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sometimes considered a luxury that poor countries cannot afford in the light of more pressing needs such as feeding the hungry or providing basic health care (Olsen, Payne & Reiter 2010:63). The costs involved for poor countries in establishing the rule of law almost inevitably lead to the involvement of international third parties in the process. Efforts to establish rule of law in conflict and post-conflict societies focus primarily on creating a secure environment for the entire population and on establishing the basis for long-term development. These efforts include creating/strengthening the national justice system and related institutions; training judges, lawyers, and police;

disarming militias, restoration of order and protection of human rights (Gowlland-Debbas & Pergantis 2009:322).

By its focus on security, rule of law efforts function as a bridge between the political and security aspects of statebuilding as an approach to peacebuilding where SSR, human rights and human security are main features. As was noted by the Secretary-General in a UN report on SSR

Ensuring international peace and security remains a daunting challenge for the United Nations. Despite efforts over the past 60 years, conflict and violence continue to pose a threat to Member States and peoples; freedom from fear and want remain elusive for many. Accordingly, the United Nations continues to search for effective responses to address insecurity based on its Charter. Two related central themes have emerged. The first is that security, human rights and development are interdependent and mutually reinforcing conditions for sustainable peace. The second is the recognition that these fundamental elements can be achieved only within a broad framework of the rule of law. (UN 2008:3)

Enhancing the capacity and legitimacy of various national institutions is therefore a crucial aspect of SSR.

goes back to President Woodrow Wilson’s foreign policy after World War I and further back to liberal philosophers such as Adam Smith (1776/1904) and Immanuel Kant (1795/2010). Smith (1776/1904:preface) stated that

Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.

In a similar way, Kant (1795/2010:27) argued idealistically in Perpetual Peace that “[t]he commercial spirit cannot co-exist with war, and sooner or later it takes possession of every nation.” Historically, and even until recently, economic liberalism has generally not emphasized the importance of the state, although it was well understood among classical liberal philosophers that successful market economies presupposed the rule of law (Paris 2004a:201). This has changed somewhat over the last two decades since it became increasingly clear that a strong state with strong institutions was in fact needed to counter some of the destabilizing factors in conflict and post-conflict societies, not least the liberal economic policies themselves (Robinson 2007:12). The rapid liberalization and marketization that took place during the 1980s and 1990s led to a widespread realization that liberal economic policies were not, as Paris (2004a:ix) puts it, a “miracle cure” for conflict and post-conflict societies, which in turn led to what David Chandler (2007a:51) calls the “rediscovery of the state”. The result of this realization was a move towards a greater emphasis, both among academics and practitioners, of the need for strong institutions and good governance.

3.7.1 Liberalization and Marketization

In the economic dimension of statebuilding as an approach to peacebuilding, liberalization involves marketization, which means the development of a viable market economy where private investors, producers and consumers can freely pursue their economic self-interest with little government intrusion (Belloni 2007:101). The global shift in the 1980s and 1990s towards liberal democracy that took place along with liberal market-oriented reforms became known as the “Washington Consensus”. The set of policies the Washington Consensus advocated can be summarized under the headings of stabilization, liberalization and opening up (Williamson & Haggard 1994:529). While these policies brought the latter two: liberalization and the

opening up of economies, stabilization proved to be much harder to achieve.

In some cases, such as in Namibia and Mozambique, the transition toward liberalization and marketization was, by and large, successful, and stabilization was achieved. The same is true for the ten states in Central and Eastern Europe that joined the EU between 2004 and 2007. In various academic literatures, the EU is widely credited for having decisively contributed to stabilizing the transition toward political and economic liberalization in these countries (See, for example, Paris 2004a:26, Keukeleire & MacNaughtan 2008:256, Moravcsik 2003:85).

In many other countries, however, the same liberal economic policies did not bring about stabilization. Instead, these policies contributed to destabilization by exacerbating social tensions and increasing intra-group rivalry; in some cases reproducing the very same conditions that had historically led to violence in these countries. In Angola, Rwanda, Liberia, the former Yugoslavia, Nicaragua, El Salvador, Guatemala and elsewhere, liberal economic policies increased competition and inequality, which in turn contributed to destabilization and an increased likelihood of renewed violence, not least in the form of criminality (Paris 2004a:6, Belloni 2007:101). In his influential book At War’s End: Building Peace after Civil Conflict, Paris (2004a:7) argued that “Institutionalization before Liberalization” was needed in order to counter the destabilizing effects of liberal reforms. While other scholars took issue with some of Paris’s other arguments, few seemed to dispute the importance of building strong institutions in conflict and post-conflict societies. Paris’s (2004a:7) strategy sought to minimize the destabilizing effects of liberal reforms by delaying the introduction of democratic and market-oriented reforms until rudimentary political institutions had been established. As Ho-Won Jeong (2005:11) correctly points out, Paris and those who agree with him do not reject the transformation of war-torn states into liberal market democracies, but they do have reservations about the application strategies. The core of Paris’s (2004a:7) argument was that a more controlled and gradual approach to liberalization was needed combined with the immediate building of governmental institutions.

Again, the special circumstances in the Palestinian territories with statebuilding under occupation, makes it a special case. While some forms of liberalization and marketization have taken place, the Israeli occupation still puts heavy constraints on both imports and exports and other kinds of economic activity, which means that the Palestinian territories are not a

typical case of liberalization and marketization. In addition, huge inflows of donor money have also contributed to prevent the kind of destabilizing effects resulting from liberal market-oriented reforms that have been common elsewhere in conflict and post-conflict societies.

3.7.2 Good governance

The term good governance emerged in the 1980s and 1990s in the development literature in response partly to the problems associated with implementing liberal economic reforms in developing countries and partly as a strategy to absorb foreign aid and translate it effectively into development (Kahler 2009:287, Bhuta 2008:524). As has been mentioned earlier, in many parts of the world, democratization and liberalization had not yielded the expected positive results, instead resulting in ineffective semi-authoritarian regimes led by notoriously corrupt officials (Mani & Krause 2009:107).

Consequently, the basic idea behind good governance is to replace bad governance by erasing some of the things that had made states weak and inefficient in the past, such as predatory behavior by rulers, unaccountability and unconditional aid by international donors (Robinson 2007:11, Mani &

Krause 2009:107). Good governance therefore came to mean processes and institutions producing results that meet the needs of society, while making the best use of the resources at hand (UNESCAP: What is good governance?).

While the World Bank and other international actors claim that they do not seek to impose any particular form of government on developing states, good governance is strongly underpinned by liberal political and economic principles such as the rule of law, transparency, accountability, equity and inclusiveness (Paris 2004a:30, UNESCAP: What is good governance?). As Neil Robinson (2007:12) has noted, the liberal economic policies promoted by the international actors have not changed. What has changed is that they are now being legitimized through the concept of good governance, which leads Robinson to argue that this is a new form of the Washington consensus (liberal economic reforms + good governance). In the Palestinian theatre, good governance is of particular importance since the Palestinian Authority has been the recipient of enormous sums of donor money, particularly from the EU, which in turn has led to an additional set of problems, such as unhealthy dependencies, corruption, patronage and the like.

3.7.3 NGO financing

Related to the problems mentioned above about good governance, the financing by third parties of NGOs, international and local, is also a central part of the statebuilding process. As with many of the other key concepts mentioned in this chapter, NGOs and notions of civil society are, with a few exceptions, Western concepts, which again raise the usual question of applicability outside the West. Basically all the main international actors involved in statebuilding emphasize the importance of a vibrant NGO community and an active civil society (EEAS: The EU’s work with NGOs, USAID 2009, UN and Civil Society).

As NGOs can fill many roles in society, so can the financing of them:

from reconciliation and peace, to gender issues and minority rights, to democracy promotions and so on. NGOs experienced a general upswing from the mid-1980 and onwards, which was connected with the rise of liberal notions of peacebuilding and development, both of which at the time encouraged skepticism towards the state and favored other private alternatives (Spurk 2010:15). There seems to be a general consensus in various relevant literatures on peacebuilding, statebuilding as an approach to peacebuilding, civil society, development etc., that the financing of NGOs can both contribute to many praiseworthy objectives, such as reconciliation and peace, and be detrimental, either to the very same objectives, or to others (See, for example, Spurk 2010:10, Paffenholz 2010:59, Richmond & Franks 2009:13). The main problems with the financing of NGOs seem to be that donor money can corrupt local societies and create unhealthy dependencies;

that many NGOs are not accountable and transparent; that NGOs tend to be elitist, have little impact and weak membership base; that the financing of NGOs can lead to competition, rivalry and even new conflicts in the affected societies (See, for example, Richmond & Franks 2009:73, Fischer 2007:17, Paffenholz 2010:59, Pickering 2007:125).

Finally, there is a strong argument in the literature that neither the financing of NGOs nor aid in general can replace political action (Le More 2008:84, Paffenholz 2010:430).