirmative action. Therehasbeena substantial narrowing of the wage gaps betweenthe "white" majority and the designatedminorities. Black urban youth continueto posecomplex problemsof absorptioninto the mainstream,but thefact thatthe preferentialpolicieshave not been a completeanswerto the difficulties facing the remainingdisadvantageddoesnot gainsaytheir effectivenessin facilitating the inclusion of a significant portion of the populationeligible for thosepreferences.For the purposesof this book, however,the Malaysianexperienceis more apposite andits outcometo datehasbeenmuchmore positivethan in Sowell'searlier judgment. The main economicobjection to preferentialpolicies has beenthat they

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distort and lower the efficiency of marketsby interposingadministrativerequirementsand by creating artificial incentivesand disincentives.For example, for the rational employer whohires and retains workers basedon skill and performancecriteria, a governmentstipulation that he must hire (usually, somepercentageof) workers of a specifiedascriptivegroup, even if they arelessqualified than otherapplicants,will lower productivity in the firm andraisecosts.While the nonpreferredgroupsas a whole havepresumably beenenjoying disproportionate economicrewards(which is the rationalefor introducingaffirmativeactionpreferences),nonpreferredindividuals may have to bear private costs. Taxation to finance transfersto benefit a disadvantagedgroup may have the effect of reducingthe incentivesfor the taxedto work at the now reducednet incomelevel. An IMF handbookcapturesthesedysfunctionaloutcomes:"[M]easuresaimedat addressingdistributional objectiveshave an efficiency cost. There is thereforea trade-off betweenequity and efficiency that implies a limit to the amountof redistribution which canbe undertaken."l7The micro costsmay add up to a macroefficiency drag. The overarchingbenefit-socialstability wherereducedinequalitieshave helpedreducethe risk of conflict-suffersin a comparisonwith the costsof market interventions becausethe reality of the benefit dependson a counterfactualargument:the preferenceshave helped preventconflict that would have entailedheavy economic andhumanitariancosts had it taken place. Obviously, no measurementis possibleof a scenariothe extent of which is only imagined, even though possibly ranging up to catastrophic levels.The what-if comparisonlooks very credible,however,in somecases. In Belgium, both the languageissueand the accommodations it hasrequired have "exactedcostsin governmentefficiency and money and, in nontrivial waysfor some,traditionalindividual andfamily prerogatives,but not in lives or civil order, when comparedwith otherdeeplydivided societies."l8In the caseof Malaysia since the 1969 riots, the restorationand maintenanceof social stability, squarelybasedon the extensivemarket-interventionpreferencessystem,hasavoidedrecurrenceof ethnicconflict andenabledthe country to record oneof the highestgrowth outcomesamongdevelopingnations for nearly threedecadesbeforethe interruptionfrom the region-widefinancial crisis of the late 1990s. Preferencesin the educationsystemhave beenparticularly importantin countries employing affirmative actionpolicies.Their importanceflows from the plausiblepresumptionthat humancapital disparitiesare at the heart of social and economicinequalities,and that educationalequality is a necessary, if not sufficient, condition for eliminating other inequalities.Whether or not educationalpreferences(suchas accessquotasand differential schol-

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arshipallocation)easeor exacerbategroup relationsdependson the context and the political processesthat lead to adoptionand then modification and phasedown.In Sri Lanka, the university quota policy in favor of the underrepresented Sinhalesemajority reinforcedthe Tamil perceptionof general exclusioncausedby languageand land policies.In Malaysia,the Malay university preferencescausedethnic Chineseresentmentbut were only one elementofthe generalbargainandwereput in placeby the multiracial powersharingcoalition. In both Malaysia and Tanzania,as quota policies turned away many studentswho would otherwisehave qualified for entranceon merit, parentsrespondedby sendingtheir children to schoolsin other countries and by creatinga demandfor local private schools,to which education entrepreneurs respondedby creatinga privateschoolsector.The privatecosts of the minority-studentfamilies were arguably more than compensatedfor by their sharingin the public good of nonviolent interethnicrelations.The stimulation of private-sectoreducationwas an unintended,but additionally in both cases. beneficial,consequence In a critical vein, Horowitz pointed out some of the efficiency costs of quota systemsthat, perhapsunavoidably, lower entrancestandardsas preferencedplacesbecomefilled with studentswho would not otherwise havebeenable to gain admission.19 Becausethe relatively poor preparation (or rural, cultural, or other presumedcauses)was part of the problem the educationalpreferencewas designedto help overcome,the lowering of admission standardsshould be seenas indicating a needfor complementary strengtheningof the primary and secondarysystems,not as a weaknessof the preferenceconcept. The preferencesystemexperiencesin Sri Lanka and Malaysiashow how powerful educationadmissionproblemscan be as an ethnic issue. In Sri Lanka,"a new wave of Tamil separatistviolence,including the assassination of policemen,rather clearly flowed" from the quota and entrancepreferencesfor Sinhalesestudents.Horowitz cites a Sri Lankan writer who concludedthat the system"convincedmany Sri Lanka Tamils that it was futile to expectequality oftreatmentwith the Sinhalesemajority. It hasimmensely strengthenedseparatistforces with the Tamil United Front and contributed to the acceptanceof a policy of campaigningfor a separatestate."20Conversely, educationalpreferencesmay contribute powerfully to ethnic harmony andconflict avoidance-again, dependingon context,implementation flexibility, and private alternatives. As the Malaysiancaseillustrates,preferencescanmakea substantialcontribution to reducinghistoric inequalitiesof participationandeconomicpower in private business.Educationand businesspreferencescan be mutually reinforcing. The increasingnumbersof school graduateswith technical and

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managementskills and who belong to ethnic groups previously absentor underrepresented in businessprofessionsandtradesenlargethe pool of those capableof taking advantageof the licensing, credit, ownership,and other businessopportunitiesset aside for the preferenceeligibles. Although Horowitz correctlyjudgedthat 1981 (the yearof a reporthe wrote for USAID on policies to deal with ethnic conflict) was too soonto draw strongconclusionsfrom the Malaysianexperience,his studyremainsuseful for its discussion of someof the problemsthat may emergein the early yearsof a business preferenceprogram.For example,accessto licenses, contracts, or otheropportunitiessupposedlysetasidefor a preferredethnic group may continueto be capturedby establishednonpreferredfirms that hire front men or give seniorpositionsto token ownership.Corruptionof the civil servicemay increaseas membersof nonpreferredgroupspay bribesto obtain accessthey would otherwiselose. (Horowitz expressedconcernthat the increasedcosts of doing businessto avoid the effectsof businesspreferencescould discourage investmentin Malaysia or causecapital flight. While someethnic Chineseentrepreneursdid emigrateto other countries-morelikely to escape the totality of ethnic politics and the preferencesystemsratherthan merely the extra costsof doing business-thequantitativeeffect on investmentand developmentin Malaysia was apparentlynegligible.) Governmentalagencies set up to help Malay entrepreneurswere constrainedpolitically from collecting on the loans they had extended. Drawing on Indian and Malaysianexperience,Horowitz cited severalof the problemsthat arosein the programsthesetwo countries(or individual Indian states)undertookto install ethnic preferencesin employment.Here also, short-runcostswereevident.For example,if a preferredgroup hashad an educationaldeficit, the demandfor qualified personnelfrom that group can quickly outrun the supply. "Unproductiveemployeesmay be addedto the payroll to satisfy statisticalrequirementsor, as in the caseof representation in business,enforcementmay be avoidedthrough corruption."21 Employment preferencesfor dominantethnic groupsin someIndian statesled to movementsamongnonpreferredethnic groupsto secedein orderto establish new statesin which the nonfavoredminority could becomethe dominant majority. In Horowitz'sview,judgmentsaboutthe effectsof preferentialpoliciesin businessaredifficult to makebecauseshort-termcostsare"apparent"whereas long-termbenefitsare "difficult to estimate."22However,taking accountof RobertKlitgaard'sinsightson the market-failurecostsof ethnic discrimination in the labor market,theremay be short-termbenefitsjust as apparentas the short-termcosts.A narroweconomiccomparisonof costsandbenefitsof preferencesshouldoffset the short-termcostsof affirmative action measures

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by the short-termgainsderivedfrom lowering the efficiency costsof prejudicial hiring practices.The short-termmicro costsaregenerating(Klitgaard's unrecognized)short-termmicro gains.The presumptionthat the net macroefficiency effect of redistributionthroughpreferencesystemsis negativemay be wrong. Furthermore,a proper weighing of short- and long-term costs and benefits is a problemfor many areasof public economicpolicy. The persuasivenessoflong-termfuture economicbenefitsin day-by-daypolitical calculation is normally low, and can be even further reducedif the normal financial conceptof discountingfuture benefitsto a presentvalue is broughtto bear. Suchcalculhlscould be affectedsubstantially,however,wherethereis a credible risk that failure to addressstructural or prejudicial inequalitiescould trigger violent conflict. Horowitz's generalconclusionswere, inmy view, more negativethan his own evidencesuggested,especiallygiven the importancehe assignedto the Malaysiancase.In addition, he cites employmentoutsidethe home ethnic region, which could be promoteddeliberatelythrough selectedpreferential hiring, as an important disincentiveto Luo or Lozi secessionism,in Kenya and Zambia,respectively.23As in so many areasof public policy, the devil is in the details, and successlies in the implementation. The evidenceis not completeyet on preferentialpolicies and development.But it is clearenoughthat ethnicpreferencespushedtoo far produce short-termeconomicand political costs-costsin efficiency, costsin unplannedexpansionin education,costs in ethnic conflict. It may still be true, as it is assumedto be, that therewill ultimately be lessethnicconflict if ethnic groupsare proportionatelyrepresentedin all sectorsat all levels. Onereasonthat the truth of this propositionremainselusiveis that few, if any, societiesapproximatethis description.If it is true, however,that does not meanthat the end is worth any cost. In the developingcountries,the short- and medium-runis very important.That preferentialpolicies have not producedevenmore short-runcostsis testimonymore to the wisdom and political sensitivity of thosewho enforcesuchpoliciesthanit is to the 24 policies themselves. We might also hypothesizethat short-run costs may be minimized, and short-runconflict-risk most readily defused,if the initial effects of affirmative action are to narrow the economic andpower gaps betweenelites of different groups.The first peopleto take advantageof many of the preferencesin such programsare likely already to be membersof their group's elite or, if not, will becomeso, thanksto the benefitsthey acquire.Of course, preferencesare not promulgatedas elite-promotionschemes,nor with the

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intent to increasevertical inequality within the preferencegroup as awhole. Nevertheless,early inclusion of aggrievedelites may be highly effective for avoiding conflict in the short run, giving time for the preferencesto reach wider and deeperinto the eligible group. Finally, it is worth repeatingthe two major lessonsof the Malaysianexperience. First, rapid economic growth that is also lifting the boats of the nonpreferredgroups will moderatethe political costs of a preferenceprogram and make it easierfor a governmentto sustainand adjust. Second, governmentshould implement preferencesflexibly, allowing frequent exemptions.In a sluggisheconomy,or heightenedatmosphereof ethnic tension, or where the number of potentially frustratedjob seekersis large, preferencescan be counterproductive.Thus, betweengrowth and flexibility in enforcement,the employmentpreferenceshavecausedmuch lessresentment in Malaysia than in India.25 The private efficiency costs of enforced hiring of lessqualified workerscanbe offset by subsidizingon-the-jobtraining periods.Preferencesmay be difficult to undo. Conversely,after preferencesappearto have brought about a substantiallesseningof employment disparities,the political costof reducingthe preferencesmay be easedif there is a reactionamongsomein the favoredgroupagainstthecontinuationof schemes that imply its membershavea permanentskill inferiority. Wheredisadvantaged groups are geographicallyconcentrated,educationaldeficits can be narrowed by allocating sufficient resourcesto regionally equalizethe quality of education, without imposinga preferencesystemat the schoollevel, or focusing the costsof the systemon nonfavoredindividual studentsbarredentry. Whetherthrough policy dialoguein connectionwith sectoraland project analysis and finance, or through their general advisory assistanceon economic and developmentpolicies, donorsshouldbe alive to opportunitiesto consideradoptionof affirmative action programs,where such might reduce groupdisparities,or the dismantlingof preferencesystemsthat haveachieved their original objectives or that were initially installed as instrumentsfor exclusion.To be in a position to provide soundadvicein this sensitivearea, it would be helpful for donors to make a comprehensivereview of experience, updating the work of Sowell, Horowitz, and others. For donors too stronglyattachedto governmentminimalismto contemplatesupportof preferencepolicies, I would give the last word to Milton Esman.Noting that the advantagedeconomicposition of particulargroupshad establishedat independencea nonlevel playing field in many former colonies, Esmanasks, using the exampleof the Malays: When, under market processes,non-Malaysgain control of most of the banks,manufacturingenterprises,constructioncompanies,and commer-

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cial firms in the private sector,should Malay elites meekly acquiescein economicsubordination?Or shouldthey attemptto usethe powersof governmentto rectify their disadvantaged status by revisingtherulesof access andof administrativeintervention?26 Taxation Tax policy reform and tax administrationhave long beensubjectsof donor interest,either through policy dialogueintendedto adviseor persuadegovernmentsto undertakereforms,or throughtechnicalassistanceeitherto improvetax administrationor theeconomicefficiency of the tax regime.Because questionsof tax incidence(who paysand who benefits)havelong beenintegral to economists'study of public finance, theseissuesof welfare effects have also beenintegral in donor involvementin this area.This has beenso evenwhen,as hasoften beenthe case,the activities havebeencarriedout by academicand professionalconsultantsor contractorsin a technical rather than reform context. Bad tax policies and administrationare much more likely to exacerbate than to ameliorateeconomicconditionsrelatedto conflict. Besidestheir distorting impact on industrial efficiency and overall growth, tax policies can have differential regional and classdistributional effects that can reinforce political, religious, or other sourcesof disaffection.Examplescould be (1) commodity export levies that reduce farm-gate prices of crops cultivated largely by socioculturallydistinct groupsor in one ethnogeographicregion; (2) controlled purchasingmonopsoniesof export commodity boards,tantamount to export taxation falling on similar groups;(3) salestaxeson productsgenerallyknown for beingboughtonly by a particulargroup; (4) taxation designedto fall only on economicactivities or assetsthat are specific to a particular group; or (5) taxesthat distort the industrial/agricultureterms of trade,usually to the disadvantageof agricultural regions. Assessments of an existingtaxationregimein a deeplydivided society,or considerationof changesincluding imposition of new forms of taxation, shouldtake into account(in addition to the usual criteria of incidence,efficiency, etc.) the actual or expectedimpactupon disadvantagedor aggrieved ascriptivegroups.In such societiesit would be prudentto adopt a working assumptionthat taxesare preferablethat areat leastneutralin impactamong ascriptive groups, or (perhapsbetter) that fall relatively less or lighter on consumptionor economic activities that are peculiar to disadvantaged ethnoregionsor communities.Suchgroup incidencecriteria apply more appropriatelyto indirect than to direct taxes.Unequalapplicationof individual income taxesbasedsolely on ethnic group membershiphas little justifica-

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tion from either an equity or a political perspective.As notedbelow, corporate tax concessionsoffered as incentivesfor investmentin lagging ethnic regionsneedto be moderateand time-bound.They shouldavoid creatinga noncompetitiveregionalindustrial sectorthat subsequentlycould becomea sourceof contention,quite asidefrom the normal economicconsiderations that weigh againstsuchstructuraldistortions. The effects of individual taxesor of the tax regime as a whole on intergroup relationsdependsboth on the real incidenceand (more importantly) on group perceptionsof their absolute andrelative after-tax positions. To have its desiredfiscal and political effects, a tax regime designed(among otherthings) to advanceequity amonggroupsmust be so understoodby the groupsin question.As economistsoften havedifficulty determiningexisting tax incidence,let aloneaccuratelyprojectingthe incidenceof a new tax, it is especiallyimportantin a divided society that perceptionsbe taken into account and that the processof establishingor altering taxationbe transparent and well explained.Experienceindicatesthat the greatestopportunitiesfor substantialtax reform have comein the wake of major changesin political power.27 In someof theseshifts, especiallyin postconflictsituationswhere completely new alignmentsand institutional arrangementsmay be put in place,the donorsmay haveunusualwindows of opportunityto help designa new tax regime, and other aspectsof fiscal policy, that can contribute to preventinga resumptionof hostilities. The generaladvisability of any tax reform that will result in significant increasesin governmentrevenuecannotbe determinedwithout taking account of the expenditurepurposesthe revenueflow will support.Thesepurposesdependheavily on the nature of the regime in power. If a regime is predatory,simply kleptocratic and devotedto self-perpetuation,assistance to increasetax efficiency (say, technical assistanceto strengthencustoms administration)would merely increasethe flow of resourcesextractedfrom the economy,frequently to finance transfersto private externalaccounts.In a deeply divided society where a regime draws its supportfrom one region or ethnic group, any revenueexpansionwould enhancethe government's ability to feed its own patron-clientnetworks,therebyexacerbatingthe enmity of the excludedgroups.Whetherin fact a regime prefers to extract transfersor to benefit from overall economicgrowth can make an essential difference in the conflict risk. The preferencemay dependon the relative sizeof the dominantgroup.Ruling elitesfrom smallerdominantgroupsmay be more likely to prefer systemsof resourceexaction comparedwith regimesthat draw supportfrom (andcan expectfuture revenuesfrom) a larger fraction of the populationand a broader,growing taxableeconomicbase. The suggestionshereon likely taxationstrategiesof ascriptive-group-based

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regimesare comparableto conclusionsfor economicgrowth that Robert H. Bates,Mancur Olson, and othershave drawn from the policy performanceof (mostlyAfrican) regimesthat havebeenled by elites who frequently"sacrifice the generalinterestto extractrents and retain power." In the exaction/feeding interplaybetweenregimesandtaxedor supportedgroups,this literaturedefines the groupsby their classandeconomic,ratherthan ascriptive,character.28

Internal ResourceAllocation RegionalPreferences Donors may affect the internal regional allocation of resources-and thus the relative costs and benefitsexperiencedby different regionally concentrated groups-through(a) their influence on governmentexpenditurepatterns, (b) their influence on governmenteconomicand social policies, and (c) the distributive effectsof the donors'own aid resourcesand projects. It is often the casethat the relatively poor economiccircumstancesof a restivedisadvantagedgroup have resultedlargely from a paucity of natural resourcesin the region theyoccupy.Poorresourceendowmentin a developing countrycommonlymeanssomecombinationof agriculturaldeficits, such as soil that is salineor haslow natural fertility or poor water-retainingcharacteristics;limited possibilities for irrigation; irregular or insufficient rainfall; excessiveflooding. With or without such deficits, an economically of remotenessfrom urbanmarkets backwardregion may havedisadvantages or poor accessto ports for shippingpotentialexport commodities.Between remotenessand economicbackwardness,and the political weaknessthat commonlyresults,such regionshaveoften sufferedalso from neglectin the provision of educationand healthservicesand in the amountof agricultural researchdevotedto raising productivity. In sum, such regions tend to be disadvantagedin natural resources,physical infrastructureinvestment,human capital, and technologicalattention. As in some of our casestudies, donorsface the problemthat investing scarceaid resourcesto the development of suchregionsreducesthe resourcesavailablefor investmentin other areaswhere higher returns will make a greatercontribution to a country's overall economicgrowth. There are no simple answersto the backward-regionproblem. An extendedtreatmentherewould take us far beyondour subject,but a few observations drawn in part from the case studies point to conflict-relevant perspectivesthat donorsshouldtakeinto account.In the interestof strengthening the viability of the local economyand the traditional attachmentsto a region that underliea disadvantaged population'sculture and senseof iden-

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tity, investmentsin agricultureshouldnot be rejectedautomaticallybecause they fall below the expectedprofitability criteria appliedto projectsin areas with more favorableagronomicendowments.Further,evenpoorly endowed regionsoften havepocketswith bettersoil or with minor irrigation potential. A recentreview by the InternationalFood Policy ResearchInstitute (IFPRI) pointed out that agricultural investmentin the long favored areashas been facing diminishing returns. Becausesuch investmenthas lagged,the modestresearchadvancesthat have accumulated open up opportunitiesthat may now have higher returns on the margin than do further investmentsin the favoredareas.29 Investment in regional survey and planning may uncoverlocal potential that has been previously overlooked and unsuspected.Contract farming and niche production of high-valueproducefor export haveenabledsomedisadvantaged areasto join in mainstreamdevelopment.Reducingisolation and lowering transportcoststhrough highway and farm-to-marketroad projectsis essential for realizing whateverprospectsa regional agricultural economymay have for sustainedincome growth. Investmentin marketing infrastructure may also be neededto help develop active and competitive produceand input marketswhere noneexistedbefore. Although someconcessions,such as purchasingand/orprice guarantees, may also be neededto enhancea region's (or a regional project's) initial of momentum,they shouldbe held to modestlevels to avoid encouragement production that has weak long-term competitive prospects.To avoid saddling a national economywith permanentlyuncompetitiveregional industries, it is generallybest to eschewthe substantialtax and other incentives that would be necessaryto lure manufacturinginto areaswhere such location would not be competitiveotherwise. Investmentin humancapital is likely to offer the highestlong-run returns, both private and social. Educationand healthservicesshouldbe broughtup to nationalstandards.Regionaluniversity(ies)could be createdto increasetertiary educationopportunity andto undertakeresearchon local socioeconomicproblemslesslikely to beexploredby facultiesat national,urbaninstitutions.Social integrationcanbe enhancedthroughthe interregionalmigrationof eliteswhose higher educationaffords them national competitivenessin the marketsfor advancedskills. Efficient interregionallabormarketsandassociated low-costtransportation are important so as to facilitate seasonalmigration; backward agriculturalregionstypically haveannualalternatingseasonsbetweenmonths of heavy labor demandand months of labor surplUS. Investmentin regional tourism and institutions of cultural preservationand promotion can be especially effective for reducingisolation and preservingregionalidentity. of somebackwardregionsmay The location and resourcedisadvantages

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be so great that regional developmentprogramsalone are unable to bring income levels close to the levels of the more advancedareas.Per capita incomeconvergencemay be possibleonly through permanentmigration to moredynamicareas,creatingin effect an internal diasporathat supplements the incomesof those whoremainbehind(often the elderly,the children,and the moretraditionalminded)througha permanentflow of remittances.Taken altogether,however,backward-regiondevelopmentand cultural enhancement can go far toward overcominggrievancesover neglect,relative deprivation, and cultural condescension. The IFPRI's argumentsfor anticipating satisfactoryreturns to investmentin backwardregions, and for reversing past neglect, are especiallycogent where such possibilities are located in areasthat are ethnically distinct and at risk for seekingradical redress. Two otherlocationalperspectivescanbe drawnfrom Esman'ssuggestion (notedearlier) that donorsin ethnically divided societiesallocateresources to projectsthat createinterethniccommoninterests,and to projectsthat create intercommunalinterdependence (i.e., divisions of labor that reward cooperativerather than competitivebehavior).Whereethnic groupsdwell in contiguousbut separatehomogeneousregions,the border areasmay offer possibilities,not otherwisefeasiblefor the populationslocatedfarther apart, for projectsthat involve groupsfrom either side. An active searchfor such possibilitiesmay turn up interdependence options that might otherwisebe overlooked.Options for common-interestprojects should be more readily areas.Within someheterogeneous areas, apparentin ethnicallyheterogeneous as in the Gal Oya project in Sri Lanka, the different ethnic groups may be locally concentratedin nearby,separatehomogeneouscommunitiesbut can be drawn into the unifying framework of a commonproject. Esmancites a carpet-producing project in Tadjikistandesignedto createcommoninterdependencebetweentwo hostile ethnic communities;one was provided the machineryfor making the carpets,the otherfor producingthe woo1.30 Needlessto say,projectsthat introduceentirely new economicstructuresembracing hostile communitiesmay end up creating either new cooperative relationshipsor new basesfor conflict (especially if they prove unprofitable),dependingon how astutelythe projectshavebeendesignedandhandled. Alternatively, heterogeneous groupsmay sharethe samevillages or neighborhoods,where opportunitiesfor involvementin common-interestactivities and enterprisesmay be createdmore easily and naturally.

ChoosingAmongAlternativeProjects Knowledge about differentials in group income should be used to inform policy and project planning. For many years, developmentagencieshave

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taken incomedisparitiesinto accountin the appraisalof proposeddevelopment projects.In calculatingthe potential benefitsof a new project, it was acceptableto give greaterweight to benefitsexpectedto accrueto the poor comparedwith the valuation of benefits to accrueto membersof higherincomeclasses.In practice,weightingmight be merelyimplicit in a decision to scratch around for any investmentsthat might yield somethingfor the relatively poor. Beforeincomeweightingwasformally sanctionedin projectanalysismethodology, a projectcould be madeto meeta minimum expectedrateof return by fudging the assumptionsandexpectedoutputfigures.Although elaborate project-appraisalmethodologiesthat, inter alia, use weights and shadowpricesto value benefitsto the poor appearto havedroppedout of fashion, a similar conceptcould apply to the valuationof benefitsexpectedto accrueto a relatively depressedor backwardgroup, comparedwith benefitsexpected to accrueto a dominant group more advancedeconomicallyand socially. Benefitsexpectedfor membersof the sameincomeclassacrossgroupscould be given a higher valuationif they accrueto membersof an ascriptivegroup that is generallybackward,especiallyif such agroup suffersfrom political and prestigediscriminationand bearsa generalsenseof exclusionor subordination. Such weighting would tend to skew the allocation of projectsand their contentto help reducegroup asymmetries.One can imagine different magnitudesof weighting depending onthe depthofthe society'Ssocial divisionsandantagonisms.The largerthe specific asymmetriesbeing addressed, the greaterthe weight that would be applied to the benefitsto accrueto a disadvantagedor excludedgroup. Greaterweight might be applied if the asymmetrieshad already enteredthe consciousness, rhetoric, or mobilization agendaof the disadvantagedgroup. The greatestweight could be employed if the grievancesover these asymmetrieswere reinforced by dissatisfactionsover wider issuesof subordination.Establishmentof such a practicein a given situation would have greaterimpact if the bias were acceptedby the hostcountryasa decisiontool for its own policiesandprojects.

Formal Education Programsto assist thedevelopmentor reform of educationsystemstypically run the gamutof schoolingrequirements:systemplanning;schoolconstruction; educationalequipment;teacherand managementtraining; curriculum, books,and teachingmaterials.The aid effort may be underpinnedby a sector studythat examinesandprojectsthe country'seducationalresourceneeds, the weaknesses that needto be overcome,policy issues(e.g., schoolfinancing and fees), and the part eachdonor can play. Implicit in the mereexpan-

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sion of the primary and secondarylevels to nationwidecoverage(essential for modern economic development)is the long-term effect that universal educationcan have on national unity through exposureof the entire next generationto a common learning and socializing experience.Many newly independentdevelopingcountries have made the inculcation of common national symbols,values,and historiesan explicit objective of their education systems.The donorsmay bearsomeresponsibilityfor the softwareand socializationprocesses,especiallyif project assistanceincludestextbooks. Donors should satisfy themselvesthat the physical expansionplans do not excludeor accordlower priority to minority areas,or jurisdictionswhere opposition parties have dominant support or have won local government elections.Ethnic group exclusionor discriminationin educationis likely to have much more perniciouseffects on social stability than neglect or discrimination appliedto female schooling,an educationproblemdonorshave pursuedvigorously in recentyears.Donors working on educationdevelopment should not be passivein the face of the divisive effects of segregated schooling,evenof the "separatebut equal" variety. The healthof the educationsystem,and the impact the systemhas onthe society as a whole, may dependon finding the right balaJ:.lcein teaching materials among "nation-building" commonality, multicultural knowledge and respect,the teachingof particularhistoriesand traditions in schoolsin predominantlylocal or distinct cultures,andon policiesrespectinglanguages of instruction and the recruitmentand placementof teachersof different ethnicities.Thesequestionsmay take different forms and call for different responsesin schoolsystemsin ethnicallyheterogeneous areascomparedwith areaswhere the studentbody is ethnically homogeneous.Also, donors involved in curriculum developmentor teachertraining should not overlook possibilities for inculcating studentswith values of respectand tolerance through programsin the performing arts or through after-schoolnonformal education. Although overtly hostile discriminatorypolicies, which include language amongother forms of rights violation, raiseissuesfor the basicrelationship of donors to recipient governments,languagealone may serveas a tool of more subtle discrimination that might be relevant to donor activities on a projectlevel. Forexample,universitydevelopmentmay beassistedby projects focusing on individual faculties or on the upgradingof physical plant; if the universityis discriminatingin its admissionprocedures(asin Pakistanagainst certainlanguagegroups31),the donor might not be awareif admissionpractices fall outside the boundary of the project and its normal prefinancing appraisalstudies. Donors mayor may not have useful things to suggestor do regarding

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such issues.Donor involvement may not be welcomedin some sensitive areas,or may be acceptableonly from an internationalagencylike the United NationsEducational,Scientific, and Cultural Organization(UNESCO).The minimum requirementin education,as in otheraid subjects,is to developan awarenessof divisive or ameliorativepotentialities,and to avoid exacerbation, even if such conflictive effects would be unintendedconsequences of aid activities assumedto be "technically neutral."More proactivedonor involvementin the distributiveaspectsof a country'seducationsystemmay be appropriatewhere aid is being given in the form of educationbudgetsupport. The apparentrecentincreasein arrangements calling for releaseof such support in tranches(partial disbursements),tied to performanceof a government'seducationpolicy commitments,could providean effectivebasis for expressingdonors'distributive interest.32 Moreover, the relative easewith which teachersin the Bosnian NGO project (describedearlier) were able to induce rapid interethnicreconciliation amongBosnianyouth servesas an exampleof the potentialitiesfor socializing the young to valuesof toleranceand civility. The idea that school systemscan so shapethe worldview and behavior of youth (with lasting effect overtheir adult lives,it is hoped)hasled to someaid-fundedintercommunal pilot projects and to general calls for educationsystemsto play a greaterrole in conflict preventionand postconflictreconciliation.However, the pastcenturysaw many examplesof the obverse:formal secularand religious educationsystemsthat taughttargetedhostility to domesticminorities or external"enemies."In the recentflood of analysesof the roots of Middle East-basedterrorism, various investigatorshave pointed out that virulent anti-Western,anti-Israeli,and/oranti-Christianinculcation hasbecomeembeddedin someschoolcurricula in the region, probablyenhancingthe ability of extremiststo recruit youth for violent organizations.Wherevera curriculum has such inculcatingcontent,donorsshouldattemptto effect its removal,or, failing that, should withdraw from the educationsector. In a positive context, schoolingshould be able to educateand socialize youth to moresof nonviolentconflict resolution.Despiteall good intentions on the part of local project staff and on part of donors providing financial support, however, pilot educationprojects that demonstratereconciliation feasibility amongthe few studentsinvolved, or amongtheir few parents,are unlikely to havewide impactif the governmentis not committedto replication throughoutthe system.A successfulexampleof replicationof a primary educationmodel with generalgrassrootsreconciliationimpact appearsto be evolving in EI Salvador.Througha locally managedsystemthat tappedthe shareddesirefor bettereducationfor eachcommunity'syoung children, the widely known EDUCO project (Educacion con Participacion de la

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Communidad)haswon supportfrom all the country'spolitical parties.What beganas a rural pilot projecthad grown (with World Bank and Inter-American DevelopmentBank support)to cover 20 percentof the nation'senrollment through grade six in 1996. The good educationalresults aside, the programstandsas a striking demonstrationof formal education'sreconciliation potentialitiesin a society(postconflictin this case)wherethe desirefor child educationis strongon all sidesand wherethe political environmentis reconciliation-enhancing. [T]he EDUCO experiencehas played a significant role in bringing elementsof civil societyandthe political spectrumin El Salvadortogetherin their assessment of an initiative of vital importancefor the future development of the country. This finding of "commonground" constitutesa contribution to the sustainabilityof the continuingpeaceprocess.This is no meanachievement. 33 Language Policy We haveseenhow divisive languagepolicy canbe and how languagequestions can arise in various contexts.I have not come acrossany occasions where a donor agencywas involved in the internal politics surroundingesto the exclusionof other tablishmentof an official indigeneous language(s) languagesspokenin a country.Among ex-colonialdonors,Francehasprobably beenthe mostforceful in its pressingof Francophonecountriesto maintain French as the main secondlanguage.Although French policy on this scorehas causedproblemsamongthe donorsin somecases(in the caseof Cambodia,resentmentamong local officials who preferredto shift toward English,but could not risk the loss of the Frenchaid program),the important point is the advantagethat knowledgeof any internationallanguagebrings to the speakersand whetherthat knowledgeis confinedto dominantgroups. Even without any awarenessof their languageimplications,donorsmay have someimpact through various kinds of projects.For example,in what languageare the road signs written along routesbuilt or reconstructedwith donor funds?Are public relations materialson donor programs,including announcements of forthcoming procurementand of employmentand training opportunities,issuedin the translationsneededto ensurewidest access? Does anyoneethnic group havean inherentadvantagein accessto training opportunitiestied to a specific foreign language? Most importantly, in a society where languagedifferencesare salient markersof deepascriptivedivisions, donorsshouldnot supportor passively toleratethe establishmentor implementationof a languagepolicy introduced

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for hegemonicendsor that is opposedby significantnumbersof speakersof excludedor disfavoredlanguages.At a minimum, donorsin such situations shouldinsist (or maketheir own arrangements) that governmentdocuments concerningsubjectsor processesin which donortechnical,advisory,or other assistanceis involved be issuedin major languagesother than the official language.Even apparentlybenign languagediscriminationcan be a major obstacleto economicmobility.34 If languagediscriminationis accompanied by otherprejudicial programsto imposecultural assimilation(as in Bulgaria in 1984 when the governmenttried to prohibit its Turkish minority from usingthe Turkish language,wearingtraditional dress,or performingcircumcision, among other things), such violation of humanrights should trigger strong donor response. Agriculture Strugglesover agriculturalresourcesreachbackinto ancienthistory in many parts of the world. In modern times these struggles,essentiallyover land ownershipor userights and over accessto irrigation water, haveoften been central issuesamongthe root causesof group conflict. (Although local and scatteredconflicts over encroachmentson the traditional lands of "indigenous"peopleshavebroken out in many countries-attractingseverecriticism whendevelopmentagencyprojectshavebeeninvolved,andthe attention of internationalhuman rights and environmentalgroups-thesehostilities often involve relatively small populationsthat are politically marginal and do not scale up to generalizedwarfare.) Land policies can also be instrumentsfor reducing ruraleconomicinequalitiesanddemonstratinginclusion. In the caseof Sri Lanka, we haveseenboth how exclusionarypolicies governing accessto new land settlementexacerbatedinterethnicrelations,contributing to Tamil loss of trust in the state,and how at least local trust and amicablecommunalrelationscould be restoredthroughjointly administered water-sharingsystems.In Malaysia,government-financed settlementschemes gavesmall or landlessMalay farmersland holdings(andcredit andtechnical assistance)that substantiallyimprovedtheir economicprospects. Donor projectsmay affect the communaloutcomesof suchprogramsand policies. Specific issueswith collective distribution implications that might involve donors,or merit their attention,include 1. illegal intercommunalland seizure; 2. land seizuresanctionedby governmentlegalization; 3. accessto new land openedup by irrigation, and the associatedrules for selectionof beneficiaries;

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4. irrigation systemdesign(location of canalsand water distribution, betweenalternativesettledareas); 5. selectionof beneficiariesfor accessto unoccupiedarableland; 6. resettlementor internal migration programs(or voluntary, private migrations) that bring previously separategroups intoclose proximity, especiallyif the settlementareais alreadypopulatedby people of a different ascriptivegroup; 7. developmentof the legal frameworksfor land marketsand for establishing clear property rights, especially in countriesmaking a transitionfrom socialistownershipsystems; 8. rural credit access; 9. communaldimensionsof beneficiaryparticipationin project planning and project governance; 10. policy reforms thatfree up domesticmarketsfor agricultural commoditiesthat might havedifferential incomeeffectson different regional or ethnic groups; 11. liberalizing imports offoodstuffsgrown by previously protected domesticproducers; 12. location of investmentin rural roads; 13. location of researchstationsand selectionof cropsfor research attention; 14. regional allocation and effectivenessof agricultureextension systems;and 15. location of agricultural universities. All of thesemay impinge upon assistanceprograms,or be the subject of technicalor economicaid. Dependingon local circumstances,they may be frought with implicationsfor domesticstability. In land-settlementprogramsthe economicassetsbeing provided should be sufficientfor sustainedincomegrowth.Otherwisethe disadvantaged group being helped to narrow the intergroup income gap may be disadvantaged againif its holdingsare too limited in size or productivepotentialto sustain more than a short-termincreasein output. An insufficient short-termmeasure would first facilitate a rise in productivity, then act as a ceiling on further incomegrowth, as was the casein early rubberand oil palm settlement schemesfor Malay small landholders. Civil Service Reform and Modernization This is an old subjectin developmentassistance,known earlier under the rubric of "public administration."A common objective of civil servicere-

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form is to move to a systemof recruitmentandadvancementbasedon merit, on a Weberianconceptof technocraticbureaucracy,matching peoplewith job descriptions,giving them rank and pay dependingon their entry credentials andtheir subsequent performanceandin-servicetraining. Many regimes in developingcountrieshaveusedcivil serviceappointmentto build patronclient networksor to entrenchthe ethnic group of the governingelite. Many also inheritedcolonial bureaucracies that hadbeenstaffedundera combination of merit and ethnic affiliation. Civil service reform programs,typically necessitatedby administrative inefficiency and budgetstringency,often call for retrenchmentand the introduction of personnelsystemsbasedon competitiverecruitmentand meritbasedpromotion.Althoughsomecivil servantsmaybe "shadow"employees-on the books and drawing pay but never showing up at the office-thereby easierto dismiss,reductionsin actual employeesmay result in, or offer an opportunityfor, changingthe ethnic compositionof the bureaucracy.If ethnic compositionhasbeenseriouslydisproportionate,or reflectsan ethnic or ethnoregionaldominanceof governmentthat could be an interethnicissue, any donor providing technicalassistance(or, in someinstances,finance to help thosedismissedmakea smoothtransitionto privateemployment)needs to be cognizantof the possibility of suchproblems.If ethnic compositionis found to be an issue,the donor shoulddeterminewhetherthe assistancebeing providedis having somerelevantimpact. If the donoradoptsa postureof technicalneutrality(i.e., formally oblivious), thereductionsthe donoris pressing and possibly financing might fall disproportionatelyon the already underrepresented ethnicgroup(s).If reform projectscancontributeto an easing of suchproblems,so muchthe better.At a minimum. it is importantto be awareof any impact, and to avoid contributingto a worseningof the situation or overlookingan opportunityfor amelioration. Some standardguidelinesfor effective public administrationare especially importantin deeplydivided societies.For example.Arnold C. Harberger adviseddevelopingcountriesto "avoid the all too commontrap of endowing regulators,administrators,and other governmentofficials with wide discretionary powers. Such powers are dangerouseven in economieswell supplied with trainedtalent,and with an informed and vigilant public. They can be utterly noxious in countries with fragile bureaucracyof relatively low administrativecompetenceand a public that does notand probably cannot subjectpublic decisionsto careful scrutiny.,,35The recommendationis particularly apt where the service is staffed largely by people drawn from a dominant ethnic group. Harberger'sobservationsabout governmentrulemaking are also soundguidelinesfor limiting the scopeof arbitrary and biasedadministration."Perhapsthe first thing that occursto outsideobservers

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when they contemplateall the tasks confronting so small a group [i.e., the tiny cadresof educatedcivil service techniciansand professionals]is the urgencyof keepingthe processesof government-thelaws, the regulations, andthe proceduresand indeedthe very scopeofthe public sector-assimple as possible.Taxes should be simple and easy to collect. Budget processes should be straightforwardand clear. Legislation should be drawn so that exceptionsand specialcasesare very rare."36

Conclusion Most of the actions I am suggestingwould aim to protect or benefit economically disadvantagedor repressedethnic groups.In effect, the development agencieswould be undertakingprogramsand promoting policies that, if effective, would contribute to empowermentof the groups so assisted. Even if an assessment concludedthat sucha bias was not required,or that circumstanceslimited the scopethe agenciesmight haveto shapetheir programsin such a manner,the agenciesshould hold to a Hippocratic rule of doing no between-groupharm. Theyshouldnot reinforceany conditionsthat haveled to existingpolitical or socioeconomicinequalities.They shouldensure that information about their programs-projectlocations, accessprocedures, training opportunities,procurementand contractingopportunities-bewidely available,and that programimplementationdoesnot reinforceinequalities. Not all of the measureswe have suggestedare relevantin every divided country,or in anyonecountry at one period of time. Justas a conflict-avoiding agreementor programwill usually involve a whole setof policies,incentives, and trade-offs,so internationalassistancecould include a selectionof componentsto supportsucha program,or to help it materializeif a conflictprone society has not yet gotten to the point of generalbargaining.One of the things an assessment shoulddo is considerwhetherthe country would be betterservedby an attemptto develop an ambitiouspackageto help bring the opposing groups to a general bargain, or whether it would be better, perhapsmore feasible, to develop incrementalaccommodationson issues easierto sell. Further,a successfulbroad"bargain,"as in the Malaysiancase, will require a mix of political and socioeconomic,perhapseven symbolic, components.The developmentagenciesare not likely to be lead advisorsto local partiesreadyto designcomprehensiveconstitutionalarrangements. But they-mostlikely the World Bank----canprovide negotiatorswith objective informationandanalysisof therelevant economic dimensions,proposepolicy and program options, commenton the economicimplications of political structuringproposalson the table, and offer financial supportif the parties follow the agreementin good faith.

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If an advancefor one group under some particular programis feasible only at somecost to anothergroup, an acceptablepackageshould include positive incentivesfor the latter. As notedabove,the inclusion of suchcompensationfor populationdisplacements(if not simply avoiding projectswith displacementeffects)hasbecomeestablishedpolicy for the World Bank.As complex as the problemsof appropriateand acceptablecompensationfor (the typically small) groupsinvolved haveturned out to be in practice,they areconceptuallyand politically easierto managethan the balancingof costs and benefitsamonglarge and sharply definedpopulationsegments. An interventionof primary importancefor group relationsin one country may be of slight importancein another.This may seemtoo elementaryto merit saying,but it servesas a reminderthat generalconflict theorizingcannot substitutefor individual countryassessment. Cross-countryanalysismay dismissa factor that is statistically insignificant comparedwith many other variablesin a large numberof countries,but that is importantin a particular country one is concernedabout. Furthermore,in the samecountry, a set of policies that effectively promotesaccommodationand political stability for even a long period of time (as was the casein Lebanonwhere the highestlevel positionsin the political structurewere reservedfor specifiedallocation to leaders of the different religious communities)may become counterproductivewhen the underlying conditions change(as in Lebanon when the changingcommunaldemographicsunderminedthe rationale for the reservedallocations)or whenthe countryis destabilizedby outsideforces. It is important to retain flexibility and to keep a door open to recurrentassessmentsand dialoguewith objectiveoutsideinstitutions.

Postscript:Demobilization Demobilizationis an importantcomponentof conflict settlements.The primary expectedbenefit isprevention.Cutting the size of the opposingarmed forces, often with the intent to integratethe residual military into a single national force, can serveas a confidence-buildingmeasurewhile reducing the ability of either side to resumecombat.In addition, the consequentreduction in military expenditureis commonlyseenas a "peacedividend" that can increasethe resourcesavailablefor reconstruction.In a successfuldemobilization,the new integratednationalmilitary structureshouldbe placed undercivilian control, removedfrom politics, professionalized,andretrained. Peacesettlementsmay also call for developmentof a professional,nonpolitical police force to completethe separationof the military from domestic functions. Internationalinvolvementin conflict resolutiontypically includesimpor-

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tant roles in the negotiationand implementationof demobilization.Where the developmentagencieshave beeninvolved, their role hasincludedplanning, retraining,andfinancing of the return of military personnelto civilian life. In a departurefrom its traditional areasof competence,the World Bank has done somepioneeringwork on the designof demobilizationand the planning for reabsorptionof soldiersinto the civilian economy.37The political aspectsof demobilization-integrationof the armedforces,redefinition of military functions and commandstructure,identification of units to be dissolved,and selection of individuals to be musteredout-arethe responsibilityof the politicall diplomatic negotiatorsandof the international(mainly U.N.) political andmilitary authoritiesinvolved in helping to implementpeaceaccords. The demobilizationrecord is mixed, at best.Whereassomeefforts (e.g., in EI Salvadorand Mozambique)havebeenqualified successes, others(e.g., in Angola and Cambodia)were deeplyflawed or outright failures. The military provisionsof the Bosniaaccordshavenot yet beenimplemented.Troops were trained in civilian occupationsbefore being demobilizedin Haiti, but the processhad no provision for securingthem employment;as a result, many kept their weaponsand turned to banditry when they found that the depressedeconomyoffered few jobs. Postconflictcrime was also a serious problemin EI SalvadorandMozambique.In many casesthe creationof new efficient and uncorruptpolice forces hasfallen well short of expectations.A recentreview of postconflictsecurityprogramsfound a troublesome"demobilization dilemma": In a postconflictenvironment,the ratesof violent crime, especiallyassault with automaticweapons,areapt to be soaring.Governmentsecurityforces are typically demobilizedor restrictedto cantonments,creatinga void in public orderafteryearsof harshandrepressiverule. As public alarmmounts, theretentionof elite units andleadershipcadrewho havehadthe benefitof extensivetraining and yearsof experiencebecomesvery appealing.The dilemma arisesbecausethesesameindividuals and elite units are often guilty of gravehumanrights abusesand rampantcorruption.38 Even wherea successfuldemobilizationprogramhastakenplacewithout an upsurgein criminal violence, a further dilemma may presentitself. If the officer corps has been dominatedby one ethnic group in a deeply divided society (a common destabilizingelementin Africa, examinedat length by Horowitz),39a demobilizationprogramcould fall selectivelyon officers and ranksof otherethnicities,leaving the sameethnic group with a monopolyof military power, even though reducedin size. Although developmentagencies helping to financeand implementportionsof a demobilizationprogram are not likely to be involved in the designof the military aspectsof a stand-

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down, they should have responsibilityfor its economicaspectsand should try to ensurethat adequateaccountis taken of its potential sociopolitical effects. Demobilizedtroops (and their families) will compriseonly a small fraction of the population needingpostconflict resettlement,reabsorption, and employment.However, becausethe demobilizedare the most readily remilitarizedelementof the society,their normalizationprograms(civilian occupationtraining,job search,small enterprisecredits,mustering-outgrants, etc.) merit high priority for internationalagenciesinvolved. Notes 1. PeterMurrell, "Symposiumon EconomicTransitionin the SovietUnion and EasternEurope,"in Journal of EconomicPerspectives(Fall 1991): 3-4. 2. See,for example,JoanM. Nelson et aI., Fragile Coalitions: The Politics of EconomicAdjustment.Washington,DC: OverseasDevelopmentCouncil, 1989. 3. StanleyFischerandAlan Gelb, "The Processof SocialistEconomicTransformation," in Journal of EconomicPerspectives3, no. 4 (Fall 1991): 104. 4. Lyn Squire, "Introduction: Poverty and Adjustmentin the 1980s," in World BankEconomicReview5, no. 2 (May 1991): 183. 5. JosephStiglitz, "What I Learnedat the World Economic Crisis,"The New Republic,April 17, 2000. 6. NetherlandsInstitute of InternationalRelations1999,p. iv. 7. Ibid., p. vi. 8. World Bank, From Plan to Market: World DevelopmentReport1996. Washington, DC: Author, 1996,p. 44. 9. Ibid., p. 53. 10. SeeJosephStiglitz, "What I Saw at the Devaluation:Why the IMF can't be trustedto run the world economy,"New Republic,April 17, 2000, pp. 5~0. 11. Sulimanand Ghebreysus,1998,pp. 6-7. 12. Cohen,1995,pp. 38-43. 13. Sunita Kikeri, John Nellis, and Mary Shirley, "Privatization: Lessonsfrom Market Economies,"in World Bank ResearchObserver9, no. 2 (July 1994): 241272. 14. Carl JayarajahandWilliam Bronson,StructuralandSectoralAdjustment:World BankExperience,1980-92.Washington,DC: The World Bank, 1995,p. 198. 15. Klitgaard, 1991,p. 209. 16. Ibid., p. 209. Italics in original. 17. Ke-youngChuandRichardHemming,Public ExpenditureHandbook:A Guide to Public ExpenditurePolicy in DevelopingCountries.Washington,DC: IMF, 1991, p.23. 18. Martin O. Heisler, "HyphenatingBelgium: ChangingState and Regime to Copewith CulturalDivision," in JosephV. Montville, ed., Conflict andPeacemaking in Multiethnic Societies.Lexington, MA: Lexington Books, 1991,p. 179. 19. Horowitz, n.d., p. 77. 20. Ibid., p. 77. The citation is from c.R. de Silva, "Weightagein University Admissions:StandardizationandDistrict Quotasin Sri Lanka,"in Modern CeylonStudies 5, no. 2 (July 1974): 166. 21. Horowitz, n.d., p. 84.

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22. Ibid., p. 79. 23. "Why is it that the Luo in Kenya,whosehomeis in the westandwho resentthe dominationof the Kikuyu, havenever 'seriouslycontemplateda Biafra-type(secession),?Clearly, it is becausethey hold influential positionsin major Kenyan towns outsidetheir region,especiallyNairobi and Mombasa.Like the Lozi in Zambia,but unlike the lbo, ethnic conflict hasnot forced them to return home. Secessionis less attractive if it is likely to mean a forfeiture of abundantopportunitiesoutside the homeregion." Horowitz, n.d., p. 31. 24. Horowitz, n.d., p. 93. 25. Horowitz, 1985,p. 676. 26. Esman,1994,p. 232. 27. Reviewing the casehistoriesfor a conferencevolume on tax reform, Robert Batesobservedthat "the casessuggestthat reforms clearly were facilitated by the comprehensiverestructuringof power broughton by military occupation(Japanin the 1940s);coups(Liberia, Brazil, Indonesia,Chile, and Venezuela,amongothers); and massiveelectoral victories (Sri Lanka, Jamaica,and Peru). Decisive shifts in powerhelp to definewhich interestsarein and which out. By structuringpowerrelations, such large-scalepolitical changesconstrainthe rangeof blocking coalitions. And they thereforemakepossiblestablesolutionsto a political gamewhich contains significant possibilitiesfor redistribution." See"A Political ScientistLooks at Tax Reform," in Malcom Gillis, ed., Tax Reformin DevelopingCountries.Durham,NC: Duke University Press,1989,p. 486. 28. For a recentexample,seeBennoJ. Ndulu and StephenA. O'Connell,"GovernanceandGrowthin Sub-Saharan Africa," in Journal ofEconomicPerspectives(Summer 1999):41--66. 29. John Penderand PeterHall, eds., Promoting Developmentin Less-Favored Areas. Washington,DC: InternationalFood Policy ResearchInstitute, 2020 Focus brief, November2000. 30. Esmanand Herring, 2001,p. 247. 31. Klitgaard, 1993b,p. 8. 32. I am indebtedto John Eriksson for bringing this point to my attentionin a personalcommunication,July 2001. 33. World Bank, 1998,Vol. III, pp. 37-38. 34. "If Spanishis the official languagebut Quechuais not, onegroupis obviously disadvantagedin enteringpublic life. Peru hasmadeQuechuaan official language, but Spanishis still exclusivelyusedin governmentdocumentsandbusiness."Klitgaard, 1991,p. 217. 35. Arnold C. Harberger,"Policymakingand EconomicPolicy in Small Developing Countries,"in RudigerDornbuschand F. Leslie C.H. Helmers,eds., The Open Economy:Toolsforpolicymakersin developingcountries.Washington,DC: TheWorld Bank, 1988,p.251. 36. Ibid., pp. 250-251. 37. See,for example,Nat J. Colletta,MarkusKostner,andIngo Wiederhofer,Warto-PeaceTransition in Sub-SaharanAfrica: Lessonsfrom the Hom, the Heart, and the Cape.Washington,DC: World Bank, n.d. 38. Oakley et aI., 1998,pp. 521-522. 39. Horowitz, 1985,severalchapters.

7. Persuasion, Leverage, and Sanctions

The Role of Ideas: Against Utopianism, Triumphalism, and Ignorance

Utopianismhas been at the heart of much misery and conflict throughout humanhistory. An ideais utopianif it purportsto point the way to perfection in the social or political order. Movementsspoutingutopianideals have often attackedor swept away an old and allegedly flawed social order-one basedon purportedlyoutmodedand unjustreligious or social conventionsin the nameof a perfectedsociety that the righteoussurvivors would build over the ruins of the past.The utopianideologiesof our time havetypically beencynically exploitedby their propounders,often acceptedby massesof peoplewho haveall beenfooled for someof the time, andimplementedwith extraordinarybrutality. Their adherentslong see(or claim to see)no contradiction betweenthe barbarismof the meansemployedand the highercivilizationthesemeansaresupposedto bring to birth. Basedon a crudedistortion of social Darwinism, the Europeanutopianismsof fascismwere frankly exclusive; the allegedly superiorcivilizations of fascist Italy, Nazi Germany, and FalangistSpain were to rest on the degradationor murder of thosenot participating,whetherdomesticgroupswho disagreed,or, more widely, foreign peopleswhosecultural andethnic inferiority was sufficient groundsfor imperial control or worse. Communistutopianismwas inclusive and multinational; its benefits,and the new egalitariansociety to be created,were to be extendedto all exceptthe nonegalitarianandexploitativeclasses,who by definition lackeda moral claim for further survival anddominance.Communist utopianismin powerexacteda heavy price from the purportedlytransitional generation,and it becamea blind for old-fashionednationalism.In Asia, inspired by the ChineseCultural Revolution, the Khmer Rouge designedthe mostextremeutopiandistortion, combininga national gulag-collectivism with utter exterminationof their own inherited culture and of all Cambodiancitizensdeemedtaintedwith foreign associationor learning. The meansby which the leadershipof thesetotalitarian statesmobilized sufficientdomesticsupportfor their policieshavebeenstudiedin greatdepth, as have the differencesin the programsand behavior,including the harshness,of ideologically similar authoritarianregimesin different countries. 232

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The striking differencesbetweenthe fascistprogramsof Germanyand Italy, and the very different responsesof their populationsto the drumbeatpropagandaextolling hatredof allegedinternalenemies,reflect (amongotherthings, of course)fundamentaldifferencesin culture. Kevin Avruch has an important insight in this respect.He observesthat thosewho cite and manipulatea of the specific "culture," in order to mobilize the supportand acquiescence large massof a populationwho seethemselvesas sharingthis "culture," are able to do so becausepeoplehavebasicmisconceptionsaboutthe presumed homogeneity,generality,andhistoricalcontinuity of their cultureandits particulars. He describesmisconceptions,of which the following are especially pertinentto our concern: 1. that any specific culture is free of contradictionsand inconsistencies (which enablesoneto characterizeall the membersof a culture with sweepingprejudicial denigrations,or to mobilize a culture's memberswith undifferentiated"instructions"),and as a result, 2. that a culture can be reified, leadingto easydismissalof the reality of intracultural diversity; 3. that the membersof anyoneculture can be lumped togetherbecausethey think and behaveuniformly; 4. that every individual possesses only a single culture, devoid of differentiation or cross-culturalaspectsof identity (an idea deriving from anthropologicaldescriptionof village level, and relatively remote microcultures);and 5. that culturesare timelessand changeless(he cites the idea that the "Arab mind" hasdescendedunchangingfrom Mohammed'sMecca). According to Avruch, thesebaselessnotions are employed whencultureis objectifiedby actorsandusedin politically charged-usually nationalistic,racialistic,or ethnic-discourses. Many of thesediscourses go way beyondthe injuries inflicted by [Matthew] Arnold's snobberyor eventheclasssystemof nineteenthcenturyEngland.As Rwanda,Burundi, Bosnia,and beforethem Nazi Germanyall demonstrate,they arecapable of provoking genocide.In fact, we havenow identified one way in which the cultureconcept,usedasan ideologicalresourceby contestants,is itself a source-oraccelerant-ofsocial conflict.! Avruch then draws out a suggestionfor conflict prevention: Onestrategyfor conflict preventionimmediatelypresentsitself: theproactive destruction,in the senseof debunkingand unmasking,of thoseinadequateideas.At least, this strategylogically falls out of seeingculture's

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role in the conflict. Theenactmentof sucha strategyin placeslike Rwanda, Burundi, orBosniais, of course,anothermatterentirely.2 It is easyto shareAvruch's skepticismabouthis own suggestion.Against the fear and ferocity experiencedin such places,a campaignof historical revisionism,of convincingviolent actorsthat neitherthey nor their enemies are what they have thought they are, seemsto be without hope of practical effect. Nevertheless,it should not be dismissedaltogetheras lacking any potentially beneficialimpactbeforeantagonismshavebeenmobilized and divisions hardened,long before the Rwandasare ready to explode.One might speculate,in retrospect,if the emerginghegemonicconceptualframework of the Sinhalese(long before independence)might have been modified or renderedlessmilitant had the mythic distortionsof history by the leadingSinhala intellectual of the late nineteenthand early twentieth century, Anagarika Dharmapala,beendiscreditedor at leastchallengedby otherthinkers.3 The upshot of Buddhist revivalism, as representedby Anagarika Dharmapala,wasto providea warrantfor intolerance,for viewing asinferiors and discriminatingagainst"peoplesperceivedas obstaclesto what rightfully belongsto the Sinhala."Thereareprecedentsfor suchintolerance with the chronicle tradition. But the particular characterand intensity of Dharmapala'sintolerancedependedon specialreligious,cultural, andpolitical conditionsandinfluencesin the nineteenthandearly twentiethcenturies. To that extent,Dharmapala'sintolerancewas"invented"or "new."4 In recentdecades,there has been much scholarshipshowing how cherishedtraditions(historical myths,clothing conventions,nationalcelebratory rituals and pageantry,triumphalist distortions of military history, etc.) rest on dubiousfactual basesand are often recentinventions,deliberatelycrafted to createhistorically unjustified beliefs of sharedtradition.s In the United States,the triumphalist tradition with respectto the American Indians has beentotally repudiated.I cite this not as a conflict-reducingadvance,but as an indication of how scholarshipand media attention can alter an entire nation'sidea of the contentof its traditions.Although this U.s. experience was not the product of a deliberate,government-inspiredeffort, it suggests that initiatives along suchlines might be fruitful as instrumentsfor reducing stereotypicaland prejudicial thinking and for weakening appealsto ethnonationalistexclusionandchauvinism.Suchcultural "intervention"might befeasibleunderinternationalauspicessuchasthat of UNESCO,or by private foundation supportof local institutions capableof independentscholarship and dedicatedto conflict preventionin their own societies.Cross-cultural educationto reducestereotypicalthinking and prejudice, as a part of the

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regularschoolcurriculum, is already underway in somecountries,with internationaltechnicalassistance.In countrieswhere the statestandsfor rule of law and humanrights, and where it servesas arbiter ratherthan partisan, programsalong the lines of Avruch's suggestionmight be feasible. Correctionof triumphal and denigratingfictions could serveseveraluseful purposes.It could strengthenthe basisfor apologiesand help makerestitution politically feasible. It could help reducethreat perceptions.It could help underminethe plausibility of chauvinismand the credibility of hegemonic claims. And it could clear the ground for resurrectingfacts of past amicableand integratedrelationships. Ordinary DevelopmentResearch: Illuminating Frictions and Fictions

The developmentagenciesconducta greatdeal of individual country inforreconmation-gatheringand researchas a part of regularbusiness-project naissancemissions, project feasibility studies, market analyses,project of generaleconomicconditions, monitoringandevaluation,recurrent studies sectorstudies,and so on. Theseprofessionalmissionsand studiesmay provide objective,empirical information and analysesregardingconditionsand problemsthat are currently sourcesof ethnic grievanceand contentionor that containthe seedsof potential social conflict, evenif the studiesare not being drawn upon for systematicconflict assessment as suggestedearlier. Take,for example,allegationsthat one ethnic groupis exploiting another. Membersof ethnic majoritiesfrequentlybelievethey are being exploitedby a minority merchantclassgiven to sharpcommercialpractices,sometimes individually and sometimesin marketingconspiracies.Suchviews are common where a minority, especiallyof immigrant descent,servesas produce buyers and small credit suppliersfor "indigenous"farmers.In somecountries emergingfrom colonialism, such beliefs were the rationalefor largescale expulsions.In others,the beliefs were used to justify discriminatory policies. Objectivemarketresearchmay be able to establishwhetheror not monopsonistor monopolist conditionsactually exist. If the allegationsare shownto be groundless,the researchwill haveprovidedthe meansfor factbasedrefutation. If the allegations arecorrect, theresearchwill haveestablished a basisfor informed policy, suchas measuresto promotecompetition or adoptMalaysia-stylepreferences. Another example might be drawn from the Mozambicanprivatization experiencedescribedabove.If early monitoring of the privatizationprocess had established(as subsequentlyalleged) that the domestic entrepreneurs acquiring the state enterprisesderived largely from a single ethnic group

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(which wasassociatedwith the ruling political party), aid-sponsored research could have put the issueson the table and explored the purportedfactual explanations(a paucity of entrepreneursof other ethnic origin) and allegations of favoritism (political/ethnic bias in the associatedcredit extension and enterpriseawards).If paucity rather than favoritism had beendemonstratedto be the problem,measurescould havebeendevisedto bring abouta moreethnically diverseoutcome(suchasextendingthe time frame, marking a groupof enterprisesas set-asides,andlocatingamongthe underrepresented groupssuitableentrepreneurs or talentwho could becomecapablewith technical and financial assistance). Persuasionand Leverage Effective influenceon policies is often a combinationof persuasionand leverage.As a term of art in the aid context,leveragegoesbeyondpersuasion, referring to stepsthat donorsmight employ to elicit decisionsor actions a governmentwould not take otherwise.The balancethat donors may seek betweenpersuasionand leveragewill vary from caseto case,dependingon factorssuchas the importanceof donorinterestsat stake,the extentof democratic legitimacy of the governmentinvolved, the particularpoliciesat issue, and, of course,the (usually problematical)extentto which donorshavereal leverageto exercise.The internationalacceptabilityor respectabilityof the conceptof leveragehas risen and fallen over time. Circumlocutionshave becomecommonas the term "leverage"hastakenon an invidious character. Internationalagenciesfor many yearshaveusedthe term "policy dialogue" to refer to sensitiveinterlocution(which mayor may not crossthe fine line betweenpersuasionand leverage)with recipientgovernments. Governmentsseriouslyintent on economicdevelopmentnormally are receptive,even eager,to adoptchangesproposedor designedby aid-financed expertisein agriculture,transportation,and otherareasand disciplines.Economic policy changeswerelong a moredifficult sell. Economistsanddonor agencieswho urged developingcountry governmentsto adopt policies of private ownershipand the operationof competitive factor marketshad to competewith the command-economy, public-ownershipmodel, which was viewed as a viable alternativeuntil the collapseof the socialisteconomies. Evenin the "mixed" economiesthat comprisedthe developingcountrymainstream,partial or single-policyreforms(suchas rationalizingimport protection systems,correcting foreign exchangerate distortions, or introducing water-usechargesin irrigation projects)haveoften beendifficult to sell. Our casestudiesshowedexamplesof successesand failures in such attempts, wherethe policiesin questionwererelevantto deepsocietaldivisions.There

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is a considerableliteratureon the subjectof aid influence.Becauseaid agency work on governanceinstitutions,political development,andhumanrights is of relatively recentorigin comparedwith work on "technical"economicand sectoralpolicies,interestin the questionof aid influenceandhow suchinfluence might be effectively exercisedlong focused on tactics related to reforms of macroeconomicmanagementpolicies.The kinds of changeswe are consideringhere arearguablymore sensitive,more difficult to bring about, becausethey relate to fundamentalissuesof distribution, hegemony,and identity. Nevertheless,someof the lessonslearnedfrom donor experience with economicpolicy dialoguemay apply when donorsattemptto exercise aid influencefor conflict prevention. In their efforts to engagegovernmentson economicproblemsand policies, donorshavegiven greatweight to professionalexpertiseand analysis. Well-foundedresearchresultscanbe persuasiveenoughin themselves.They may bring public attentionto issuesthat havebeenneglectedor suppressed. If therehasbeendivided opinion amongseriousbureaucraticprofessionals, analysis and advice from outsiderswith respectedcredentialscan tip the scales.Donorsupportcanstrengthenthe handof technocratsunableto move power-holdersaway from discreditedor dysfunctional policies. Naturally, the politics of donorinvolvementin internal decisionprocesses canbe tricky. Donor supportof groupsespousingpolicy changesviewed by other groups asdetrimentalto their interestscarriesa risk. Donorscanbe accusedof intervention; officials they supportcanbe accusedof suspectloyalty. Conversely, the attachmentof policy conditionsto aid loans is acceptedpracticeand is often fully justifiable on groundsof technicalviability or policy credibility. The degreeof sensitivity and the scopefor chargesof improperintervention may also differ, dependingon a government'srelationswith individual donors or agencies.For historical reasons,individual countriesmay havemore trust in one donor governmentthan another,or more receptivity to policy recommendations from a multilateral institution than from an individual donor government. The use of leverage,as opposedto persuasionand good offices, raises different questions.Leveragecanbe exercisedin more or lessforceful ways. The disbursalof loans in tranchesreleasedonly after a borrowing government has met the policy commitmentsit made when negotiating with the lender(s)is commonpractice.Leveragethat takesmoreforceful forms, such as withholding a loan tranche,or threateningto withdraw aid from specific programs,or threateningto suspendor cancelthe aid relationship,relies on credibility to be effective. That is, representationsthat a donorjudgesgovernment(potential or actual) policies or actions to be unacceptableto the point ofunderrniningthe aid relationshipwill losecredibility if, in the event,

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the donor shrinks from carrying out the forewarnedor stipulatedsuspensions or cancellations.A donor's seriousnessrespectingsuch intentions is likely to be strengthenedif the donor has actually carriedthrough in sucha scenarioat sometime with somerecipient government.In practice,drastic leveragescenariosare more credible and easierto carry out, the more misguidedor objectionablethe policiesandactionsat issue,andthe moreunited the donorsinvolved. Conditionsor pressuresattachedto aid programsmay or may not be associatedwith diplomatic pressures,tradesanctions,or other forms of strongadvocacyor compulsion,dependingon the extentof international disapprovalof a government'sactions. It is generallypreferablefor policy commitmentsto be unambiguousand to be definedexplicitly whenquantifiableactionsor targetdatesareinvolved. OneUSAID study'sconclusionaboutthe benefitsof clarity in the undertakings of both partiesto an aid-relatedagreementrespectingmacroeconomic policy reforms-"theprogrammust be definablein terms specificand explicit enoughto permit a reasonableunequivocaljudgment about the adequacy of performancelater on"-should certainly apply to programs touchingdistribution, inclusion, nondiscriminatorygovernance,or otheraspectsof deepsocial division.6 The sheernumberof policy alterationsor new programinitiatives that donorswish to bring aboutshouldbe commensurate with the resourcesthe donorsare willing to provide and the implementation capacitiesof the responsiblegovernmentunits. Although advice and discreet allianceswith like-minded political or professionalinterlocutorsmay cover a wide range of policy areas,especiallywhere governmentis not a promoterof division or a hegemonicpartisan,the applicationof pressuresor leverageis bestfocusedon a limited numberof the mostcritical issues.Where feasible,an incentivestructureis bestthat links aid to positive performance, ratherthan in the negativeform of penaltiesand withdrawals. Perhapsmostimportantwasthe USAID's finding that externalassistance needsto be sustainedover timewhen the changesthat the donorsare urging and supportingare structural, such as tax and trade regime reforms, compared with stroke-of-the-penreforms (e.g., shifts to nondistortinginterest andforeign exchangerates).This point appliesvery forcefully to changesin distributionandgovernanceintendedto promoteinclusionandharmonyover division and hostility.

ResourceAllocation Among Countries:From Supportto Withdrawal The first allocationquestionany donorfacesis whetheror not to provideany financial anddevelopmentassistance resourcesto a countryin the first place,

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in any form whatsoever.There have always been wide differencesin the amountof aid providedto different recipientcountries,andthesedifferences havebeenmore markedamongbilateral donorsthan amongthe multilateral organizations.Formercolonial powershavetendedto focus on their former coloniesin orderto sustainhistorical and cultural ties or promotetrade and investment.Japaneseaid has favored Asian recipients.Somedonors favor recipientsthat follow strongly egalitarianpolicies.Aid during the Cold War was heavily skewed,by donorson both sides,to countriesbeing wooed or rewarded.Large fractions of American aid have long been allocatedto a handful of countrieswith highestpriority in U.S. foreign policy. Both U.N. andmultilateralbankallocationshavebeenmoreevenhanded, moreaffected by technical and performancecriteria, althoughnot immune from a smallcountry effect (i.e., recipientswith small populationstend to receive substantially more aid per capitathan do large-populationnations). World Bank and IMF country allocationshave also beenaffectedby political considerationswhen major donor shareholderson their governing boardshave strongly opposedextendingloans, at one time or another,to particular recipients.The U.N. DevelopmentProgrammeallocatesits core funds throughan apolitical arithmeticmethodbasedon factorslike percapita incomeand population,a systemthat appearsto leavelittle room for discretionary country-by-countryadjustments.Over the yearsthe World Bank has movedtoward increasinglytransparentallocation systemsbasedon population, percapitaincome,andobjectivecriteriaof performanceandneed.When developingnationsreachsome(undefined)rangeof per capitaincome,their receiptsof concessionaldevelopmentaid begin to phasedown toward total "graduation."Aid eligibility policies may be transparentandformal, as with the per capitaincomeceiling of the World Bank's "soft"window, the InternationalDevelopmentAssociation,or, more commonly amongbilateral donors, graduationmay be an informal processnot madeexplicit in any policy statementsor practicedwith any uniformity. Someallocationor eligibility criteria are technicalor legal. For example, the World Bank will not extendnew loansto a country that surpassesa certain thresholdof debt default, or a country that is not in good standingwith the IMF. A special problem is posedwhen a country emergesfrom an extendedconflict during which unserviceddebtsowed to the World Bank and IMF have mountedfrom accumulatingarrears.The outstandingdebt to the IMF in particularmust be repaid (in the Cambodiancase,for example,the outstandingarrearsto the Fund were paid by France)beforethe World Bank can resolveits own debt problemwith the country and beforethe deckscan be clearedfor new reconstructionfinancing. Commonly,an importantcriterion concernsa country'sshort-termeconomicmanagementpolicies. Persis-

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tent pursuitof policies causingseriouseconomicinstability or structuraldistortions is likely to bring abouta rupturein a government'srelationshipwith the IMF. A formal breakdownin the relationshipwith the IMF may in tum affect the flow of resourcesfrom the World Bank, the regionaldevelopment banks,and bilateral donors. Somelegal criteria are political in nature,like the provision in U.S. legislationthat mandatesa suspensionof Americanaid to a country if its democraticallyelectedgovernmentis overthrown by a military coup. Donor responsesto conflict situationshaveaffectedaid allocationin ways that depart substantiallyfrom the business-as-usual standardsabove. The optionshaverangedfrom large-scaleaid levelsfar exceedingwhat a country would havebeeneligible for otherwise,to total cancellation.Wheredonors are funding a "normal" aid program and face a governmentcarrying out inequitable,injurious, or unacceptablepolicies that mayor may not eventuate in violent conflict, they can try to exerciseleverageon thosepolicies by threatening,or acting, to lower or suspendtheir aid. Drastic lowering or cancellationof developmentaid may be part of a generalpunitive policy of economicand diplomatic sanctionsor isolation. Or, if humanitarianneeds are strong,donorsmay continueor increasetheir funding of programsconductedby (truly independent)nongovernmentalorganizations,while reducing or suspendingallocationsto the governmentand public sectoragencies. Becausethe multilateral developmentbanks do not conduct humanitarian programs,the ultimate performancesanctionon their disbursementswould be suspension. The largestoutpouringsof aid, hugein absolutevolume and very high in annual per capitaterms, have beenallocatedto postconflict reconstruction. Donorscommonlyrewardcountriesthat havereachedpeaceagreementsby providing a few yearsof massivefunding for reconstructionbefore allocations arereturnedto "normal" aid levels.The reasons for theseextraordinary allocations have been part humanitarianand part hard-nosedself-interest; the donors hope that successfulreconstruction-includingrepatriation, reconciliation,andnew political institutionsshapedto facilitate nonviolentdisputeresolution,buttressedby palpableimprovementin economicconditionswill preventa recurrenceof the conflict and contributeto regional stability. A similar calculusshouldapply to preventionprogramsthat help toavoid violent conflict in thefirst place.Supposea deeplydivideddevelopingcountry settles on a mutually agreedprogram of accommodationthat holds out a credibleprospectof long-termstability. By the samelogic that hasbeenapplied to preventingrecurrencein a postconflict situation, the international community should be willing, in a preconflict situation, to raise aid levels substantiallyif the settlementrequireslarge up-front funding(e.g., for land

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reform, or an ambitious regional developmentprogram).A preventiveaid surge, preconflict so to speak,is likely to be substantiallysmaller than a surgepostconflict,when destroyedphysical capital must be restoredmerely to bring the economyback to its prewarcondition.? It has long beencommonfor donor disapprovalof a country'seconomic policies to be signaledthrough provision of lessassistancethan the country requests,or than it needs,basedon standardresourceflow analyses.Disapproval can also be indicatedby reducingthe level of aid committedin one year, comparedwith previous years. Commitmentsare normally easierto usein this manner,comparedwith disbursements. The multilateral development banksnormally are in position to reduceor halt disbursementsunder an ongoing loan only if the borrowerhas failed to meet the precise conditions that havebeenspecifiedin the loan agreement.Oncea loan agreement has been signed, with the borrower perhapspaying up-front commitment fees,the banksregardthe loan as "belonging" to the borrower.As a practical matter,projectsrequiring the presenceof foreign technicaladviserscan also be interruptedif local securityconditionsbecomea threatto their safety. In the recentpast, as part of the processof increasinginternationalwillingnessto apply pressureor interveneif a sovereigngovernmentendorsesor carries out gross violations of the humanrights of its own citizens, donors havethreatenedto suspend,or haveactuallysuspended, aid flows. The threat of a freezeon plannedIMF funding and on major bilateral aid programswas apparentlyan important factor in the Indonesiangovernment'sdecision to 8 For countries acceptthe resultsof the EastTimoresevote for independence. with significant dependenceon aid flows, suspensionis the most powerful andsubstantive"intervention"availableto the internationalcommunity,short of economicsanctionson trade or investmentor -of military action. It representsa level of pressurethat most donorswould considerapplying only under crisis circumstancesas an eleventh-hourtool. But what is a "crisis"? Shouldthe aid relationshipin its entirety be reconsideredwhen circumstancesmight be judgedto be headingtoward a crisis? Should the ultimate aid sanctionbe employed,at least as a tool of persuasion, when a government'seconomicand social policies are clearly aimedat promotingthe hegemonyof the ethnicity controlling the stateand at excluding or discriminatingagainstsubordinategroups?In the eyesof a subordinateminority, a significant policy changedesignedto weakentheir statusor reducetheir rights (e.g., promulgationof a discriminatorylanguagepolicy) could be perceivedas a crisis. For the internationalcommunity, the crisis calling for a powerful responsemight not emergeuntil several years later, after the deprivedminority had mobilized the determinationand capability for launchingviolent conflict.

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Though statementsof regret over inaction before the crisis of violence eruptedhave becomecommon in recent years,regret is seldomexpressed for failures to respondto the precedingpolicy measuresandeventsthat were the precursorsor, more precisely,the beginningsof what shouldbe seenas an extendedcrisis in which the violent conflict was an inherentculmination. Thereis now a strongbody of opinion that it would havebeenlegitimate for the internationalcommunity, working through the United Nations, to intervenein Rwandato preventthe bloodbath.The focus of the expressions of regret over the failure to do so has beenon the hours or weeksat most when the specific intentions of the extremistsbecameunmistakable.The interventionprinciple hereis basedon credibleevidenceof murderousintent and capability, and it shouldbe applicableeven if the evidenceis discerned months before, or earlier. The more difficult question is how the international community shouldrespondat the crisis precursorstage,when events are being set into motion that, if not deflected,could well result in violent conflict, but in a future that can alwaysbe paintedin different scenarios. A large fraction of internationalfinancial assistanceflows directly to and through governments.World Bank, regionaldevelopmentbanks,and IMF loans are extendeddirectly to a borrowing governmentor its public agencies. Although theseresourcesgenerally are not intended(especiallysince the endoftheCold War)to supportparticularregimes,the funds do strengthen the incumbentgovernmentand its senior power-holders.This is especially the casewhendonorsprovidestraightmoney(i.e., balance-of-payments support and funding for the governmentbudget).But it is also the case,evenif indirect and "politically neutral," wheredonorsprovide technicalassistance to build the institutional capabilitiesof segmentsof the governmentbureaucracy, capabilitiesthat strengthenthe capacityof any regime to do what it chooses.As describedearlier, Rwandawas a particularly noxious example. The internationaldevelopmentbanks generally lend directly to central governments.If the banksextendloansto local jurisdictionsor otherdomestic entities,the loansmustbe guaranteedby the centralgovernment.Thus,it would be unusual forthe World Bank or a regional developmentbank tobe able to finance a project its borrower,the central government,did not want. On the other hand, the banks are not without influence. Often, when their funds arelargein relation to the resourcesat the disposalof the government, the banksareableto persuadethe borrowerto makechangesin its allocation priorities. Bilateral donorsmay havemore flexibility in many countries,especially becausein recentyearsthe bilateralshavebeenallocating increasing sharesof their grant resourcesdirectly to local jurisdictionsand NGOs. With rare exceptions,the bilateralscannotfinanceactivitiesthe centralgovernmentsare deadset against.(One such exceptionis Cambodiawherebi-

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lateral donors finance civil rights NGOs, and the local U.N. human rights monitoring office, which have beentoleratedby the governmentonly becauseit cannotafford to jeopardizethe flow of externalaid.) Despitethe rising interestin, and importanceof, NGOs as aid recipients andimplementingagencies,we shouldnot overlookthe fact that centralgovernmentshavebeenthe principal aid recipientsand policy interlocutorsover the five decadesof post-World War II developmentassistance.The postcolonial independentstates(India was an important exception)generally inheritedhighly centralizedgovernmentalsystems.The donorsviewed centralization(even if moderatedthrough someimplementationdecentralization) as an assetfor helpingto transformadministrativebureaucracies into developmentinstruments.Betweenthe essentiallygovernment-to-government, and multilateral agency-to-government, characterof the international aid system,and the view that governmentin newly independentdeveloping countrieswas a critical designerand generatorof economicgrowth, the aid processdeliberatelyfinancedand strengthenedthe state.In a deeplydivided society where the state has beencapturedas the instrumentof one group ratherthan serving as impartial mediatorand rights guarantor,external aid filtered throughthe statecan havethe perverseeffect of contributing to the likelihood of violent conflict. In sum, donorsshould presumethat developmentaid normally strengthensthe state.If donorsintend to circumventa regime,or fill in for its distributionaldeficiencies,they shoulddeliberatelyassessthe effectsof aid in this contextand considerthe kinds of measuressuggestedin this chapter.

When Nothing Else Works: Sanctions Most of the interventionswe have consideredaddressthe situation where violent conflict is still only incipient, and wherethe hostility emanatesfrom weakergroupsthat are relatively backward,disadvantaged,or excludedby the group (usually a majority, but sometimesa minority itself, as in Iraq and Burundi) that controls the state. Where a dominant ethnicity has gone to somelength to usethe power of the stateto repress,the bottom-upor other options discussedhere are not likely to be effective or even feasible.A repressivegovernmentis not likely to allow an externalagencyto shapedevelopmentactivities so as to strengthenthe very groupsthe governmentviews as internal enemies,especiallyif suchgroupsbegin to show potentiality for achievingthe very empowermentthe governmentis determinedto avoid. In general,aid agenciesshouldtakea strongstancewhereindividual rights are violated under governmentpolicies of selectedgroup discrimination. Becausesuch policies have frequently led to political instability or violent

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conflict, the developmentprocesscan be seriously compromised,whereas outright warfare causesdestructionof physical capital, someof which has beenfinancedwith aid money.Moral considerationsaside,developmentfinanciershavea prudentiaryinterestin the preventionof suchgrowth loss and physicaldestruction.Parliamentsand taxpayersin the caseof bilaterally financedprograms,and capital marketsin the caseof borrowing institutions like the World Bank, needto haveconfidencein the long-termsustainability of the developmentprocessin the recipientclients. Surely the avoidanceof the marginalizationof significant populationgroupsand of civil instability or warfare is at least as critical for a viable developmentprocessas is the adoptionof the soundmacro-andsectorpoliciesthat often havebeencentral to the relationshipsand frictions among the IMF, World Bank, and some bilateral agencieson the one hand,and developingcountrieson the other. The implication hereis that the bilateral donors,or the governingbodies of developmentagencies,should considerthe use of aid sanctionswhere recipient statesare violating internationalrights conventions orotherwise pursuingpolicies of group exclusionor repression.Quite apart from, even prior to, U.N. resolutionsor decisionsthat might cite a governmentfor violating internationalrights conventions,or call for sanctionsof one kind or another,donorsmay havepracticalandfiduciary groundsfor applying sanctions independently.A rangeof optionsof increasingseveritywould be availablefor negotiatingfor, or pressingfor, policy changes.They run from formal conditionalitieswritten into (relevant)individual projectandloan agreements prior to signing; prior conditionality appliedto the entire aid package,more forceful if doneby a groupof donorsin concert;freezingof new projectsand loans in the pipeline; withholding of disbursementsfor ongoing projects; cancellationof ongoingprojects;to suspensionof further aid eligibility. Donor countriescan also usetheir voting weight on the governingboardsof the multilateral agenciesto pressfor parallel multilateral sanctions. There are times when the position of thosein power is neitherblack nor white. The governmentis not pursuing a policy of empoweringminority ethnic groups or reducing discrimination or economic inequalities,but is also not violating human rights of minorities or pursuing policies deliberately harmful to the economic,cultural, or other interestsof the minorities. Or a changein the majority'sleadershipmay bring on an effort to accommodate and heal relations,perhapsdespitethe call of extremistsfor policies of exclusionand hegemony.Aid conditionality might then assistgovernments in the middle-thatis, governmentswilling to move toward inclusion and reductionof inequalities.Suchgovernmentsmight be ableto strengthentheir position with their own ethnic groupby pointing to the internationalsupport andresourcesan accommodatingpolicy would gamer.Conditionalityshould

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be madeas acceptableas possibleby linking it with technicalassistancein the design of a reformist agenda,and with sufficient financial supportto bring benefitsto both sides. In somesituations,of course,aid conditionalityon sensitivepolitical questions can be counterproductive.A governmentacceptingaid underunpopular conditionsmay risk attackfrom rivals within its own ethnic groupon the groundsof selling out to foreign pressures.If a governmentis divided betweenhard-linersand reformers,donorpressuresmay strengthenor weaken the positionof the reformers.Much dependson the issuesthat the conditions addressand on the effectivenesswith which the requisite policies are explainedto the public. Conditionality may be moreeffectiveandacceptableif it is usedto nudgea willing, albeit reluctantor hesitant,governmentto adopt incrementalpolicy changes,rather than being used to attemptto move an exclusionarygovernmentto makea completeabout-face.In the caseof highly repressiveregimes,strongerincentivesor disincentiveswould be neededif, indeed,any externalinfluenceis possibleat all. The term"political conditionality" is commonlyappliedto the useof aidthe threatof withdrawal, or actual cutoff-to inducea governmentto desist from policies, normally of political and rights repression,that the donors find highly objectionableand unacceptable.When the ultimate aid sanction has beenemployed,donor governmentshave generally linked its use with otherstrongdiplomatic andeconomicpressures.Becauseour concernin this book hasbeenon measuresthe developmentagenciescan pursueto address root causes,well beforeconditions approachthe crisis stageat which ultimatesanctionsarisefor consideration,we will not attemptto addany further to the literatureon political conditionality. As Michael Lund showedin his (1997) review of that literature, there appearto have been few successes amongthe numerousattemptsto elicit changedpolitical behaviorfrom the kinds of "obdurate"regimesthat havedriven donorgovernmentsto resortto (amongother instruments)the ultimate aid sanction.Aid cutoffs, or threats, haveelicited the liberalizationor otherpolitical changesthe donorsinsisted upon, only where a long list of conditions (not likely to be found in most cases)has occurred.Lund's conclusionsregardinglessonslearnedechothe point we have made repeatedlyon the hazardsof cookbook generalizing. Comparingthree main types of donor influence (aid with conditions, aid support without conditions,and persuasion),the literature shows that "No two applications,even of the samemode of influence, will have the same results.... Thesevariationsreflect the complexitiesof eachspecific developmentand conflict situationand the natureof the donor involvementin it, which defy one to predict consistent,universal patternsthat follow when any courseof action or policy is applied."9

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Donor Coordination:PracticalObstacles Despite,the proliferation of conflict-preventionmeetings,publications,researchandWeb sitesamongthe donors,onecannotnaively assumethat their apparentdeterminationto developeffective preventionroles will translate readily into cooperativeprograms.Donor coordinationfor all other worthy developmentalpurposes hashad a long and checkeredhistory. For many years,the major donorshave recognizedthe needto maintain and improve coordinationamong themselves,and with recipient governments,through the DevelopmentAssistanceCommitteeof the Organizationfor Economic Cooperationand Development,headquartered in Paris, and through formal coordinationmechanisms.As more countrieshavebecomedonorsover the years,the numberof official donorsin individual recipientnationscanrange up to fifty or more. The numberof NGOs working in developingcountries has shot up in recentyears.In someindividual nations,the numberof internationaland local NGOs working on the sameproblemsas the official internationaldevelopmentagencieshasrisen to over a thousand.1OOf course,the coordinationthat mattersfor conflict prevention-foraggregatingsufficient influence,resources,or pressures,to makea critical difference-will involve a relative handful of key donors. Even so, the record shows that the aid community may not automatically rise to the occasionwhen joint action might be fruitful. A recentWorld Bank paperon aid coordinationidentifies three levels of donor cooperation:information sharing and consultation;strategiccoordination---consensus on policies, objectives,and procedures;and operational coordination-programsor projects carried out and financed jointly. The literatureindicatesthat "aid coordinationbecomesmore difficult for participantsas they try to move from one level to the next. Instancesof strategic andoperationalcoordinationappearto havebeenmostcommonduring periods of crisis broughtaboutby severeeconomicdeterioration,food shortage, war, and prolongedviolent conflict, ratherthan in 'normal' times."l1 In our perspectivethis implies,ironically, that donorswill seeno extraordinaryneed for coordinationduring yearsof preconflict "normality" when there is time and scopeto makea difference,and will be increasinglyreadyto coordinate their efforts (in this case,toward conflict mitigation) as impendingor actual crisis is reducingthe likelihood that their actionscan be consequential. There is also a kind of ideological difficulty with the notion that external donors should presenta commonfront to a government,especiallyagainst aspectsof a government'sdomesticdevelopmentand socioeconomicpolicies. The difficulty stemsfrom the growing conviction that it is politically incorrect, and less efficient, for the donorsto run the aid process.Starting

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from the coordinationarrangements(formally initiated in 1958 when the World Bankchairedthe first donormeetingon India) characterizedfor many yearsby a sharpdistinction betweendonorofficials who lecturedand recipient officials who requested,the idea developedthat the relationshipshould rightly be construedas a partnership.The ideal aid processwould put the recipient in the chair and shift the coordinationrole from donorsto the recipient government.The World Bank recently formalizedthis preferencein a Comprehensive DevelopmentFrameworkfor donor-recipientrelationsthat makespartnershipa major objective.In mid-1999the aid ministersof Germany, the Netherlands,Norway, and the United Kingdom issueda call for bettercoordinationandfor putting the recipientcountriesin the aid "driver's seat."12Earlier donor guidelinesin the 1980shad alreadycalled for coordination to be primarily the recipient government'sresponsibility.13Earlier still, in the mid-1970s,a senior Indian governmentofficial gave me over lunch his extrememinimalist view of how the donor-recipientrelationship should operate.Through a door at one end of an empty room, the donor entersand placeshis moneyon the table.After the donor hasleft, the recipient entersfrom the other end, takesthe funds, and leaves.There is no conversation.The donor has dischargedhis moral obligation and the recipient useshis own judgmentas to the bestuse of the funds. There is an obvious problem with thesesentiments,especiallythose of my Indian colleague.They assumeimplicitly that the recipientgovernment is working for the bettermentof the populationas a whole and hasnot been capturedby one segment(or by a kleptocraticor vicious leadership)that is using the stateto establishhegemonicand exclusionarypolicies.As someof the country experienceshave shown, it has not beenuncommonfor the donors to be providing developmentassistance,in purportedly"normal" times, to countriesruled by governmentsthat were pursuingpolicies inconsistent with donorpolitical values,evenpolicies leadingto violent internal conflict. Placingcoordinationof aid policies with a recipientgovernmentundersuch circumstanceswould be irresponsibleand would risk making the donors a party to the policies of that governmentand to their consequences. If there is any aspectof the aid relationshipwhere there should be zero tolerancefor poordonorcoordination,it is in conflict prevention.Therehave beenencouragingexamplesof improved coordinationin the urgent atmosphereof somepostconflictcountries.14 Without the developmentof a comparablepreconflict senseof urgency,one cannotbe optimistic that business as usual will not prevail. There is a parallel here betweeninternationalresponseto crisesof violent conflict on the one hand, and crisesof economic destabilizationon the other. Many economistsdrawn to the practical businessof policy changeseecrisesas the periodsof greatestopportunity.One

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of the leadingpractitionersof economicpolicy reform, Arnold C. Harberger, believedthat [T]aking advantageof crises... is oneof the true secretsof greatfinance ministers,... great statesmen.The idea of taking advantageof crisesis closely relatedto the old debateconcerninga big pushversusgradualism. . . . Most of the time a true big push will emergein the wake of a major crisis. The importantmessageis that governmentshaveto be readyto take advantageof the crisis whenit happens.In doing so they shouldrecognize in advancethat, preciselybecauseof the crisis atmosphere,their actions will be limited in numberand will have to be taken quickly. In a crisis atmosphereit is possibleto do more than normally, but thereare still limits. The true lessonis to be able to move with deliberatespeed.That is to say,try to do the bestall the time-whenthereis a crisis and whenthereis no crisis.15 The bulk of the work on reformsto preventviolent conflict hasalsotaken placein the wake of, ratherthan prior to, crises.Unfortunately,it is often the casethat the apparentwide scope,the big window of opportunity, for systemic political and economicchangeis actually constrainedby the urgency the internationalcommunity has felt to cobble togetherthe minimally acceptablesetof new arrangements and policy frameworksthat will translatea cease-fireinto a peaceaccord. Conclusion I have written this book in the optimistic conviction that many conflicts in developingcountriescan at leastbe mitigatedif not prevented.I have tried to show that the developmentprocessmay be shapedto prevent interest differencesfrom degeneratinginto violent conflict, and that the international developmentagenciesare perforce significant actors in that process.At a minimum, they should adopt the Hippocratic oath: Do no harm. Agencies should avoid supportingpolicies or projects thatcan deepenconflict in an alreadydeeplydivided society.Deliberateattentionon their part to their past and potential effects on conflict can help them to realize contributionsto mitigation that may havebeen onlylatent thus far. Even whereantagonisms areexacerbated by symbolic,ethical,or cultural issues(e.g.,religiousexclusivity, fundamentalism,or prosyletizing;historicallegacies;languagedifferences)thatappearto befall outsidethe scopeandmandatesof thedevelopment agencies,they may still be in position to undertakemitigating interventions. Economicdevelopmentalsocreatescomplexity; economic,occupational,

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educational,professionaland other sourcesof personalidentity and selfinterestcan cut acrossand dilute historically sharpdifferentiations(of race, religion, andethnicity) that haveled to deeplydivided societies.Many ofthe componentsof the developmentprocessthat contributeto this complexity can affect the roots of conflict, exacerbatingor mitigating enmities,whatevertheir character.I havesuggestedhow country policies and projectsthat are the breadand butter of the developmentagencies'involvementin this process--concerning areassuch as structural adjustment,education,agribe assessed for their conculture, and the rules of the marketplace-should flict implicationsand designedaccordingly. In many developingnations,the perspectiveof conflict risk shouldbe at least,if not more,importantthan the more standardcriteria for aid allocation and usage.There is always a dangerthat theseagenciesand their practitioners will view a call to raise the priority of one set of objectivescompared with othersas yet anotherin a long line of successiveenthusiasmspressed upon them by new management,new political masters,or outsidecritics or supporters.Too often the requirementto take a new subjectinto accountin formal "assessments" in connectionwith appraisalof new project proposals (e.g., environment,gender,social impact, poverty, etc.) becomesan additional time-consumingand routine paperexercisethat servesto ward off or pacify yet anotherinterestgroup.In the caseof conflict prevention,this would be an unfortunateoutcome.Violent conflict undoesmuch of the economic, educational,or healthprogressthat hasbeenachievedfor the women, children, poor, or other groupsunder"targeted"aid programs;its worst impact, of course, is to kill large numbersof these "beneficiaries."And theseconflicts causegeneraleconomicdecline, if not disaster,bringing severedeprivation to entire populations,including especiallythe previously most disadvantaged.Thus, in terms of loss avoidanceand the enabling of regularcontinuingdevelopment,the benefitsfrom a dollar spent (successfully)in a deliberateconflict-preventionmodearelikely to exceed greatly the benefitsof a dollar spenton any other purpose,especiallyif an avoidableconflict is virtually certain to undo or frustrate theseother purposesentirely. Finally, September11,2001,and its aftermathshouldreinvigoratepublic debateover the aid, trade,and other policies through which the rich nations affect the well-being and destiniesof the poor. The reachand destabilizing potential of internationalterrorism have made plain how today'simpoverishedand geopoliticallyremotecountry can becometomorrow'ssourceof a far-reachingcrisis.With a modicumof foresight,andsufficientaid resources, the internationaldevelopmentcommunitycan makea more substantialcontribution to the spreadof nonviolentconflict resolution.

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Notes 1. Avruch, 1998,p. 16. 2. Ibid. 3. SeeLittle, 1994,pp. 21-36,for an accountof Dharmapala'scareerandinfluence. 4. Ibid., pp. 33-34. 5. See,for example,Eric HobsbawmandTerenceRanger,eds.,The Inventionof Tradition, Cambridge,UK: CambridgeUniversity Press,1984, which is a study of purportedlyancientBritish, Indian andAfrican colonial, andEuropeantraditions,of recentinventedorigin. 6. Agency for InternationalDevelopment,The Use of Program Loansto InfluencePolicy. Washington,DC: 1970,p. 30. 7. The readinessof donorsto providelarge-scalerestorationfunding to a country whose antagonistshave agreedto stop warring presentsa potential, perhapsonly theoretical,problemof "moral hazard."That is, if a regimeinitiates violent suppression that leadsto open conflict, presumablywith the expectationthat it will win, it cancredibly expectthat the donors,relievedwhen the conflict is ended,will substantially restorethe lossesof physical capital resulting from the regime'saggression. Suchan outcomewould depend,of course,on the natureof the peaceaccordand the ability of the regimeleadershipto avoid being chargedwith prosecutablecrimesof war and againsthumanity.Thus,the recordof postconflictreconstructionaid creates a basisfor a future aggressiveregimeto discountcapitaldestructionasa possiblecost to itself, which might otherwiseweigh againsta decisionto incur that risk. 8. Far EastEconomicReview,September23, 1999,p. 9. 9. Lund, 1997,SectionIV.B. 10. World Bank, 1999,p. 2. 11. Ibid., p. 3. 12. Ibid., p. 1. 13. Ibid., p. 5. 14. World Bank, 1998. 15. Arnold C. Harberger,in Vittorio Corboet aI., eds.,AdjustmentLendingRevisited: Policies to RestoreGrowth. Washington,DC: The World Bank, 1992,p. 92.

SelectedBibliography

Abrahamsson,Hans, and Anders Nilsson. 1996. The WashingtonConsensusand Mozambique:The Needto Questionthe WesternisedDevelopmentParadigm in Africa. Gothenburg,Sweden:GothenburgUniversity. Addison,Tony. 1998. RebuildingPost-ConflictAfrica: Reconstructionand Reform. Helsinki: UNUIWIDER. Anderson,Mary B. 1999.Do No Harm: How Aid Can SupportPeace-orWar. Boulder, CO: Lynne Reinner. Avruch, Kevin. 1998. Culture and Conflict Resolution.Washington,DC: U.S. Institute of Peace. Azam,Jean-Paul,andChristianMorisson,with SophieChauvinandSandrineRospabe. 1999. Conflict and Growth in Africa. Vol. 1: The Sahel.Paris: OECD DevelopmentCentre. Ball, Nicole. 1992. Pressingfor Peace: Can Aid Induce Reform?Washington,DC: OverseasDevelopmentCouncil. - - - , with TammyHalevy. 1996.Making PeaceWork: TheRoleofthe~ntemational DevelopmentCommunity.Washington,DC: OverseasDevelopmentCouncil. Barro, RobertJ. 1991. "EconomicGrowth in a Cross-Sectionof Countries."Quarterly Journal of Economics106: 407-444. Bennett,Andrew. 1999. "Case Studiesand Typological Theorieson Political Violenceand Instability." Paperreadat the Conferenceon AlternativeApproachesto AssessingandAnticipating Political Instability, Vienna,VA, March 23-24. Blair, Harry. 1998.SpreadingPowerto the Periphery:An Assessment of Democratic Local Governance.Washington,DC: USAID. Boyce, JamesK., and Manuel Pastor,Jr. 1998. "Aid for Peace:Can International FinancialInstitutionsHelp PreventConflict?" World Policy lournal15:2 (Summer). Brass,PaulR. 1997.Theftofan Idol: Text and Contextin the Representationof Collective Violence.Princeton,NJ: PrincetonUniversity Press. Brautigam,Deborah.1997. "Institutions, EconomicReform, and DemocraticConsolidationin Mauritius." ComparativePolitics 30 (October):45-62. Brogan,Patrick. 1998.World Conflicts. London:Bloomsbury. Brown, Michael E., and Sumit Ganguly,eds. 1996. GovernmentPolicies and Ethnic Relationsin Asia and the Pacific. Cambridge,MA: MIT Press. Callahan,David. 1997.UnwinnableWars: AmericanPowerandEthnic Conflict. New York: Hill and Wang. CarnegieCommissionon PreventingDeadlyConflict. 1997.PreventingDeadlyConflict. Washington,DC: CarnegieCorporationof New York. Carothers,Thomas.2000. Aiding DemocracyAbroad. Washington,DC: Carnegie Endowmentfor InternationalPeace. Cassen,Robert,et al. 1986. DoesAid Work? New York: Oxford University Press. 251

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Index

A Accelerators,139, 142 Adjustmentprograms.SeeStructural adjustment Affirmative action Malay, 75, 76, 78-79, 81-82 positive preference,208 purposeof, 183 United States,209 Afghanistan,8, 21-23 Africa multiplicity of causes,147, 156 privatization,204 statelegitimacy, 140 structuraladjustment,130 urbanization,132 Agriculture donor investmentin, 218, 224-225 food insecurity, 121-122 Aid, categoriesof, 104 Aid agencies.SeeDevelopmentaid agencies Aid conditionally, 145, 244-245 Aiding DemocracyAbroad, 177 Al Qaeda,21-22 Allocation. SeeResourceallocation Alternative projects,219-220 Annan, Kofi, 11-12,27,32-33 Anderson,Mary, 138 Anti-Sinicism, 85, 87 ArushaAccords, 57 Asher, Robert E., 45, 47-49, 69 Assessment,conflict, 168-175 ' Atwood,Brian,27-28,177 Authoritarian states,105-106,117 Auvinen, Juha,148, 149 Avruch, Kevin, 17-18,68,233-234 Awami League,46, 47

B Bangladesh,109, 120, 167 Barro, Robert1., 116 Basque,134 Behavior, reshaping,186-188,222 Belgianization,113 Belgium, 52, 113-114,210 Benevolentdespot,117 Bengalis,46, 47 Bhutan,92-93 Bilateral aid providers,xvi-xvii Bilateral developmentagencies financing, 242-243 mandates,31-32 Bin Laden,Osama,21 Bosnia Dayton PeaceAccords, 19 economiccost of war, 7 NGO reconciliationefforts, 186-188, 222 Brass,Paul, 106 Brautigam,Deborah,98 Brazil,170 Bridge-building, 185 Bureaufor Crisis Preventionand Recovery,40 Burundi, 166 Byzantine, 12

C Cambodia,119,232 Canada,62 CarnegieCommission PreventingDeadly Conflict, 16-17, 156-158, 165, 189 Projecton Ethnic Relations,193 Carothers,Thomas,177, 178-179,181, 189

257

258

INDEX

Carter,Jimmy, 121 Cassen,Robert, 37-38 CentralIntelligence Agency(CIA), 143 CRE. SeeComplexhumanitarian emergencies China, 11 Chinese Malaysian,75, 80, 81,91 Thai, 84-85, 91,131 CIA. SeeCentral IntelligenceAgency Civil servicereform, 225-227 Civil society, 181-185,185-193 Civil war, definition of, 19-20 Civilian development,104 Classinterest,115 Classloyalties. SeeLoyalties Class-warfaretheory, 119 Coerciveprevention,25, 26, 27, 30 Collective action, 14, 113-114,182 Collective violence, 106 Collier, Paul, 148-149,150 Comilla approach,48, 50 Commoninterests,168, 185, 192 CommunalGovernanceProgram(CGP), 179-180 Communism,and U.S. foreign aid, 176 CommunistParty of Thailand,85-87, 91 Communistutopianism,232 Complexhumanitarianemergencies (CRE), 9, 137-138,141, 150 Conditionally, aid, 145, 244-245 Conflict causesof, 122, 139, 146-147,153 exacerbationof, 109-111 political agendas,106 relationshipto economicdevelopment, 103-104,106-107, 148 spin interpretations,106 Conflict assessment, 168-175 Conflict forecasting.SeeConflict prediction Conflict management civil societyand, 185 democraticgovernments,116-117 economicdevelopmentand, 116-117, 118-120,122

Conflict modeling Minorities at Risk, 142-143 NetherlandsInstitute of International Relations,145-146 PIOOM,I44 StateFailure Project, 143-144 USAID, 144-145 WIDER, 137-138,139-142 Conflict prediction, 14-15, 105, 111 forecasting,150-153 models, 142-144 Seealso Early warnings Conflict prevention civil societyand, 185 coercive,25, 26, 27,30 developmentagenciesand, 26-27 financial costs,26, 31 policy tools for, 145 risks of, 26 structural.156-158 United States'strategy,27-29 Conflict Preventionand Reconstruction Team,39 Conflict resolution civil society and, 185 local vs. international,17 restricted,17-18,68 theories,17-18 Congo, 123, 146-147 ConsultativeGroups,39 Coordination,donor, 246-248 Copson,Raymondw., 147 Cost-benefitmethodology United Nations, 170-171 USAID, 171 CreativeAssociates,144 Croatia, 19 Croatians,187 Cross-ethniccoalitions, 117 Crosscutting,114, 115 Cultural protectionpolicies, 93

D Dallaire, RomeoA., 15 Dayton PeaceAccords, 19

INDEX

Decentralization,71, 73, 181 Demobilization,228-230 Democracypromotion, 176-180,184 Democraticgovernments,116-117 Deng, FrancisM., 147, 156 Desperatebargainers,149-150 Development,meaningof, 107 Developmentaid agencies,9 alternativeprojects,219-220 commonactivities, 103 competenceand effectivenessof, 37-39, 44 coordination,246-248 distribution inequities,195 ignoring conflict, 55-56, 58 mandates,31-37 persuasionand leverage,236-238 preventiveintervention,26-27 project appraisal,171, 220 unawareof conflict, 167 Seealso Non-governmental organizations(NGOs); Resource allocation; specific country Developmentassistance,104 DevelopmentAssistanceCommittee,39, 246 Developmenteconomics,35 Dharmapala,Anagarika,234 Diplomacy, preventive,18,25 Discrimination donorsand, 55, 61, 63, 67 negativepreference,208 Displacement,involuntary. SeeMigration Distribution, income. SeeIncome distribution Distribution inequities,195 Divisibility, 168 Donors.SeeDevelopmentaid agencies Drukpas,92-93

E Early warnings economiccrisis, 116 forecasting,151-153 Mozambique,96

259

Early warnings(continued) World War 1,155 Seealso Conflict prediction EastTimor, 15, 150 Ecocide, 108-109 Econometricanalysis,148-149 Economicaid, 104 affects of,58, 63 withdrawal of, 57, 240, 241,245 Economicassessment, 170-172 Economicconditions,worseningof, 140, 141 Economiccrisis, early warning signs, 116 Economicdevelopment affect on conflict management, 116-117,118-120,122 affect on ethnic relations,118-119 colonial vs. postcolonial,115-116 criticism of, 108 cultural compatibility, 112-113 donor preference,49-50 exacerbationof conflict, 109-111 relationshipto conflict, 103-104, 106-107, 148 relationshipto peace,104 speedof, 118 theoriesof, 107-108,118-119 Seealso Structuraladjustment Economicrights, 70-74, 206-207 Economicsanctions,16-17, 145, 243-245 Economicsectorsanalysis,172 Economicshock, 141, 173-174 Economictransition, 129, 196-197 Economics cost-benefitof prevention,31 cost of war, 7-8 development,35 social conflict's affect on, 10 Education aid for, 220-223 behavioralchangethrough, 186-188 multicultural curriculum, 186,234-235 preferentialpolicies, 210-212 EDUCO project, 222-223 El Salvador,222-223

260

INDEX

Empowerment,185 Energy crisis. SeeOil crisis Environmentaldegradation,108-109, 122, 141-142 Esman,Milton, 118, 133, 168,214,219 Ethnic cleansing,20, 137 Ethnic conflicts brief history of, 12-13 donors'ignoring,55-56,58 factors of, 169 Ethnic identity, 111-112 Ethnic politics, assessment of, 169 Ethnic relations economicdevelopment'saffect on, 118-119 functional separation,173 intermarriage,xv reshaping,186-187,222 successfulconflict prevention,63-66, 74-76, 79 urbanizationand, 132 Ethnic segmentation,172-173,206 Ethnic stereotyping,112 Ethnicity, xiii-xiv and mandates,33-36 reemergenceof, xiii sociopoliticalvs. anthropological paradigms,5 Seealso Language Ethnoregionalexclusion,85-87 Europe,World War 1,154-155 EuropeanCommission,39 Europeannationalism,126

F Family planning, 137 Fertility development-assistance programs,137 Flanders,12-13, 113-114 Flemings, 113-114 Food andAgriculture Organization,66 Food insecurity, 121-122 Food wars, 8 Forecasting,conflict. SeeConflict prediction

FrancophoneWalloons, 113 Frelimo, 94-96 Freud, Sigmund, 125-126 Functionalseparation,173 Fundamentalists, Islamic, 6, 21-24 G

Gal Oya project, 63-66, 192 Gasset,Ortegay, 125 Gay, Peter,126, 155 Genderbias, 188-190 Genocide,Rwanda,51-53, 58 Geography,111 German~ 119, 154-155 Global warming, 108-109 Gordon, David L., 47 Gornji Vakuf, 187 Governmenttype, and potentialfor conflict, 117 Great Britain,75-76 Greed, 149 Grievance,149 GUIT, Ted R., 142-143 H

Haiti, 179-180 HanseaticLeague,13 Harberger,Arnold C., 226, 248 Heisler, Martin 0.,5 Herring,Ronald,61-62,70 High-intensity conflict, 6, 105 Hirschman,Albert 0., 182, 191-192 Hitler, Adolf, 154 Hoeffler, 148-149 Horizontal inequality, 139 Horowitz, Donald, 60, 82, 112, 119, 120, 183, 211-212,213 Human DevelopmentReport(1998), 172 Humanrights conventions internationallaw, 13-14 sovereignimmunity, 11-12, 13 Humanrights indicators, 144 Humanrights violations, donors' ignoring, 55-56, 58

INDEX

Humanitarianagencies,9 Huntington,SamuelP., 4, 5 Hutu, 52, 54, 58, 123, 166

I Ibrahim, Anwar, 79 Identity, xiv, 111-112 IMF. SeeInternationalMonetary Fund Inaction, 15,25,51-52,72 Income distribution, 107, 171 Income inequality, 120--121, 139, 142 India, 11, 117-118 food insecurity, 121-122 interethnicviolence, 106 and Pakistan,45 riots, 132 Indians,Malaysian,81 Indonesia,117 conflict with EastTimor, 15, 150,241 migration, 134, 135-136 riots, 135 World Bank'srelationshipwith, 136 Industrializednations,bias toward, 107-108 Inequality, 107, 139 donor distribution, 195 horizontal, 139, 142 income, 120--121,139, 142 social, 139 Interdependence, 168 Intermarriage,xv Internal conflict, forms of, 19-21 InternationalFood Policy Research Institute, 121,218 InternationalMonetary Fund (IMP) allocationpreferences,239 Indonesia,241 riots, 130, 140 Sri Lanka, 63 structuraladjustment,129, 140--141,200 Yugoslavia,70, 72-73 Interstatewar, 3--6 Intrastatewar, 6 Involuntary displacement.SeeMigration Isan, 85, 90, 92 Islamic fundamentalists,6, 21-24

261

J Jayawardenegovernment,67--68 Jentleson,Bruce, 25-26, 30 Jinnah,MohammedAli, 45 Jongman,A., 144 K Kabila regime, 123 Kao,136 Karachi, 132 Kennedy,Paul, 156 Kenya, 167,204 Kenyatta,Jomo, 204 Khan, Yahya, 46, 47 Khmer Rouge, 119,232 Kikuyu, 204 Klitgaard, Robert, 35-36, 206, 212 Klugman, Jeni, 137, 139, 140 Kosovo,11 Kuala Lumpur, 132 L

Labor-forceanalysis,172 Labor marketliberalization,205-206 Lam Nam Oon, 89 Land policies, 225 Language conflict, 46, 60, 93, 132-133 policy, 223-224 Latin America, 182, 191-192 Lebanon,7, 228 Legitimacy, state,140 Leverage,236-238 Little, David, 68 Loan conditions,69-70 Low-intensity conflict, 6 Loyalties, 113. 114-115.126 Lund. Michael, 245

M Madurese.135 Mahaweli irrigation project. 62. 66-70

262

INDEX

Makian,136 Malay Muslims, Thailand,83, 91-92 Malaysia colonial background,75 economicpolicy, 76-79, 81-82, 91 ethnic relations,74-82, 132 political and economiccrisis, 79-80 power-sharing,180-181 preferentialpolicies, 210, 211-215 religious violence,80 World Bank'srelationshipwith, 79 Mann, Thomas,155 Mason, Edward,45, 47-49, 69 Maton, Jef, 53 Mauritius, 97-99 Messer,Ellen, 8 Migration, 133-136,173 involuntary displacement,110-111, 135,137,224-225,228 Military action, preemptive,25 Minorities at Risk, 142-143 Mobilization, 139 Mohamad,Mahathir, 79, 80 Moi, Daniel, 204 Moluccan Islands,135-136,207 Mozambique aid assistance,31, 94-95 donors' relationshipwith, 93-95, 96-97 early warning, 96 economiccost of war, 7 economicpolicy, 94 elections(1999), 95-96 privatization,204 World Bank'srelationshipwith, 94 Multicultural curriculum. SeeEducation Multilateral agencies,mandates,32-33 Multiplicity, of conflict causes,146-147 Muslim League(Pakistan),45 Muslims, Bosnian, 187 Myth-making, retrospective,xiv-xv

N Nafziger, E. Wayne, 148, 149 National Socialism, 154, 155 Natsios,Andrew, 28

Natural resourcedegradation,121, 123 Nazis, 154, 155 Nepalis,92-93 NetherlandsInstitute of International Relations,145-146,193 New EconomicPolicy (Malaysia),76-79, 82 NGOs. SeeNon-governmental organizations Nicolson, Harold, 115 Nigeria. economicrights, 207 Nigeria-Biafracivil war, 207 Non-governmentalorganizations(NGOs), 181-182,184 in Bosnia, 186-188,222 and donor preference,188-191 genderbias, 188-190 Nonmilitary aid, 104 Nordlinger, Eric, 113, 114, 180 North Atlantic Treaty Organization (NATO),11 Northern Ireland, 114

o Oberschall,Tony, 14-15 Oil crisis (1970s), 10,72,108,173 Organizationfor EconomicCooperation and Development(OECD), 39, 138, 246 Organizationfor Security and Cooperationin Europe(OSCE), 13 Oxford University, 137

P Pakistan donors' relationshipwith, 45, 47-51 economicpolicy, 45-46, 47-49 reasonsfor conflict, 45-47, 120 urbanizationand ethnic relations,132 World Bank'srelationshipwith, 45, 47-51 Pas,80 Peace,relationshipto economic development,104

INDEX

Peacesettlements,228 Persuasion,236-238 Philippines,134, 142 PIOOM,I44 Policy, preferential,207-215 Policy reform, 197-201 Political agendas,106 Political conditionality, 245 Political conditions,assessment of, 168-169 Political engineering,185 Populationdensity, 53, 122, 136-137 Populationmovement.SeeMigration Poverty, 107, 121-122,130, 170-172 Poverty-reductionprograms,77-78 Power-sharing,180-181 Prediction.SeeConflict prediction Preemptivemilitary action, 25 Preferences,regional,217-219,239 Preferentialpolicies, 207-215 economicobjectionto, 209-210 educationsystems,210-211 Prevention.SeeConflict prevention Preventivediplomacy, 18,25 Preventiveinaction, 15,51-52,72 Primordialism,xii-xiii, xiv Privatization,201-205 Projecton Ethnic Relations,193 Projects alternative,219-220 appraisal,171, 220 Proximatecauses,145 Prunier,Gerhard,53 Psychosocialeffectsof war, 8, 10 Public administration.SeeCivil service reform

Q Quotasystems,55, 60, 211 R Racism,donors'ignoring, 55, 58 Rahman,SheikhMujib, 46, 47 RandCorporation,151

263

Reform, 197-201 Regionalpreferences,217-219,239 Relief-to-developmentcontinuum,9-10 Religion, 114-115 Religious violence,80 Renamo,94-96 Resettlementprograms.SeeMigration Resourceallocation formulas, 168 preferences,217-219,239 processes,239-243 withdrawal, 57, 240, 241,245 Resourcebalanceanalysis,172 Restrictedconflict resolution.See Conflict resolution Retrospectivemyth-making,xiv-xv Riots IMF, 130, 140 India, 132 Indonesia,135 Malaysia,76, 79, 132 Rodrik, Dani, 116 RomanCatholic Church, 13 Root causes,139 Rothschild,Donald, 99 Russia,privatization,202, 203 "Russiandolls," 83, 88 Rwanda donors'relationshipwith, 52-58 economicaid, 54, 56-57 economiccost of war, 7 preventiveinaction, 15, 51-52 reasonsfor conflict, 52-53, 58 structuraladjustment,130-131 World Bank'srelationshipwith, 52-57, 59

s Sanctions,economic.SeeEconomic sanctions Sarajevo,132 Schmid,A., 144 Schools.SeeEducation Secessionistmovements,119-120 Securityassistance,104

264

INDEX

SecurityCouncil. SeeUnited Nations SecurityCouncil Sen,Amartya, 8 September11, 2001, 21, 23-24 Serbia,19 Shangane,94 Siam, 85 Singapore,122-123 Sinhalese,60--62, 63-67, 234 Sirageldin,Ismail, 136 Snodgrass,Donald, 78 Social conditions,assessment of, 168169 Social conflict, affect on economy,10 Social engineering,64 Social inequality, 139 Sociopoliticalinstability, 120-121 SouthAfrica, 149-150 SouthKorea, 202 Sovereignimmunity humanrights, 11-12, 13 internationallaw, 13-14,25 World Bank'sposition on, 36-37 Soviet-blocaid, 105 Sowell, Thomas,209 Spain, 134 Spin, 106 Sri Lanka donors' relationshipwith, 61, 62-63, 66,68 economicaid, 61, 62 economiccost of war, 7 Gal Oya project, 63-66, 192 Mahaweli irrigation project, 62, 66-70 poverty alleviation, 122 preferentialpolicies, 211 reasonsfor conflict, 60--62, 64 World Bank'srelationshipwith, 63, 66,68,69-70 State,role of, 169 StateFailure Project, 143-144 Statelegitimacy, 140 Stereotyping,112 Stem, Fritz,154, 155 Stiglitz, Joseph,200

Structuraladjustment,128-131,140-141, 195-197, 199-201 economicrights, 206-207 labor marketliberalization,205-206 privatization,201-205 StructuralAdjustmentCredit (SAC), 54, 56 StructuralAdjustmentProgram,54 Structuralviolence,58 Sumner,William Graham,126

T Taiwan, 202 Taliban,21-22 Tamil, 60--62, 63-67 Tanzania,150, 167,211 Tax policies, 215-217 Technicalassistance,104 Terrorism,6, 21-24 Thai, 82-83 Thailand aid projects,88-91 CommunistParty, 85-87, 91 donors' relationshipwith, 87-91 economicpolicy, 85, 91 ethnic Chineseexclusion,84-85, 91, 131 ethnoregionalexclusion,85-87 Malay separatistmovement,91-92 structuraladjustment,131 Tinbergen,Jan,35 Toer, PramoedyaAnanta,xiii Totalitarianism,117, 125 Transitions,129, 178, 196-197 Triggers, 139, 140, 142 Triumphalism,234-235 Tutsi,52, 123, 166 Tyranny, 117 U

United National Party (Sri Lanka), 61, 62 United Nations, 16, 170-171 United NationsChildren'sFund (UNICEF), 7, 129

INDEX

United NationsDevelopmentProgramme, 40,66,172,239 United NationsSecurityCouncil, 11,51, 52 United States categoriesof aid, 104 civil society programs,184-185 commencement of foreign aid, 176 genderbias, 188-190 multicultural curriculum, 186 preferentialpolicies, 209 preventionstrategy,27-29 and Sri Lanka, 62 triumphalism,234 United StatesAgency for International Development(USAID), 27-29 conflict preventionmodel, 144-145 cost-benefitanalysis,171 democracyprograms,177 Haiti, 179-180 Pakistan,49, 51 Sri Lanka, 63 Thailand, 88-91 United StatesInstitute of Peace,192 Uphoff, Norman, 64, 65 Urbanization,131-132 Urdu, 46 USAID. SeeUnited StatesAgency for InternationalDevelopment Uskoplje, 187 Utopianism,232-235 Uvin, Peter,55, 57-59,131

v Vietnamesemigration, 135 Violence collective, 106 forms of internal conflict, 19-21 levels of, 6 structural,58 Violence threshold,20-21 Von Hayek, FriedrichAugust, 153

265

w Walloons, 113 War economiccost of war, 7-8 Europe'senthusiasmfor (1914), 154-155 interstate,3-6 intrastate,6 Watching-brief, 173-174 Water sharing, 141 Weissman,StephenR., 166 WIDER. SeeWorld Institute for DevelopmentEconomicsResearch Withdrawal economicaid, 57, 240, 241,245 project, 62 Women, 165, 188-190 Woodward,SusanL., 70-73 World Bank allocationpreferences,239 civil society, 183-184 donor coordination,246-247 efficacy of, 38-39 ethnicity issues,33-34, 36 involuntary displacement,110 labor marketliberalization,205-206 mandates,32-34, 36-37 privatization, 203, 204-205 structuraladjustment,128, 129,200 Seealso specific country World Institute for Development EconomicsResearch(WIDER), 137-138, 139-142 World War I, 154-155

Y-z Youth, 190, 191-192,222 Yugoslavia,70-74, 132,207 Zambia, 167 Zartman,I. William, 147, 156 Zimbabwe,123

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About the Author RobertJ. Muscatis a developmenteconomistwith experienceas a practitioner and scholar.He hasworkedfor the U.S. Agency for InternationalDevelopmentin Thailand,Brazil, and Kenya. As the agency'schief economist,he was economic adviser to the Thai developmentplanning agency and the MalaysianMinistry of Financeand was planning director for the U.N. DevelopmentProgramme.He has consultedfor U.N. agenciesand the World Bank.Among his publicationsarebooksand monographson reconstruction, technical assistance,food aid, nutrition and development,population, and othersubjects.He hasbeena visiting scholarat Columbia'sEastAsian Institute and at the Institute for Conflict Analysis and Resolutionat GeorgeMason University.