Economic Impact of Peacekeeping

March 01, 2006

FOPO co-director William Durch is the co-author of Economic Impact of Peacekeeping, a ground-breaking and detailed study of peacekeeping operations’ effects on the war-torn economies into which they deploy.  The first multi-mission study of its kind and the first effort to quantify the economic impact of UN operations since 1993, the study was recently released by the Peacekeeping Best Practices Section of the UN Department of Peacekeeping Operations. Durch worked in collaboration with Scott Gilmore, executive director of the Peace Dividend Trust, Ottawa, which managed the Economic Impact of Peacekeeping Project, and economist Michael Carnahan, based in Canberra, Australia.

In addition to his work as co-author, Dr. Durch served as political adviser to the project and participated in project fieldwork in Sierra Leone in July 2005.  The project aimed to generate new policies and practical reform measures that would minimize negative economic effects on UN peacekeeping mission areas, yet better utilized mission spending to help jump-start post-war economic growth. The project began in January 2005 and undertook fieldwork in one former and nine current missions.

Through 400 interviews in the field and at UN headquarters, plus surveys of mission staff and analysis of operational spending, staffing and macroeconomic data from each mission area studied, the project has produced the first quantitative analysis of the economic impact of UN peace operations. 

Only about 10 percent of the budget of a UN peacekeeping operation lands in the mission area, on average.  The rest pays global vendors, pays international staff salaries, and reimburses states for the cost of troops and police. Of the 10 percent spent locally, on average about half comes from spending of international staff per diems on housing, food, and incidentals; one quarter from the mission’s direct procurement of local goods and services; and one quarter from salaries of local staff hired directly by the mission. The two tables below illustrate this spending breakdown.

The report’s thirty-seven recommendations built on the ideas of UN staff who have grappled with the problem of economic impact first-hand and in some cases developed innovative mechanisms to enhance that impact. They address three broad themes:

• First, the need for greater consciousness within missions of the potential economic impact of every policy decision and of the relationship between economic recovery and other mission objectives.
• Second, the need to maximize local procurement, consistent with quality and the guiding principle of value for money.
• Third, in order to avoid serious distortions in local labor markets, the need to better adapt UN operating principles to the war-torn economies where peacekeepers deploy.

For additional information on the project, including previous reports, please visit the Peace Dividend Trust website or the DPKO Best Practices Section homepage.