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1. Constraints to Domestic Enterprise Financing in Post-Conflict Liberia

Author:
John Gorlorwulu
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Countries emerging from protracted and devastating conflicts are often seen as needing significant external intervention in their financial markets to rebuild their private sector and promote quick and effective economic recovery. Despite enormous challenges, the provision of credit or the implementation of various lending schemes often dominate efforts to promote domestic private-sector recovery in the immediate aftermath of conflict. This approach raises a number of questions: First, how effective are loan programs in the development of domestic enterprises in the immediate aftermath of conflicts? Second, can loan programs work without significant improvements in the business climate? How sensitive is the design of lending programs to the success of domestic enterprise development projects following devastating conflicts? This paper explores the experience of the Liberian Enterprise Development Finance Company, which was established in 2007 to provide medium-and long-term credit to small and medium domestic enterprises. In addition to shedding light on the challenges such an enterprise faces in a post conflict environment, the paper explores whether the strategies employed are effective and if there are opportunities for effecting remedial changes that could improve the outcomes of such a program in post-conflict environments generally.
Topic:
Conflict Resolution, Civil War, Development, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa and Liberia

2. Capability Traps? The Mechanisms of Persistent Implementation Failure

Author:
Lant Pritchett, Michael Woolcock, and Matt Andrews
Publication Date:
12-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Many countries remain stuck in conditions of low productivity that many call “poverty traps.” Economic growth is only one aspect of development; another key dimension of development is the expansion of the administrative capability of the state, the capability of governments to affect the course of events by implementing policies and programs. We use a variety of empirical indicators of administrative capability to show that many countries remain in “state capability traps” in which the implementation capability of the state is both severely limited and improving (if at all) only very slowly. At their current pace of progress countries like Haiti or Afghanistan or Liberia would take hundreds (if not thousands) of years to reach the capability of a country like Singapore and decades to reach even a moderate capability country like India. We explore how this can be so. That is, we do not attempt to explain why countries remain in capability traps; this would require a historical, political and social analysis uniquely applied to each country. Rather, we focus on how countries manage to engage in the domestic and international logics of “development” and yet consistently fail to acquire capability. What are the techniques of failure? Two stand out. First, 'big development' encourages progress through importing standard responses to predetermined problems. This encourages isomorphic mimicry as a technique of failure: the adoption of the forms of other functional states and organizations which camouflages a persistent lack of function. Second, an inadequate theory of developmental change reinforces a fundamental mismatch between expectations and the actual capacity of prevailing administrative systems to implement even the most routine administrative tasks. This leads to premature load bearing, in which wishful thinking about the pace of progress and unrealistic expectations about the level and rate of improvement of capability lead to stresses and demands on systems that cause capability to weaken (if not collapse). We conclude with some suggestive directions for sabotaging these techniques of failure.
Topic:
Development, Economics, and Poverty
Political Geography:
Afghanistan, India, and Liberia

3. Development Assistance, Institution Building, and Social Cohesion after Civil War: Evidence from a Field Experiment in Liberia

Author:
Macartan Humphreys, James Fearon, and Jeremy M. Weinstein
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Can brief, foreign-funded efforts to build local institutions have positive effects on local patterns of governance, cooperation, and well-being? Prior research suggests that such small-scale, externally driven interventions are unlikely to substantially alter patterns of social interaction in a community, and that the ability of a community to act collectively is the result of a slow and necessarily indigenous process. We address this question using a randomized field experiment to assess the effects of a community-driven reconstruction (CDR) project carried out by the International Rescue Committee (IRC) in northern Liberia. The project attempted to build democratic, community-level institutions for making and implementing decisions about local public goods. We find powerful evidence that the program was successful in increasing social cohesion, some evidence that it reinforced democratic political attitudes and increased confidence in local decision-making procedures, but only weak evidence that material well-being was positively affected. There is essentially no evidence of adverse effects. *Jeremy Weinstein is on leave from the Center for Global Development.
Topic:
Conflict Resolution, Civil Society, Civil War, Development, and Foreign Aid
Political Geography:
Africa and Liberia

4. How Soon Can Donors Exit From Post-Conflict States?

Author:
Satish Chand and Ruth Coffman
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
When can a donor (successfully) exit from an on-the -ground presence in a post-conflict state? The answer, according to the analysis presented here, is in decades: figures well beyond what was originally envisioned when peacekeeping troops were first deployed. In the specific cases of Liberia, Mozambique, Solomon Islands, and Timor-Leste considered here, the best case scenario for successful exit ranges from 15 to 27 years. Successful exit, for the purposes of this paper, entails the creation of the necessary fiscal space to fund the recurrent budget from internally generated revenues. This is a necessary, albeit, not sufficient condition for donor exit. Of essence, however, is the time rather than the dollar value of support provided. An extended donor presence, it is argued, provides the space for the creation, sustenance, and maturation of institutions that are finally able to undergird the state from rolling back into state failure on donor exit.
Topic:
Conflict Resolution, Development, and Peace Studies
Political Geography:
Africa, Asia, Liberia, Mozambique, Solomon Islands, and Timor-Leste

5. Reviving Economic Growth in Liberia

Author:
Steve Radelet
Publication Date:
11-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Liberia was decimated by 25 years of gross economic mismanagement and 14 years of brutal civil war. GDP fell by over 90% in less than two decades, one of the largest economic collapses in the world since World War II. This paper explores the challenges in reinvigorating rapid, inclusive, and sustained economic growth in the post-war environment. It stresses the importance of not just reigniting growth, but rebuilding the economy in a way that avoids the substantial income concentration of the past and creates significant economic opportunities to groups that were marginalized and excluded in the past. It examines the new government's progress so far, including the major steps it has taken in its first 18 months and the unique way that it has organized government-donor relations.
Topic:
Development, Government, International Cooperation, and International Political Economy
Political Geography:
Africa and Liberia

6. Liberia's External Debt: Moving Towards Comprehensive Debt Relief

Author:
Steven Radelet
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this essay, CGD senior fellow Steve Radelet describes Liberia's debt situation and the key issues in moving forward on debt relief with the IMF, World Bank, African Development Bank and bilateral creditors. He explains why it is important for Liberia's recovery that the international community act quickly and outlines the key steps necessary for Liberia to achieve a debt deal before the end of 2007.
Topic:
Debt, Political Economy, and Poverty
Political Geography:
Africa and Liberia