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Development aid can contribute to social cohesion after civil war

Macartan was telling me about this article by James Fearon, Jeremy Weinstein, and himself, which begins as follows:

Civil war is very common in the developing world, with harmful welfare effects when it occurs. Many fear that the devastation wrought by violent conflict destroys social capital, impedes economic development and leads to the recurrence of violence. In response, donors are injecting large amounts of aid into post-conflict countries. A significant share of this assistance is spent on “community-driven reconstruction” programs, which support the establishment of new local institutions in order to promote social reconciliation. Whether this assistance has this effect is, however, largely unknown. Can brief, foreign-funded efforts to build local institutions in fact have positive effects on local patterns of cooperation? We address this question using a randomized field experiment . . .

The answer is yes:

The outcome we examine is the amount of funding a community raises for a collective project through anonymous play in a public goods game. Our findings suggest that the community-driven reconstruction program improved community cohesion . . . Although levels of social cooperation were high across all villages in our sample, 71% of households contributed the maximum amount in treatment communities, while 62% contributed the maximum in control communities. For total payouts, which averaged about $333, treatment communities received 6.5% more on average for the community-selected public good.

And:

This effect is equivalent in magnitude to our estimate of the impact on individual contributions of quadrupling the social rate of return on a private investment.

Important stuff. No graphs, but ya gotta start somewhere…