Buying Peace: The Mirage of Demobilizing Rebels

In 2009, hostilities were brought to an end in Burundi when the FNL rebel group laid down weapons. In exchange for peace, ex-rebels benefited from a disarmament, demobilization and reintegration (DDR) program to finance their return to civilian life. A few years earlier, another rebel group (CNDD-FDD) had gone through the same program. In this paper, we assess the impact of this complex program from a theoretical and an empirical viewpoint. First, we develop an agricultural model in order to predict the impact of demobilization cash transfers on beneficiary and non-beneficiary households. Then, we test the theoretical model by using a household panel dataset collected in rural Burundi. We find that, in the short run, the cash payments received by ex-combatants had a positive direct impact on purchases and investments of beneficiaries, as well as an indirect positive impact on non-beneficiaries. We also find that the direct and indirect impacts on purchases vanish in the long run. These results suggest that reinsertion grants may favour the acceptation of ex-combatants in their local communities in the short run, but are most likely not sufficient for peace to hold. More generally, it emphasizes the importance of considering spillovers in the evaluation of development programs.