American Economic Review, Vol. 99, page(s): 287-291
Civil war is very common in the developing world, with harmful welfare effects when it occurs. Many fear that the devastation wrought by violent conflict destroys social capital, impedes economic development, and leads to the recurrence of violence (Paul Collier et al. 2003).
In response, donors are injecting large amounts of aid into post-conflict countries. A significant share of this assistance is spent on "community driven reconstruction" (CDR) programs, which support the establishment of new local institutions in order to promote social reconciliation. Whether this assistance has this effect is, however, largely unknown. Can brief, foreign-funded efforts to build local institutions in fact have positive effects on local patterns of cooperation? We address this question using a randomized field experiment to evaluate the impact of a CDR project in northern Liberia. The project was funded by the United Kingdom's Department for International Development (DFID) and implemented by the International Rescue Committee (IRC).
Findings suggest that post-conflict development aid can have a measureable impact on social cohesion. In future work, we hope to use the survey data to uncover the mechanisms that account for this main finding.