Peace is good for business – entrepreneurship and violent conflict in Africa

By Tilman Brück, Wim Naudé and Philip Verwimp

Arms flows to sub-Saharan Africa (excluding South Africa) are small, at only 1.5 % of the total volume of global arms transfer according to the most recent figures from Stockholm International Peace Research Institute (SIPRI). Yet even small amounts of arms have a significant impact on stability and security in the region, which in turn has wide implications for development and entrepreneurship.

Still, the details of how violent conflict has an impact, especially on small businesses, are far from being understood. One reason is that any theoretical models naturally assume a state of peace. Another reason is that, within economics, there are still no suitable theories about the causes and consequences of conflict, which is compounded by the difficulty of collecting data in conflict-affected areas, the dominance of macro-level approaches in political science, and the disproportionate concern in the aid community on the impact of violent conflict on multinational enterprises.

The Need for Industrialization and Industrial Policy
Conflict is most often a characteristic, or defining feature of states that have been described as ‘fragile’ states. Fragile states are amongst the poorest, and lack authority, legitimacy and capacity to promote their citizens’ wellbeing – often due to violent conflict but also suffering from violent conflict. Given the widespread occurrence of violent conflicts in Africa, the rising concern about fragile states and their repercussions for global development, the lack of research on the emergence of, and challenges to entrepreneurship and small businesses during violent conflict is a significant lacuna.

Concepts and Definitions
Violent Conflict
Violent conflict refers to the systematic use of violence by armed groups to reach political objectives. The word systematic is important as it indicates that we are focusing here on violent conflict that goes beyond its association with crime, although protracted civil conflicts are accompanied by the rise and spread of organized crime.


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