Introduction

A critical analysis of the aid debate in the context of conflict-affected countries Conflict-affected countries are among the largest recipients of foreign aid worldwide, often attracting much international donor attention; yet, aid has most often failed to achieve any medium-or long-term developmental goals in these countries. Financial assistance to these countries has often been spent on ‘irrelevant’, nondevelopmental projects, which have proven unsustainable in the face of conflict, or have ‘disappeared’ at the hands of the recipient country or the donor agencies themselves. Although potentially valuable in ‘normal’ circumstances, projects such as democracy-promotion, judicial reforms and training programmes for private sector entrepreneurs are not only likely to contribute very little to the economic revival of a conflict-affected country, but are also not in line with the changing trajectory of economic development in a conflict economy. In addition, apart from numerous cases of recipient governments’ corruption in handling aid, various reports also suggest that up to 60 per cent of tied aid stays in the donor country itself (Europa, 2005). This contradictory relationship between high levels of aid and the ineffectiveness of such flows indicates, at the first instance, that higher quantities of aid are not necessarily an answer to the ailing economies of conflict regions. Furthermore, this contradiction signals the mismatch between, on the one hand, the economic needs of a conflict-affected country and, on the other, the donor programmes devised for that country. This mismatch is an indication of the lack of understanding on the part of donors and their frameworks, of the dynamic ways in which a conflict affects the socio-economic structures of a country, and in turn, alters its development needs, priorities, and relevant policy options. The current book argues, using case studies within a political economy approach, that this seeming lack of understanding is due to two factors: first, the inability of the neoclassical economics framework, which is the basis of much of donor funding, to incorporate a comprehensive analysis of conflict economies within its rigid boundaries and restrictive assumptions, and second, the unwillingness of donors to take effective account of the conflict and its interaction with the economy, something which often originates from donors’ political, strategic and ideological interests in the conflict. It is based on these conclusions that the current book will argue that

‘developmental’ aid, in its current ideological framework and limited format, with its wide range of conditionalities, cannot fulfil the ambitious role of an instrument of economic development, particularly in the challenging context of conflict zones. International aid flows are far too ideologically-and politically-motivated to act as an instrument of economic development in the already politically-charged context of conflict-affected countries.