Finance in Conflict and Reconstruction

UNU-WIDER working paper 01/2001; 2001/41

Posted: 20 Nov 2014

See all articles by Tony Addison

Tony Addison

United Nations University

Philippe Le Billon

University of British Columbia (UBC) - Department of Geography; University of British Columbia (UBC) - Liu Institute for Global Issues

Syed Mansoob Murshed

Institute of Social Studies (ISS)

Multiple version iconThere are 2 versions of this paper

Date Written: january 2001

Abstract

The relationship between an economy's financial sector and the occurrence and resolution of conflict may at first sight appear tenuous. Banking systems, financial regulation and currency arrangements do not appear to be relevant in understanding why nations collapse or why people kill each other. However, the linkages between the financial sector and issues of conflict are closer than one might expect. Narrow development — development that fails to reduce poverty and which exacerbates initial inequalities — is an important cause of conflict (but, needless to say, not the only one). Narrow development must be financed — and it is financed in ways that increase poverty and inequality and raise a society's propensity to violent conflict. During conflict, finance (both internal and external) can be decisive in determining who wins, as well as the duration of war.

Keywords: aid, conflict, financial development, sub-Saharan Africa

JEL Classification: O10, O55

Suggested Citation

Addison, Tony and Le Billon, Philippe and Murshed, Syed Mansoob, Finance in Conflict and Reconstruction (january 2001). UNU-WIDER working paper 01/2001; 2001/41, Available at SSRN: https://ssrn.com/abstract=2528081

Tony Addison (Contact Author)

United Nations University ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Philippe Le Billon

University of British Columbia (UBC) - Department of Geography ( email )

Canada

University of British Columbia (UBC) - Liu Institute for Global Issues

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Vancouver, British Columbia V6T 1Z2
Canada

Syed Mansoob Murshed

Institute of Social Studies (ISS) ( email )

PO Box 29776
2502 LT The Hague, 2518 AX
Netherlands
+31 70 426 0591 (Phone)
+31 70 426 0799 (Fax)

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