CONFLICT PREVENTION AND POST-CONFLICT RECONSTRUCTION Mcd 66. Colombia. Essays on Conflict, Peace, and Development. Andres Solimano Editor

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1 CONFLICT PREVENTION AND POST-CONFLICT RECONSTRUCTION Mcd 66 Colombia Essays on Conflict, Peace, and Development Andres Solimano Editor President Andres Pastrana Foreword The World Bank Washington, D.C. ClQOO)

2 CONTENTS The Authors Foreword iii ix Andres Pastrana, President of Colombia Acknowledgments List of Acronyms and Abbreviations xi xiii Chapter 1 Introduction and Synthesis 1 Andres Solitnano Economic and Social Policies for Peace 2 Financing Pro-Peace Policies 3 Institutions, Actors, and a New Social Contract 4 Peace as a Global Public Good: The Role of the International Community 5 Plan of the Book 6 Conclusions 7 Chapter 2 Violence in Colombia: Building Sustainable Peace and Social Capital 9 Caroline Moser Introduction 9 A Conceptual Framework for Categorizing Violence in Colombia...11 A Threefold Categorization: Political, Economic, and Social Violence 11 Categorizing Violence Trends in Colombia 13 The Causes of Violence in Colombia 18 An Integrated Framework of Causality 18 The Causes of Violence in Colombia 19

3 COLOMBIA: ESSAYS ON CONFLICT, PEACE, AND DEVELOPMENT Costs of Violence in Colombia: Capital and Associated Asset Erosion 25 Macroeconomic Costs of Violence 28 Violence and the Erosion of Physical Capital 29 Violence and the Erosion of Human Capital 31 Violence and the Erosion of Social Capital 32 Violence and the Erosion of Natural Capital 35 Interventions to Reduce Violence 36 An Integrated Framework for Intervention 36 Interventions to Address Political Violence and Negotiate Peace in Colombia 40 Interventions to Reduce Economic and Social Violence in Colombia 45 Recommendations: Building Sustainable Peace and Social Capital 50 Introduction: President Pastrana's Mission 50 Basic Principles for a National Strategy for Peace and Development 51 Components of a National Strategy for Peace and Development 52 Appendix 2.1 Various Disciplinary Perspectives on Violence Causality 62 Appendix 2.2 Summary: Main Social Agents Involved in Political Violence in Colombia, Appendix 2.3 Interventions to Reduce Economic Violence in Colombia 66 Appendix 2.4 Interventions to Reduce Social Violence in Columbia 68 References and Bibliography 70 Chapter 3 The Hidden Costs of Peace in Colombia 78 Cecilia Lopez Montano Arturo Garcia Durdn Introduction 78 Historical Background 80 Central America's Experience 80 Colombia's Experience 81 Three Great Myths 85 The Myth of a Political Democracy 86 The Myth of a Sound Economy 88 The Myth of Poverty as a Main Cause of Violence 90 Peace Policies 91 About the Peace Process 91

4 CONTENTS Crucial Stages in a Peace Process 91 First Stage: Consensus Building 92 Second Stage: Structural Changes 98 Third Stage: Process Sustainability 106 The Costs of War and Peace: Background and Perspectives 107 The Costs of Armed Conflict 108 The Costs of Peace 109 Economic Background of Peace Accords in Central America and Colombia 112 Possible Economic Consequences of a Peace Accord in Colombia 115 Final Reflections on War and Peace 117 Appendix 3.1 Peace Accords in Central America 120 Appendix 3.2 Peace Accords in Colombia 135 Appendix 3.3 Proposals by the Actors in the Conflict in Colombia 147 References and Bibliography 155 Chapter 4 Toward an Architecture for Sustainable Peace and Development: Lessons from the World Bank's Experience 159 Nat Colletta Markus Kostner Patricia Cleves Johanna Mendelson Prologue: A Regional Perspective and a Conceptual Framework 159 A Conceptual Framework 161 Making Peace 163 Before the Guns Fall Silent 163 Peace as a Multifaceted Process 165 International Support for National Processes 167 Economics of Peacemaking 168 Appropriating Peace 170 Participation of Civil Society 170 The Empowerment of Civil Society and Decentralization 172 Capacity Building 173 Supporting Peace 174 A Framework for Transition Interventions 175 Principles for International Cooperation 177 Financing Reconstruction 178 Sustaining Peace 179 Toward Inclusive Reconstruction and Development 180 Private Sector Development and Employment Generation 182 Reintegration of Displaced Persons 186 Demining and Disarmament 188

5 COLOMBIA: ESSAYS ON CONFLICT, PEACE, AND DEVELOPMENT Demobilization and Reintegration of Former Soldiers 189 Promoting Justice and Reconciliation 190 Conclusions 192 References and Bibliography 193