| Abstract: | The recent experience of El Salvador offers valuable lessons for economic policy in post-conflictual transitions. In the wake of a negotiated settlement to a civil war, economic policy must support the adjustment toward peace. In the short run, policy must promote not only macroeconomic stabilization but also political stabilization. This requires the mobilization of resources and the maintenance of political will for implementation of immediate peace-related needs such as the reintegration of excombatants into civil society and the strengthening of democratic institutions. Long-run policy objectives must encompass not only the attainment of macroeconomic balances, but also equity, that is, balance in the distribution of income and wealth; balanced investment in human, natural, and physical capital; and democratization in the broad sense of a more balanced distribution of power. In the end, policies which fail to build on the crucial complementarities between peace and development are unlikely to achieve either goal. |
