Abstract: | In the two to five years immediately following end of conflicts,UN peacekeeping operations have succeeded in maintaining peace,while income and consumption growth rates have been higher thannormal and recovery on key education and health indicators hasbeen possible. Aid also has been super-effective in promotingrecovery, not only by financing physical infrastructure butalso by helping in the monetary reconstruction of postconflicteconomies. However, sustaining these short-term gains was metwith two difficult challenges. First, long-term sustainabilityof peace and growth hinges primarily on the ability of postconflictsocieties to develop institutions for the delivery of publicgoods, which, in turn, depends on the capacity of post-conflictelites to overcome an entrenched culture of political fragmentationand form stable national coalitions, beyond their immediateethnic or regional power bases. Second, after catch-up growthruns its course, high levels of aid could lead to overvaluedreal currencies, at a time when growth requires a competitiveexchange rate and economic diversification. Successful peace-buildingwould, therefore, require that these political and economicimperatives of postconflict transitions be accounted for inthe design of UN peacekeeping operations as well as the aidregime. |