v8n1_06 - Reconstruction and Reconciliation: Whats...

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The Whitehead Journal of Diplomacy and International Relations Reconstruction and Reconciliation: What’s Economics Got to Do With It? by Christopher J. Coyne R econstruction and reconciliation are perhaps the most pressing issues of our time. The ongoing conflicts in the Middle East, as well as the many problems generated by weak, failed, and conflict-torn states in other parts of the world, are examples of situations where these topics are relevant. Reconstruction entails rebuilding, and in some cases constructing, both formal and informal institutions in weak, failed, and postwar countries. More specifically, the reconstruction process involves the restoration of physical infrastructure and facilities, minimal social services, and structural reform in the political, economic, social, and security sectors. The end goal is the establishment of liberal democratic institutions, or at least the foundations of such institutions. A liberal democracy refers to political institutions which recognizes, respects, and enforces individual and civil rights, the rule of law, and private property. 1 Typically the reconstruction process involves some array of indigenous citizens and elites as well as exogenous actors, whether they are military occupiers or international policymakers. Reconciliation can be seen as a key aspect of the broader reconstruction process and involves individuals coming to terms with past human and civil rights abuses, oppression, and violations of the rule of law and private property. Any shift from an illiberal to a liberal regime requires some form of reconciliation between enemies. The past violations of human, civil, and property rights by certain individuals must be addressed, but when doing so, a balance of retribution and reconciliation should be established. In the absence of such an ethic of forgiveness and reconciliation, the transition toward a liberal order will be incomplete. As the historical record indicates, policies that aim to advance reconstruction and reconciliation efforts are among the most difficult to implement. 2 For the most part, research regarding the issues of reconstruction and reconciliation have been limited to the disciplines of history, political science, and public policy. My primary aim in this paper is to explore the contribution that the economic way of thinking can make to this existing literature. Specifically, I examine the economic concepts of incentives, constraints, opportunity cost, institutional path dependency, and gains Christopher J. Coyne is an Assistant Professor of Economics at Hampden-Sydney College in Virginia. This paper was written while the author was a summer post-doctoral fellow at the Mercatus Center, Arlington, VA. 69
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COYNE The Whitehead Journal of Diplomacy and International Relations from trade in the context of reconstruction and reconciliation. In order to make this connection, I extend the “lessons learned” from the economics profession’s experience with transition economies and with the provision of monetary aid to developing countries. Additionally, I examine the economic theory of trade as one
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v8n1_06 - Reconstruction and Reconciliation: Whats...

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