• Governance & crisis states
• State building
• Institutional development
• Service delivery

Governance and crisis states

This paper notes that post-conflict countries face enormous development challenges and substantive policy consequences. It calls for appropriate responses for conflict affected nations such as financial assistance from donors, private investment and capacity building. Arguments given for resource transfers to post-conflict countries are that by increasing income, they reduce the risk of renewed conflict and also mitigate humanitarian crises left by the conflict. The second argument assumes that the humanitarian needs of conflict countries are due to conflict.

The paper counsels that the cause of conflict should be the key focus of donor assistance. While some argue that the main challenge is the continued absence of security, others argue that it is the destruction brought by conflict that is responsible for the low level of economic development. Yet others maintain that it is due to a state incapacity. Donors tend to focus on development assistance and priorities which correspond to a country’s income rather than its post-conflict status.

The paper outlines the political market imperfections which make post-conflict countries vulnerable -rendering political incentives to pursue long-run development and peace weak. These imperfections should shape the goals and modalities of foreign assistance to facilitate the delivery of social services, infrastructure, and capacity-building.

The paper suggests the following design for development assistance to post-conflict countries:

• countries with acute endemic violence and poor governance should strictly be given humanitarian assistance such as food and money transferred through NGO's with security assistance

• countries with significant security and governance concerns should rely on cash transfers and public good provision requiring less ongoing administrative capacity also through NGOs

• countries with conflict only in certain parts of their domain but with relatively better governance, should receive normal development assistance.

The paper concludes that donor governments have three objectives in post-conflict areas:

• responding to humanitarian needs

• recovering from the destruction of conflict, finding a path to sustained growth and

• cementing long-term peace.

To achieve these, government officials must have incentives to pursue the broad public interest in order to reduce political market imperfections that distort decision making and deter accountability.

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