Working paper: Growth and Livelihoods in Fragile and Conflict-Affected Situations, Secure Livelihoods Research Consortium (SLRC)

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Researching livelihoods and services affected by conflict
Secure Livelihoods Research Consortium (SLRC)

Growth and Livelihoods in Fragile and Conflict-Affected Situations

Executive summary
The socioeconomic impacts of war and large-scale violence are often devastating, multiple and wideranging, and it is with some justification that violent conflict has come to be identified over the years as a major barrier to development.
Yet, although recent years have seen a marked increase in the level of interest directed towards
conflict-affected situations – or, to use the more common (and more contested) terminology, ‘fragile
states’ – our understanding of the realities of, and the processes occurring within, such places remains limited. Researchers and policymakers continue to struggle to make sense of the heterogeneity of war’s impacts – for example, among different population groups or over time – and fundamental questions regarding the effectiveness of programming loom large. This is particularly concerning given recent escalations in bilateral funding to states affected by conflict and fragility (Section 1).
In light of the problems we know war causes, the recognition that there is still much we do not know,
and the increasing visibility and influence of the ‘fragile states agenda’, this review synthesises the
available evidence on livelihoods and growth in fragile and conflict-affected situations with the aim of
identifying key findings (what do we know?), pinpointing specific weaknesses in the literature (what are
we missing?) and shedding light on the nature and composition of the evidence base (what are we
dealing with?). It brings together an extensive range of sources, identified through a rigorous and
comprehensive search methodology, and uses this material as the basis for a mapping exercise
whereby the literature is disaggregated into a number of different types or ‘categories’ of evidence
(Section 2). We find that four such ‘categories’ appear to dominate the burgeoning literature on growth
and livelihoods in fragile and conflict-affected situations:
■ Crunching the numbers: quantitative assessment and aggregate-level statistical evidence. Includes cross-country econometric evidence focusing on the economics of conflict onset, the costs of war, and aid effectiveness (dominated by regression analyses of large-number datasets); and quantitative description, analysis and measurement of livelihoods (e.g. Household Economy Approaches, Vulnerability Assessment Mapping)
■ What works? Programmatic evidence. Offers ‘lessons learnt’ and policy guidance on the practical mechanics of generating economic growth and supporting livelihoods, in terms of both broad policy reforms and specific interventions
■ Detailing the impacts of conflict: micro-level and case study evidence. Includes highly contextual qualitative case study evidence focusing on analyses of how people, communities and businesses respond to conflict; and micro-level quantitative evidence focusing on the transmission mechanisms (e.g. human capital formation) through which conflict affects poverty, incomes and growth
■ Enabling (economic) environments: growth diagnostics and business climate evidence. Broadly focused on business and investment climates, this category contains growth diagnostics evidence identifying the most severe ‘binding constraints’ on economic growth in conflict-affected situations; and macro-level Doing Business / firm-level Enterprise Survey evidence measuring investment climates
Using this mapping exercise as a starting point, the review then presents and critically assesses the
content of the synthesised literature. Three broad thematic areas are identified.
We first explore the impacts of conflict on growth, economic activity and livelihoods (Section 3). Making sense of the multiplicity of impacts is a challenge in itself, ranging as they do from: the highly visible (destruction of physical infrastructure) to the less tangible (psychological trauma); from the direct (loss of life through warfare) to the indirect (welfare losses through displacement); and from the local (shifting patterns of household economic activity) to the national (declines in GDP). However, our
analysis suggests that impacts can be organised around a set of five focal points: human and physical
capital; perceptions, attitudes and social capital at the local level; coping strategies and risk
management; markets and the private sector; and aggregate economic activity. The evidence found
within the literature helps us make sense of the multiple effects of war, the channels or mechanisms
through which conflict shapes livelihood and growth outcomes, and the variety of ways individuals,
households, communities and businesses cope and respond.
Second, we look at the effectiveness of programming, providing overviews of the kinds of economic and
livelihood interventions being rolled out (or championed) in conflict-affected situations and summarising
the evidence on outcomes and impacts (Section 4). (In an attempt to increase the accessibility of this
review, an ‘intervention tracker’ is provided in the Preface on page vi which enables readers to quickly
access sub-sections on particular programmes via hyperlinks.) Although relatively sizeable, the evidence base on programme impact in conflict-affected situations tends to be of low quality, with outputs often privileged over impacts and questions of internal design frequently taking precedence over the experiences of beneficiaries. More fundamentally, many studies and reports fail to include adequate information on their methodologies or data sources, making it difficult to accurately appraise the reliability of their conclusions and recommendations. Given the primary purpose of these studies – to provide practical policy guidance on ways to support livelihoods and engineer growth – this silence is particularly concerning.
Maintaining the broad focus on engagement but switching perspective, Section 5 considers the
importance of enabling environments for successful economic and livelihood recovery, exploring the
various elements of their construction. We focus on: the role of domestic government policies in
mediating the activities of, and outcomes for, households and businesses (included in this particular
sub-section is a discussion of growth diagnostics evidence); the role of informal institutions in mediating the experience and effects of programmes and policies; and dominant approaches to external economic engagement in conflict-affected situations. Throughout the discussion we draw attention to flaws, tensions and uncertainties in current economic practice, highlighting in particular the questionable positioning of economic growth as a means to achieving peacebuilding outcomes and the persistence of standardised, neoliberal-oriented economic models.
Having synthesised the main findings emerging from the vast literature (and the various ‘categories’ of
evidence found within it), we then pinpoint certain methodological problems with the evidence base and
flag up key knowledge gaps (Section 6). Of particular concern is the uncertainty surrounding the
accuracy and appropriateness of national-level economic data, notably Gross Domestic Product:
although growth rates appear promising in many conflict-affected countries, shortcomings associated
with attempts to measure economic activity at the aggregate level – including the (un)reliability of
national accounts data, a failure to include information on (often large and expanding) informal
economies, and an inability to capture sub-national dynamics – seriously call into question the
widespread practice of using such data as a basis for policymaking in places like Afghanistan. In an
attempt to provide constructive ways forward, we outline some possible alternatives for measuring
economic activity – alternatives that may help to generate more accurate, more grounded and more
usable evidence on economic processes occurring at various levels.
Due to the size of this review, a particular attempt has been made to increase its accessibility and
navigability to readers. As mentioned, in the Preface (page vi), an ‘intervention tracker’ can be found
which acts as a kind of ‘contents page’ for specific programmes; readers can easily identify which
interventions are covered and access these quickly through a series of hyperlinks. Similarly, consistent cross-referencing throughout the paper – again, with hyperlinks for better accessibility – helps to signpost relevant additional information and related sub-sections within the review.

To read the report: Growth%20and%20Livelihoods%20in%20Fragile%20and%20Conflict-Affected...

Tags: conflict, economy, fragile, growth, livelihood, research, state

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