The Role of the International Financial Institutions in Fragile and Conflict-Affected Countries

Abstract Starting from Paul Collier’s assumption that ‘economic development may be the true exit strategy for international peacekeeping’, the chapter describes the evolution of the international financial institutions’ engagement with fragile and conflict-affected States (FCSs). On the one hand, the World Bank initially engaged with post-conflict countries by only providing emergency recovery assistance. At the end of the 1990s, however, emergency assistance was completed by a specific policy on development cooperation in conflict-affected States. Nowadays, the IDA plays a central role in providing assistance to FCSs. On the other hand, the IMF has always engaged with post-conflict countries through its traditional instruments (surveillance, staff monitored programs, technical and financial assistance). However, despite recognizing their specific needs and challenges, the Fund did not establish an ad hoc facility to provide financial assistance for FCSs differentiating these countries from other low- or middle-income members States. The study provides an analysis of IFIs policies and activities and advocates that there is an urgent need to intensify cooperation among development partners in FCSs.