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Civil war and the economies of the peace dividend Paul Collier, CSAE Download the Paper (PDF format) - September 20, 1995 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing. ABSTRACT: ABSTRACT: Civil wars dramatically reduce income. Peace might therefore be expected to generate a dividend which both the government and the private sector can spend. Paradoxically, those civil wars which are prolonged and therefore do most damage create only small instant peace dividends. Income has fallen because capital has been lost and so cannot recover until capital has been reaccumulated. However, some of the capital losses are reverable. Once confidence in a secure environment is restored there is a delayed peace dividend as private capital is repatriated and `social capital' is rebuilt. Post-war governments should therefore focus not upon how to spend an illusory early dividend, but on how to restore private confidence. SUGGESTED CITATION: Paul Collier, "Civil war and the economies of the peace dividend " (September 20, 1995). The Centre for the Study of African Economies Working Paper Series. Working Paper 26. http://www.bepress.com/csae/paper26