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Carrot or Stick? Development Aid and the Implementation of Peace Agreements by Recipient Governments

By Denzil Cil and Paul Huth

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The implementation of peace agreements following civil wars is a lengthy and complex process in which levels of implementation vary greatly (see Figure 1). For example, 46 percent of all agreements are implemented at less than 50 percent, whereas just 9 percent are fully implemented. Once two warring sides—a state and a rebel group—sign a peace agreement to end the civil conflict, they still need to implement the provisions of the agreement to make progress toward post-war recovery, reform, and sustainable peace. The consequences of failed implementation are severe. Fifty percent of the partially implemented peace agreements result in conflict recurrence. The average level of peace agreement implementation among cases where the conflict restarted is just 33 percent, while it is 66 percent among cases where it did not restart. Often recurring conflicts can be deadlier than the initial conflict and result in more destruction of physical and social infrastructure that further impedes economic development.  Thus, the successful implementation of peace agreements is an important predictor of long-lasting peace. The probability of conflict recurrence drops to 14 percent when peace agreements are fully implemented, compared to 75 percent when none of the provisions are implemented.   

Figure 1: Overall Level of Implementation across 80 Peace Processes between 1989–2014

Data from the Implementation of Peace Agreements Dataset (Cil 2016), which records the aggregate level of implementation for all final agreements signed by a state and a rebel group between 1989-2009 and tracks implementation events through 2014. It records 816 provisions and their level of implementation. It also records each event associated with progress towards implementing each provision by either the state or the rebel group. This figure presents the overall level of implementation achieved by both actors. Our analysis presented here, however, focuses on implementation by governments.

It is established that third-party actors can help warring parties reach an agreement to end civil wars by providing guarantees to monitor and enforce any peace agreement through the deployment of peacekeeping forces or observers. Knowing the conditions under which warring parties achieve successful implementation of a peace agreement and the strategies third parties can use to encourage compliance with peace agreements once implementation starts to falter, however, is of critical importance to lasting peace. Focusing on the process of implementation and how third-party states and international institutions can incentivize or enable governments to resume implementation of peace agreements once they start to backtrack, we find that both carrot—i.e., increase in project aid—and stick—i.e., decrease in direct aid— strategies in aid provision can be effective in restoring progress in implementation. The success of these strategies, however, depends upon (a) understanding the underlying reasons for failure to implement the peace agreement and (b) matching the appropriate strategy to the specific cause of implementation failure.

There are two underlying reasons for the failure of governments to implement provisions in a peace agreement. The first one is the lack of political will. Certain provisions such as political, military, economic, and territorial power sharing require the willingness of the government to implement. Some agreements include provisions about free and fair elections, while others call for the representation of rebel group members in the executive and/or legislative branches of the government as a part of political power sharing or grant autonomy to certain regions as a part of territorial power sharing. While the government agreed to these terms at the negotiating table, once the agreement is signed, it nevertheless has incentives to back track on these costly concessions in an attempt to get away with the minimum level of implementation possible, instead of fully complying with agreement terms.

We claim that governments continue making progress implementing provisions as long as the costs of reneging remain high. In other words, the driving force behind keeping promises and continuing the implementation process depends on the costs of non-compliance. In the post-conflict environment, where the former rebels usually demobilize and disarm, losing their ability to keep the government accountable, external sources of pressure become crucial, especially from foreign donors or international organizations. In the presence of these pressures, governments are more likely to continue making progress in provisions that require political willingness to implement.

The second reason for failure to implement is the lack of capacity. Provisions that require large scale economic reforms or restructuring of civil administration require more than the willingness of the government to implement. Some agreements include provisions that require the expansion of civil administration, improvement of local governance structures and/or judicial system. Others envisage the establishment of funds for post-conflict recovery and reintegration of ex-combatants to civilian life. In many cases, the implementation of these provisions is financially costly, and the government lacks the resources to follow through on its promises, even if it may have the willingness to do so. Thus, in instances of capacity deficiency, governments are likely to continue implementing provisions that require financial and technical resources as long as adequate levels of these resources are available, which development aid from donors can help ensure.  

Understating the reasons of failure to implement and devising a donor strategy that effectively responds to these different causes of failure is important to achieving successful outcomes. Specifically, the timing and type of development aid commitments is crucial. When the government is not making progress on power sharing provisions, donors can suspend or reduce direct support aid that contributes directly to the recipient government’s budget. In so doing, donors can send a direct signal to the government about their discontent and make the consequences of failed or stalled implementation costly. When the government is failing to make progress on provisions that require greater capacity, however, a suspension of aid is not likely to incentivize compliance. Instead donors should increase project aid that is earmarked for specific sectors, such as health, education, governance and other technical support, and thereby enable progress by the government toward implementing these provisions. Thus, evidence of failure to implement peace agreements requires very different strategic responses by donors depending on the causes driving the failure of implementation.  

We find in our statistical analysis of all 80 peace processes that include a final peace agreement signed between 1989 and 2009 that governments are much more likely to make progress on implementation in a given year if direct aid was decreased following failure to implement power sharing provisions in the previous year. In contrast, we find that the governments are much more likely to make progress in implementing larger reforms when project aid is increased as a response to failure to implement these provisions requiring greater capacity.  Figure 2 shows the predicted probability that the government will make progress on power sharing and reform provisions. As blue bars (bars on the left) show, the likelihood of progress is much higher when the stick—i.e., decrease in direct aid—or carrot—i.e., increase in project aid—strategies are employed correctly, based on the cause of failure to implement.

Figure 2 – The Effect of Development Aid on Implementation Progress
 
The main implication from this research is that donors need to monitor the process of implementation closely to successfully encourage progress and contribute to durable peace. Lack of progress in implementation may be caused by different factors and the failure of donors to correctly diagnose these underlying causes may result in further delays in implementation, or worse, conflict recurrence. The type and timing of development aid delivery is therefore crucial to incentivize or enable governments to continue making progress toward implementing peace agreements.
 
Associated Reading
Cil, Deniz. 2016. The Implementation of Peace Agreements Following Civil Wars and Post-Conflict Outcomes. PhD diss. University of Maryland: Political Science.
Cil, Deniz, and Paul Huth. Under review. Carrot or Stick? Development Aid and Implementation of Peace Agreements by Recipient Governments.
Dreher, Axel, Peter Nunnenkamp, and Rainer Thiele. 2008. Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis. Public Choice 136(1–2): 139–64.
Girod, Desha M., and Jennifer L. Tobin. 2016. Take the Money and Run: The Determinants of Compliance with Aid Agreements. International Organization 70(1): 209–39.
 
Biography
Deniz Cil is a postdoctoral scholar at the Center for International Development and Conflict Management at the University of Maryland, where she received her PhD in the Government and Politics Department.
Paul Huth is the Bauman Professor in the Department of Government and Politics at the University of Maryland, director of the Center for International Development and Conflict Management, and editor of Journal of Conflict Resolution. He is the author of Standing Your Ground: Territorial Disputes and International Conflict and Extended Deterrence and the Prevention of War; coauthor of The Democratic Peace and Territorial Conflict in the Twentieth Century; and coeditor of Peace and Conflict.
 
 
Supporting Service Agency
Air Force Office of Scientific Research
 
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