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Giving Aid to Conflict-Affected Regions Can Backfire

Civil conflict has devastating effects on the livelihoods of millions of people and is a major obstacle to economic growth and poverty reduction. According to the World Bank (2011), “poverty reduction in countries affected by major violence is on average nearly a percentage point slower per year than in countries not affected by violence.” No conflict-affected state has yet achieved a single Millennium Development Goal (Corlazzoli and White 2013).

Given the poverty and devastation caused by civil conflict, an important question for policy research: what can we do to end, or at least alleviate conflict? One possible answer is to give more aid to conflict-affected areas. The idea behind this approach is that aid will reduce conflict by winning the hearts and minds of the population. The argument goes that by implementing development projects – for example by building roads, schools and hospitals – we can increase popular support for the government and reduce support for insurgent movements. With less support from the wider population, insurgents will find it more difficult to recruit fighters, acquire supplies and carry out attacks, leading to an overall reduction in conflict.

While the strategy of using aid to win hearts and minds is popular (for example, it is a central component of the U.S. Armed Forces’ counterinsurgency strategy), there is little evidence that it works well in practice. In fact, there is reason to believe that it can backfire. A recent report on civil counterinsurgency strategies by the RAND Corporation warns that “insurgents strategically target government efforts to win over the population.”

A recent paper, joint with my co-authors Joe Felter from Stanford and Patrick Johnston from RAND, tried to address this issue empirically by finding out how aid affects civil conflict in a real world scenario. To do this, we analyzed the case of Kalahi-CIDSS – a large World Bank-funded development program in the Philippines that disbursed grants for small infrastructure projects starting in 2003. Our question was how this program affected conflict between the government and several armed groups active in the country, including the communist New People’s Army and the Muslim-separatist Moro-Islamic Liberation Front.

A major challenge when trying to estimate the impact of aid is finding a suitable control group. Places that receive aid are usually very different from places that don’t – for one, they are usually poorer, and poverty often goes along with other problems like civil conflict. Therefore, finding that places that receive aid experience more conflict does not mean that aid caused conflict; it might just mean that donors targeted aid to places that were more prone to conflict in the first place (perhaps because these places were most in need).
We therefore took a different approach, made possible by the fact that the Kalahi-CIDSS program gave aid to only the poorest 25 percent of municipalities in a given province.

This created a discrete cutoff: municipalities at the 25th percentile of poverty received aid, ones that were only slightly less poor did not. Overall, municipalities that received aid were still substantially poorer than those who didn’t, but we were able to circumvent this problem by only comparing municipalities just below and just above the threshold. These municipalities should be similar in poverty levels and other factors that affect conflict, so that comparing them allowed us to isolate the causal effect of aid on conflict.















The figures above show our main results. The scatter dots to the left of the dotted line represent municipalities that were eligible to receive aid from Kalahi-CIDSS, the dots to the right represent ineligible municipalities. The first panel (pre-program) shows average casualty numbers before the program was rolled out, which were not substantially different for eligible and ineligible municipalities. However, the second panel (social preparation phase) shows that barely eligible municipalities experienced much larger numbers of casualties in the early phase of the program’s implementation (the “social preparation phase” which took place in the first 6 months after the program was launched). This is strong evidence that aid caused civil conflict in this case.

The figures below show that the increase in conflict was politically motivated and not just a result of opportunistic attempts to steal the project’s resources. The next panel (incidents involving NPA) shows that the program increased conflict with the communist New People’s Army (NPA) – the armed wing of the Communist Party of the Philippines. The last panel (incidents involving LE) shows that the program had no effect on conflict with so-called Lawless Elements (LE) – organized criminal groups without a political agenda.





So what does this mean for aid policy? Of course it does not (necessarily) mean that we should give less aid to conflict-affected areas. Many of the world’s poorest people live in conflict-affected areas and they are often in dire need of assistance. However, it means that we have to be careful when attempting to use aid to “win hearts and minds,” because this strategy can backfire. In addition, donors operating in conflict-affected areas should be aware that their projects can exacerbate existing conflicts and plan accordingly.

Unfortunately, little is known about how we can deliver aid to conflict-affected areas without exacerbating conflict, but recent evidence from Iraq suggests that smaller projects that are coordinated with security forces tend to be more successful (Berman et al.). More research on this important topic will hopefully allow donors to design aid interventions in conflict-affected areas that effectively improve livelihoods without exacerbating conflict.

Corlazzoli, V., and J. White. 2013 Measuring the Un-Measurable: Solutions to Measurement Challenges in Fragile and Conflict-affected Environments.CCVRI Working Paper
Crost B., J. Felter and P. Johnston. 2014. Aid Under Fire: Development Projects and Civil Conflict. American Economic Review 104(6): 1833-56.
World Bank. 2011. World Development Report 2011: Conflict, Security, and Development. World Bank