Financing peace : Examining the effects of economic decentralization within territorial power sharing arrangements

Abstract: The empirical evidence and the academic literature point to the opposed directions on the capability of the territorial arrangements to extenuate conflict in ethnically divided and civil war-worn countries. Little is known about the diverse capacities of the territorial power sharing arrangements in diminishing violence in the post-conflict societies. Therefore, this thesis aims to contribute to the field through studying the conditions under which territorial power sharing arrangements reduce violence in the post-conflict settings. I argue that a resumption of violence is less likely following territorial power sharing arrangements in cases where a relatively  high level of economic decentralization is provided for a subnational entity, as it allows the rebel groups to sustain their support base among key constituencies. To test the theoretical argument, a structured, focused comparison of territorial power sharing arrangements in Aceh province of Indonesia and Mindanao province of the Philippines is conducted. The empirical findings give support to the hypothesis in the expected direction. Aceh, where the resumption of violence did not occur, also was enjoying a relatively higher level of economic decentralization. While in ARMM, where the violence resumed after five years following the peace agreement, economic decentralization was relatively low. Nevertheless, the extended analysis reveals additional factors. Transformation of the rebel organization into the political parties and inclusive peace agreements potentially may have impact on the territorial power sharing arrangements’ capability to contain violence in the post conflict environments.