Debt Relief and Civil War

UNU WIDER Discussion Paper, 2001/57

Posted: 20 Nov 2014

See all articles by Tony Addison

Tony Addison

United Nations University

Syed Mansoob Murshed

Institute of Social Studies (ISS)

Multiple version iconThere are 2 versions of this paper

Date Written: 2001

Abstract

Of the 41 HIPCs, 11 are classified by the IMF and World Bank as conflict-affected. Can debt relief reduce the level of violent conflict in these countries? By providing additional resources to finance broad-based public spending, debt relief could help to redress the grievances that contribute to conflict. It could also reduce the ability of those motivated by greed to recruit followers, since the incomes, and therefore the grievances of followers, will fall if they benefit from broad-based public spending. But four things can go wrong with the use of debt relief in this way. First, the war party may prevail over the peace party in government, especially if the war party profits directly from conflict. Second, the fiscal system may be so institutionally weak that it cannot achieve the promised fiscal transfer even if the peace party prevails.

Keywords: debt relief, conflict, fiscal policy, sub-Saharan Africa

JEL Classification: C72, F34, F35, O10, O55

Suggested Citation

Addison, Tony and Murshed, Syed Mansoob, Debt Relief and Civil War (2001). UNU WIDER Discussion Paper, 2001/57, Available at SSRN: https://ssrn.com/abstract=2528099

Tony Addison (Contact Author)

United Nations University ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

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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