COLLEGE OF HUMANITIES AND SOCIAL SCIENCES

SCHOOL OF SOCIAL SCIENCES

DEPARTRMENT OF POLITICAL SCIENCE AND PUBLIC ADMINISTRATION.

NAME: RONALD WAIRINDI MUGISHA

1. ‘Conflicts can create war economies from which both rebels and incumbent regimes
benefit. This makes intra-state conflicts very difficult to resolve since the point of
conflict may be precisely the legitimacy which it confers on actions that in peacetime
would be punishable as crimes.’ Discuss.

Introduction
Conflict has been defined as a dispute or a disagreement arising from incompatible goals
between two or more individuals, groups and states. To Holsti (1983) conflict is a particular
relationship between states and rival factions within a state which means subjective hostilities in
economic or Military terms. Mark and Snyder (1957) adopt a more comprehensive definition
arguing that conflict is an empirical phenomenon identifiable by four main conditions or
characteristics i.e. the existence of two or more parties, a situation of resource or position
scarcity, the presence of a behavior that is designed to injure or hurt the other party and
mutually opposed goals. Conflict generally entails antagonistic interactions or violent dispute or
armed clashes resulting from incompatibility of goals or positions. Conflict resolution therefore
is a mechanism through which conflict parties come together and agree to terminate a
conflict. Depending on their nature and context, conflicts emerge out of a complex interplay of
factors including socio-political and economic conditions.

1
 Throughout historical times, economic factors have played a vital role in Conflict even
though this dimension received the least academic evaluation and policy attention in the past.
The aftermath of the cold war in the 1990s, however witnessed a growing body of literature on
the political economy of wars and conflict as various actors sought to fashion self-financing
mechanisms in light of the retraction of super-power support. Thus driven by the above
impetus, contemporary research on intra state conflicts and new wars; Mary Kaldor (1998) has
pointed to the salience of economic factors as either triggering or exacerbating conflict. Kaysie
studdard argues that whereas economic factors may play an indirect or peripheral role at the
onset of Conflict, they have potential to shape the character, influence longevity and adaptation
of conflicts Kaysie studdard (2002). For Paul Collier (2000), predation may indeed be the sole
means by which rebellions sustain themselves financially. Relatedly, Collier and Hoeffler
(1998,2000) also find strong evidence to suggest that greed for control of lucrative resources is
more important as a predictor of rebellion than grievances. Another study by Grossman models
rebellion as an industry that generates profits from looting so that insurgents are
indistinguishable from bandits or pirates Grossman (1991,1999). In this type of conflicts,
regional linkages including population movements, smuggling routes, transnational identity
groups, criminal rings and political connections play a key role through political, economic and
social networks which often overlap each other and shift as the conflict progresses and incentive
structures expand.

This essay attempts to explore the complex interdependences between conflict and war
economies by focusing on how the later accelerates and complicates efforts to resolve the former
through the legitimization of actions that would otherwise be punishable as crimes in peace time.
The essay is structured in three parts. The first section scrutinizes how conflict and war
economies reinforce each other to expand opportunities for resource predation and conflict
continuity. Two theoretical perspectives i.e. Greed and grievance theory and the Rational choice
theory are adopted to emphasize the enduring relationship between conflict and economic
choices of conflict actors. The second part provides insight on how conflict embedment with
war economies pose a serious challenge to conflict resolution and peace building processes in
conflict states. Finally, Taking the example of Liberia, the essay concludes that conflict and war
economies in the context of intra-state wars tend to mutually reinforce and exacerbate each other
posing a serious challenge for conflict resolution efforts.

2
Conflict and war economies:

Unlike old interstate wars (1816-1985), the last two decades has witnessed an
exponential growth in the number of new forms of conflicts which are largely intra-state and
integrated to regional and global economic networks. This category of wars relies heavily on
natural resources for financing even though their exploitation may not constitute the outright
cause of such conflicts. The common denominator of these conflicts is that they thrive in
underdeveloped Countries grappling with incomplete state formation processes and those on the
verge of failure or complete state collapse. In addition, this category of wars manifest shifting
emphasis between political and economic dimensions where the ultimate goal is predation,
organized criminal activities, the appropriation of international humanitarian assistance aid and
collection of diaspora remittances, IPA Seminar report (2002). There two broad types of war
economies, the classical war economy that throughout history has been conceived as a means by
which economic resources are generated and directed towards financing state war efforts. This
type of war economy is anchored on development of Military industrial complexes as a pillar of
National Defense and security although other activities may as well be undertaken by the
state and individuals to bolster local military capacities by generating resources to
supplement military budgets, undertake local manufacturing of small arms, purchase of
allies loyalty to facilitate arms transfers and provision of infrastructure development for
Armed Forces in exchange for lucrative resources such as oil and precious Minerals.

Another category of war economy and which is the subject of this essay entails “illicit”
and “informal markets” that co-exist along with armed violence in conflict zones. Karen
Ballantine & Heiko (2005) have identified five distinctive features of illicit war economies i.e.
the destruction or circumvention of the formal government economy leading to the emergency
of black market economy which effectively blurs the line between formal and informal and
economic sectors. Secondly, Conflict actors use violent tactics to Pillage, plunder lucrative
resources causing displacement and maiming communities in resources rich areas so as to
acquire control over assets, trade routes and networks. Thirdly, war economies are highly
decentralized and privatized at the lower level where coercion is an instrument of extraction.
Fourthly, Combatants in war economies regularly rely on illicit exploitation of resources. Fifthly;
they rely on cross border net-works, Ethnic groups armed traffickers.

3
 Whereas illicit criminal Economies are vital for the sustainment of conflict and war effort
for both state and non -state actors, they also provide a source of livelihood in form of jobs
and employment among local’s see; world Bank report (2011, Justino et.al 2013). Secondly, in
conflict environments, the limits of economic opportunity and exploitation accruing to warrying
parties is dependent on the extent of their ability to project power and military strength.
Building on this point, Naylor has gone as far as to state that competition between insurgents and
the state over resource control often results into zones of “contention”, “expansion” and
“control” Naylor (2002) where the decisive factor underlying conflict financing strategy is
the balance of power and the extent to which actors have capacity to project themselves and
control of endowed territories while denying the same from other contenders. In order to
entrench war economies, insurgent’s Groups and Rebel movements often establish shadow
structures or defacto Governments mimicking official government institutions. At this stage, the
war economy is essentially symbiotic providing some form of benefits to communities in
terms of goods and services and ensuring law and order within the zones of control. The zones
are also essential to stabilizing the funding base, providing legitimacy and political acceptability
and ensuring social mobilization and recruitment to build capacity for conflict escalation and
predation.

Greed versus grievance theoretical perspective of conflict and war economies

Perhaps the most suitable theoretical frame works to understanding the nexus between
conflicts and war economies include; the greed versus grievance theory propounded by Collier &
Hoeffler (1998, 2001, 2002 & 2004) and the Rational Choice theory traced to Adam smith
(1776). For Collier & Hoeffler, there are two critical motivations for rebellions i.e. Greed and
Grievance. However, since most rebellions are driven by a cause and supported by the
narrative of grievance whose assuagement through rebellion is a public good that Governments
cannot provide, such rebellions are likely to be rare Collier & Hoeffler (2000). Instead, the duo
avers that many rebellions appear to be linked to the capture of resources such as diamonds in
Angola, Drugs in Colombia, Timber in Cambodia etc. In such Countries, opportunities for
predation and control of primary commodity exports causes conflict with unfolding grievances
which encourages diasporas to further finance and perpetuate conflict. In a nutshell, Collier &

4
Hoeffler conclude that the presence of primary commodity exports sustains rebellions with
objective grievances while at the same time objective grievances underlie rebellions whose goal
is economic or resource predation. This theory is therefore significant in as far as it emphasizes
the economic dimensions of conflicts not only as a cause but also as an incentive for
rebellion.

Rational Choice theory of conflict and war economies

The linkage between conflict and war economies is also illustrated through the Rational
Choice theory of conflict which traces to its origin to Adam smith the father of modern free
market economics and his famous essay “An inquiry into the nature and causes of wealth of
Nations” of 1776. Building on the ideas of Thomas Hobbes 1588 -1679, Adam Smith argued
that human nature tends to towards maximizing self –interest which results into prosperity. In
their work titled conflict Economics, Charles Anderton and John Carter maintain that
principles, concepts and methods of economics can be applied to understanding conflict where
by wars, alliances, and terrorism are analyzed as purposeful choices based on particular
incentives out of a range of other alternatives Anderton & Carter (2019).

The central premise of the RCT is that human behavior is goal oriented and calculative
Little (1993:40). Generally, rationality is understood in terms of means and not ends. As a result,
no matter the ends, people try to optimize benefits. Thus in a nutshell, rational actor
perspectives portray conflict actors and political elite as rational utility maximizing individuals
where by resources within their areas of control present an opportunity to line their own
pockets by engaging in rent seeking behavior. Ross (2001) on the other hand argues that when
governments receive windfall from resource boom, rational actors will seize the opportunity to
either directly seize the rents created by resource booms or gain full control over the right to
allocate them in a process he calls “rent-seizing”. Hence predation and resource control is a
key organizing principle of power within such states. Like the Greed model, the rational Choice
theory provides a clear understanding of the rationale of conflict from a humanist perspective
which is to maximize benefits and incentives arising from conflict perpetration.

The complexity of war economies and conflict resolution.

5
 Beyond the Greed and grievance and the rational choice perspectives of conflict and war
economies, conflict economic agendas within intrastate conflicts present a series of complexities
for conflict resolution and peace building efforts because of their domestic, regional and global
interconnections. At the domestic level, war economies have potential to embolden and
reinforce conflict by providing favorable pre- conditions for persistency of conflict including
providing key players access to resources for power consolidation and conflict continuity.

The Liberia war 1989-1997 provides one such classic example where conflict and war
economies conspired to foster total state collapse by 1989. At the time, the institution of state as
a monopoly of force and violence had totally been decimated and could no longer provide
security or exert any form of influence across the country. This led to brutal contestations for
power among non-state actors such as war lords, rebellious organizations and Para-Military
Groups all striving to fill the void of the state see (Munkler, 2006, Rotberg 2003).

In the ensuring conflict, virtually all fighting Groups adopted to looting and plunder
with big cities such as Monrovia being the most preferred location by actors for predation.
According to accounts by Atikson (1997) Charles Taylor’s National Patriotic Front of Liberia for
instance looted from the Liberian National refinery corporation fuel worth USD 1.5 Million
to facilitate its operations. Major conflict players also generated war resources through the
war economy’s external sources of financing and income such as diaspora remittances and illicit
export of diamonds and rubber to neighboring Countries. Thus Liberia’s war economy with its
diversified external sources of income, including domestic looting, illicit exports of precious
minerals, foreign aid and donations, diaspora remittances etc. provided financial and material
inflows that kept the whole system of conflict running. Conflict actors with Charles Taylor on
top of the hierarchy enriched themselves and particularly turned diamonds into a weapon of
war and mantaince of their status. It follows that conflicts of this nature are likely to smolder
endlessly until their main sources of fueling are cut-off through measures such as international
embargos and multilateral interventions.

Secondly, an analysis of conflicts in Afghanistan, Sierra Leon and Bosnia and

Herzegovina concerning the political economy of regional war economies suggests that civil
wars and conflict in one Country may generate “spill over and “spill into” effects in neighboring
states through trans-border networks, which prolongs the resolution of such conflicts

6
because of the regional and fluid nature of Spoilers involved; Kaysie Studdard (2004). In fact,
regional conflict dynamics particularly pose serious challenges to peace building efforts in
which case attempts to ignore such dimensions on the part of policy makers may create a
“balloon effect” where corruption, instability and criminal networks simply migrate to a
neighboring Country (countries) creating cycles of conflict with immutable threats to peace
building efforts.

Thirdly, the resilient nature Criminal economies and their potential to subsist
underground in the post conflict phase may also pose a serious challenge to peace. In cases
where Spoilers feel marginalized by peace processes, they are likely to exploit post conflict
fragilities and the informal sector connections to maintain their power and status by supporting
vanquished Groups in order to challenge the authority of post conflict order. Therefore,
identifying such Groups and their role in the informal economy is a vital step towards
building durable peace in the post conflict era. This however requires a complex policy
approach coupled with deliberate regulation and denial of such resources outside formal,
structures, strengthening and enforcement of arms embargoes, adoption of regional mechanisms
to deal with illicit trade in war related commodity exports, cooption of spoilers with a view
to integrating them in the formal economy and the sanctioning or criminalization of warlords
and leaders of rebel movements so as to bring them to justice which is a pain staking
processing.

Fourthly, programs such as Disarmament, demobilization and reintegration (DDR) face

serious challenges since the possession of arms and weapons is not just about security but
also an important source of economic power as arms ensure forceful resource extraction and
control; Heiko Nietzsche (2003). In such settings therefore, DDR programs need to be planned
for in a parallel and complimentary fashion being part and partial of the post conflict
development and reconstruction strategies.

Finally, in view of the state centric bias of Peace building efforts; it is not enough to
only engage and bring to fold neighboring states in peace building efforts particularly in cases
where war economies are intertwined with regional conflicts. Rather, conflict Mediators and the
international community have to strive to bring to fold and incorporate all informal actors and
representatives of criminal networks to the negotiating table. This entails tracking overt and

7
covert interests and agendas of such actors and ensuring that they are part of the negotiating
menu as well as factoring in the inclusion of such actors in post conflict peace building
programs such as training, provision of resettlement packages and adequate security measures
along boarders that are susceptible to illicit criminal networks. Yet, the implementation of these
processes may be resource intensive particularly for economies emerging from conflict.

In conclusion, the nexus between armed conflicts and war economies provides new
insights to understanding conflict persistence and the futility of peace building efforts
particularly in cases where mediators adopt a state centric approaches ignoring the role of
informal conflict systems and criminal networks engaged in war economies which entail a
host of activities including circumvention of formal economic structures, looting, pillage
and plunder and violence in the pursuit of economic interests . Moreover, taking the example
of Liberia 1980-1997, it is logical to conclude that the self-reinforcing nature of Armed conflict
and war economies at national, regional and global levels underlies the complexities of peace
building and conflict resolution efforts in most conflict states today. For policy makers and
mediators seeking to design holistic peace strategies, assessing economic agendas and
activities of various actors in conflict situations is a vital step to achieving long term peace and
stability. Unless such actors and interests are brought to fold, they may continue to undermine
the post conflict political order by fanning violence and civil insurrection so as to make
peace untenable.

References

Atkinson, P. 1997. The War Economy in Liberia: A Political Analysis. London: RRN
Newsletter, No. 22.

8
Charles Anderton and Jonh Carter principles of conflict economics (2009) The Political
Economy of War, Terrorism, Genocide, and Peace

Heiko Nietzsche (2003). Transforming War Economies: Challenges for Peacemaking

and Peacebuilding

Herschel I. Grossman (1999) Kleptocracy and revolutions Oxford Economic Papers Vol. 51,
No. 2 (Apr., 1999), pp. 267-283 (17 pages) Published By: Oxford University Pres

Holsti, K. J. (1983). International Politics: A Framework for Analysis. London: Prentice Hall
International Inc.
John-Andrew McNeish Rethinking Resource Conflict (2010) DSN/Downloads/wdr background
paper - mcneish_0.pdf

Kare Ballentine Heiko Nietzsche (2005) Managing resource dimensions of civil wars

Mack, R. W., & Snyder, R. C. (1957). The Analysis of Social Conflict—Toward an Overview
and Synthesis. Journal of Conflict Resolution, 1, 212-248.
https://doi.org/10.1177/002200275700100208
Martina Fischer and Beatrix Schmelzle; (2005) Transforming war economies, Dilemmas and
strategies

Mary Kaldor (1998) New and Old wars stanford University press.

Münkler, H. 2002. Die neuen Kriege. Hamburg: Rowohlt Taschenbuch Verla

Münkler, H. 2006. Der Wandel des Krieges. Von der Symmetrie zur Asymmetrie. Weilerswist:
Velbrück Wissenschaft.

Paul Collier & Anke. Hoeffler Greed and Grievance in Civil war. (2000)

Policy research working paper

Rotberg, R. 2003. “The Failure and Collapse of Nation-States. Breakdown, Prevention, and
Repair”. In: Rotberg, R. (Ed.): When States fail. Causes and Consequences. Princeton:
Princeton University Press, pp. 1-49

RT Naylor Wages of Crime: (2002) Black Markets, Illegal Finance, and the Underworld

9
Zartman, W. 1995. “Introduction: Posing the Problem of State Collapse”. In: Zartman, W. (Ed.):
Collapsed States. The Disintegration and Restoration of Legitimate Authority. Boulder,
London: Lynne Rienners Publishers, pp. 1-11.

10