‘The Cost of Talking Peace’: New research report highlights need to strengthen markets for funding peace negotiations

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09/24/2020 10:18

‘The Cost of Talking Peace’: New research report highlights need to strengthen markets for funding peace negotiations

Myroslava Purska Berlin Office
ISDC - International Security and Development Center

    ‘The Cost of Talking Peace’ research report officially launches today. This political and economic analysis of the financing of peace processes is the product of a collaboration between ISDC and swisspeace. The report analyses under-researched aspects of the financing of peace processes. The report finds that funding, while perceived as technical, is very much political and that this has implications for successful peace negotiation and mediation processes. The team found that funding might enable or disable successful processes, and propose strategies that practitioners may use to minimise the negative impact and maximise the positive impact of funding on peace negotiations.


    A German-Swiss research team today releases a new research report on the politics and economics of funding peace negotiations.

    The researchers from the research institutes ISDC - International Security and Development Center in Berlin and swisspeace in Bern highlight that funding aspects are a key issue in peace negotiation and mediation processes. Yet, their role and implications are insufficiently understood and could be an obstacle to achieve peace.

    Professor Tilman Brück, Founder and Director of ISDC and a co-author of the report, comments: “Making peace is usually the better economic policy for society as a whole than making war. But making peace also costs money - just like visiting a doctor or buying medicine costs money. How peace negotiations are paid for, however, is not well understood or structured. We need clearer rules on how to pay for peace negotiations so that more peace can be made.”


    Funding for peace negotiations is often treated as a purely technical issue. However, on closer inspection, funding is fundamentally political and, as such, has a profound impact on the architecture and the dynamics of peace negotiations.

    For a functioning peace negotiation process, the funding requests of the negotiation stakeholders, defined as the negotiating parties and the mediator, need to be matched with a limited pool of external funds made available by donors. The research conceptualizes this resource allocation dynamic as a matching game that consists of a series of interactions (or negotiations) with the intention of matching the existing funding requests with available external funds. The negotiation architecture that is finally applied in a given process thus results, at least to some extent, from a negotiation between the participating negotiation stakeholders and the donors about the funds that are available and what they are available for.

    When it comes to the overall funding market for peace negotiations, the research team found several features that define it:
    a) how the process is funded comes about as a component of the negotiations that take place and, thus, is a part of the overall negotiation architecture,
    b) the market has grown more professionalized in recent years, while the funding available has become more voluminous and diversified, and
    c) funding is increasingly “projectized”. That is, negotiations are no longer viewed as a single “unit” but rather a series of interconnected “projects”, each of which might have its own funding sources and budget lines.

    The financing of peace negotiations is beset by a series of market failures that can undermine entire processes. While few, if any, processes have failed due to market failures, it is not possible to guarantee that some processes that could have taken place didn’t even begin because of such failures. However, even in successful processes, these failures constitute obstacles to well-functioning negotiations, contribute to increased duration of the processes, and increase their costs. To overcome the existing market failures, actors have to deal more adequately with information asymmetries and misaligned incentives, as well as with collective action problems.

    The research team found eight funding-related issues that underpin the market and can influence the efficient functioning of peace negotiations in a positive or negative way. These key issues are:

    –– Distribution: While some negotiation processes – as well as specific phases or components of these processes – are overfunded, others do not receive enough support.
    –– Responsiveness: Funds are often needed more rapidly than donors can move.
    –– Competition and coordination: Donors’ failure to coordinate with each other can lead to duplication of efforts and missed opportunities to make use of comparative advantages.
    –– Donor leverage: Donors, at times, use funding to influence the process, for better or worse.
    –– Legal, institutional and administrative constraints: Donors are bound by various constraints, which sometimes are not mutually compatible with the necessities of the negotiation process.
    –– Legitimacy of the funding: If donors (and funds) are not perceived as impartial, the funding mechanism itself, and therefore the whole negotiation process, can be undermined.
    –– Financial incentives: Financial incentives, such as per diems, can play an enabling or disabling role for the conduct of peace negotiations, depending on their design and application.
    –– Trust: Funding can have an important role in building trust between negotiating parties, which can underpin or undermine faith in the entire process.

    To overcome funding challenges, the research came up with several strategies for negotiation stakeholders and donors:
    –– Establishing suitable communication and coordination mechanisms
    –– Diversifying funding sources
    –– Ensuring a clear division of roles
    –– Planning ahead
    –– Designing tailor-made funding modalities
    –– Using dedicated administrative capacities
    –– Setting the incentives right
    –– Establishing adequate funding instruments and strategic partnerships

    The study was funded by the Swiss Foreign Ministry.

    Contact for scientific information:

    Professor Tilman Brück, ISDC, brueck@isdc.org, +49-151-1117 5462

    Original publication:

    The main report: Brück, T., C. von Burg, L. Ellmanns, N. T. N. Ferguson, P. Lustenberger and A. Raffoul (2020). "The Cost of Talking Peace: A Political and Economic Analysis of Financing Peace Negotiation and Mediation Processes", swisspeace and ISDC, September.

    The policy brief: Brück, T., C. von Burg, L. Ellmanns, N. T. N. Ferguson, P. Lustenberger and A. Raffoul (2020). "The Cost of Talking Peace: Financing Peace Negotiation and Mediation Processes", swisspeace Policy Brief, Nr. 9, September.

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    Economics / business administration, Law, Politics, Social studies
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    Research projects, Research results

    Fund Allocation Dynamics

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