The Political Economy of Peace

MONTEVIDEO – January 16 marks the 20th anniversary of the peace agreement between El Salvador’s government and the Frente Farabundo Martí para la Liberación Nacional (FMLN). Signed at Mexico City’s Chapultepec Castle, the agreement ended a 12-year civil war that killed roughly 100,000 in a country of about five million people.

Anniversaries provide an opportunity to reflect on the lessons of the past, as well as on setting new paths for the future. This is particularly fitting in light of post-conflict countries’ dismal record in accomplishing a transition to peace; since the end of the Cold War, roughly half of them have reverted to conflict within a few years, while most of the rest ended up highly dependent on foreign aid.

El Salvador stands out as an exception in both respects. Compliance with the peace agreement led to a perfectly observed cease-fire, in contrast to countries such as Angola, Timor-Leste, Iraq, Afghanistan, and others that relapsed into conflict. The country also managed to keep the peace without becoming aid-dependent.

Indeed, aid as a percentage of national income in El Salvador reached 7% in 1992 and fell rapidly thereafter. By contrast, in Mozambique, another country marking 20 years since the signature of its peace accord, aid peaked at more than 80% of national income in 1992, was 55% ten years later, and remains higher than 20% today. Aid reached extraordinary levels in other countries, too: in Liberia, it peaked at 178% of national income, in Democratic Republic of Congo at 100%, in Rwanda at 95%, and in Afghanistan at more than 50%.