Conflict has had devastating impacts on the populations of Libya and Syria, but it has also provided opportunities for new actors within their burgeoning war economies. In Libya, the removal of the Gaddafi regime, the proliferation of armed groups and the erosion of the state’s coercive capacity have produced an environment conducive for a new set of conflict entrepreneurs and armed actors to build new – or expand upon existing – forms of revenue. In Syria, the collapse of state authority and ongoing civil conflict has similarly led to the creation of new armed groups and a wide range of new economic elites, some aligned with the regime and others with a wide array of opposition groups. Others have generated significant revenues through their ability to deal across frontlines. The rise to prominence of these actors has, in many cases, entrenched negative incentives for the perpetuation of conflict and the disruption of conflict mediation efforts.
When we look at images of civil war such as the recent images from Syria, our gut response is that such destruction and suffering cannot and should not last. Surely war is a ‘means to an end’—and once that end is reached, civil society and the economy will rise from the ashes? Not necessarily so, says the literature on war economies: war can be ‘economics by other means’. We test this proposition by using satellite images to reconstruct the unwritten economic history of the Somali civil war.
War can be seen as a rational economic activity. Warlords and insurgent movements use violence to extract rents: through looting and extortion or by charging taxes and ‘protection payments’ from traders and producers in their territories. International aid can be a significant revenue source for such ‘violence entrepreneurs’: it can be embezzled, diverted at roadblocks or directed to allied populations rather than the vulnerable and displaced. A ‘combat economy’ thus creates an elite of warlords, criminals and fighters with a direct interest in the continuation of war.
The economic security of individuals and households is a major challenge for development interventions in conflict-affected countries. Once the conflict is over and humanitarian aid leaves, how do you feed people, secure livelihoods and improve markets and market access? An important finding from a major EU-funded research program on conflict analysis is that the answer to this question is closely linked to processes of institutional change that take place during violent conflict.
As the research conducted thus far as part of the MICROCON project illustrates, violent conflicts kill and destroy. However, conflict-affected countries are also characterized by intense institutional change that needs to be better understood. Institutional change takes place when different actors contest and sometimes win over former state institutions, transforming social, economic and political structures, organizations and norms.