JOBS NOTES Issue No. 11 SUPPORTING JOBS IN FRAGILITY, CONFLICT, AND VIOLENCE (FCV) SITUATIONS KEY MESSAGES ¬ Better jobs outcomes in situations of fragility, ¬ In post-conflict recovery, business support must conflict, and violence (FCV) are critical to ending include doing more to revive markets. poverty. ¬ Labor-intensive public works (LIPW) deliver ¬ Because jobs and stability are linked, public important emergency support in FCV situations, investment in jobs support is particularly justified but expectations must be reasonable. in FCV. ¬ Traditional “skills only” training is not very ¬ Jobs support must start with a realistic view of the successful and faces higher barriers in FCV nature of jobs and businesses in low-income, FCV contexts. Combining skills-only training with other contexts: most workers make a living from a support may help trainees establish themselves, basket of low-productivity activities rather than a but projects must be wary of cost effectiveness. single full-time job, casual business activities tend ¬ Psycho-social support for jobs outcomes, shown to account for far more jobs than traditional firms, to be successful in small-scale FCV contexts, and job seekers face considerable market and should be tested at larger scale. societal hurdles. ¬ Evidence provides useful guidance to jobs support ¬ Policy makers in FCV countries should apply a in FCV contexts. But large knowledge gaps remain “jobs lens” in designing macro-fiscal policy and on how to adapt project designs for FCV situations infrastructure investments. and how and if jobs support promotes stability. ¬ Cash grants to individuals have a strong track record in raising incomes in FCV and beyond. This Jobs Solutions Note identifies practical solutions for development practitioners and policymakers to design and implement policies and programs that improve jobs outcomes for in FCV contexts. Based on curated knowledge and evidence for a specific topic and relevant to jobs, the Jobs Solutions Notes are not intended to be exhaustive; they provide key lessons, solutions and approaches synthesized from the experiences of the World Bank Group and partners. This Note draws in part on the Integrated Framework for Jobs in Fragile and Conflict Situations and Generating employment in poor and fragile states: Evidence from labor market and entrepreneurship programs. Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 MOTIVATION: WHAT IS THE PROBLEM? An increasing number of the world’s poor live in countries affected by fragility, conflict, and violence (FCV). By 2030, at least 46 percent of the extreme poor will live in areas affected by FCV. Providing support in FCV environments is thus crucial to ending poverty and spreading prosperity. Conflict tends to persist and spread instability beyond national borders. FCV can mute growth prospects often for many years, causing FCV countries to spiral downward in a cycle of conflict that is hard to break. Nor does instability stop at national borders: Photo credit: World Bank FCV-caused displacement is at its highest level since the 2nd World War. Non-traditional combatant groups cross borders to elude adversaries, and pandemic entrenched in low-income countries,5 which account health risks often begin in FCV countries, which lack for five of every six people living under FCV.6 Here, resources to prevent or contain them.1 there is little outright unemployment, given the dire consequences of not working. It follows that—rather Policy makers worldwide view job opportunities than increasing the total number of jobs—the key as key for stability. Better economic opportunity challenge is improving productivity and earnings is strongly linked to country and regional stability. through better jobs. Most people work a “portfolio” Studies have also linked better jobs with stronger or “basket” of income-generating activities rather community involvement, higher tolerance toward than single, full-time, year-round jobs.7 Activities are other ethnic groups, and greater willingness to pay largely in agriculture and the food system, commerce, for public goods, while absence of opportunities has or personal services, and few are very productive. Only sometimes been associated with radicalization of a lucky few are in wage employment, and formal jobs young people. Because of these linkages, support to are largely limited to the public sector. jobs in FCV contexts benefits not only the workers who receive support, but also society at large; such “social In FCV countries, business is not a world of externalities”2 make a clear case for use of public firms distinct from self-employment but rather a resources to promote jobs in FCV-affected countries. continuum of activities from very casual to more permanent. Few businesses in fragility grow into large The scale of the jobs challenge in FCV-affected employers. The high-risk, high-cost, low-demand FCV countries is imposing. Poor jobs outcomes in FCV environment poses steep barriers to investment and situations coincide with high population growth. expansion. Businesses that “show up on the radar” The labor force in Mali, for instance, is growing at of predatory groups face extortion. It is therefore an estimated 230,000 per year, nearly as many as worth paying attention to the full range of business the entire number of current total formal sector jobs activities, from casual market-linked activities— (278,000). Over four years, the Malian workforce will such as processing fruit, tea shops, or mechanical grow by equal the number of total wage workers repairs—to informal household businesses, all of currently in the economy (941,000).3 In Iraq, the labor which contribute significantly to employment. For force is growing by 344,000 workers yearly, while instance, in Mali, household business activities employ 2.5 million workers (16 percent) were unemployed 260,000 outside owners’ households, compared to in 2016, including 36 percent of workers under 25 29,000 employees in formal firms covered in the 2016 years of age.4 Enterprise Survey.8 Most workers in FCV-affected, low-income Creating better jobs is particularly challenging in countries perform a set of part-time, FCV contexts. Job challenges in FCV-situations are low-productivity activities. Most violence remains distinct from those elsewhere due to: 2 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 •  Government and market failures: Government the 18th IDA replenishment, the World Bank’s fund and market failures are both more pronounced— for its poorest members (IDA 18, active from 2017 to for instance, poor access to infrastructure and to 2020) has reduced the gap: WB lending per capita finance. in the average FCV country is today only 19 percent •  Direct impact of conflict: Conflict causes suffering lower than in the average stable country.9 and loss of lives, damages human capital, assets In FCV, jobs-related projects supported by and infrastructure, and depletes institutional the World Bank Group (WBG) often focus on capacity. FCV displaces people, causes trauma, emergency response. In FCV-affected states, the makes workers avoid roads and fields for fear for WBG’s jobs support lending emphasizes emergency their lives, and upends trusted personal networks responses. Three-fifths of all FCV jobs support that connect market participants. comes through WBG-supported projects such as •  Distortions: Economies in FCV are distorted due to social safety nets and youth employment support; the war economy, predatory state practices, or even disarmament, demobilization, and reintegration a large humanitarian presence. Distortions affect (DDR) and community-driven development (CDD); prices and incentives, and can reduce investment agriculture productivity and food security; and access and put domestic producers at a disadvantage in to training.10 In contrast, the share of jobs lending competing with imports. led by teams that manage budget support projects •  Perceptions and attitudes: People are shaped is much lower in FCV (seven percent) than in more by the experience of conflict, and altered views stable environments, where these groups account for and behaviors can affect jobs outcomes as well as 20 percent of all jobs lending.11 stability. Since 2016, the WBG is providing additional WHAT ARE WE DOING? lending support to mitigate fragility risk and to countries hosting forcibly-displaced populations. The World Bank has committed an estimated Under IDA 18, the WBG increased lending specifically US$6.6bn in lending to 70 projects specifically to support jobs in FCV-affected countries. IDA’s Private supporting job creation in 23 fragile environments. Sector Window has provided additional support to To end poverty, the World Bank must help improve private firms in fragile countries to catalyze investment. lives in FCV-affected countries. Roughly one in four Countries affected by forced displacement can draw World Bank jobs projects officially focus on FCV, but upon the IDA Regional Sub-Window for Refugees this understates the WBG’s support in important ways: and Host Communities in Sub-Saharan Africa (SSA). a. The data relate only to official “fragile and conflict Finally, an IDA Exceptional FCV Risk Mitigation Regime situations” and do not include support under made additional resources available to Guinea, Nepal, forced displacement and FCV risk-mitigation Niger, and Tajikistan. initiatives. The WBG’s Jobs Multi-Donor Trust Fund (MDTF) b. The data include only International Development supports knowledge creation for jobs in FCV. The Association (IDA), International Bank for MDTF has invested to advance knowledge through Reconstruction and Development (IBRD), and a dedicated FCV lending window, focusing on four trust fund support, and do not count International priorities: Finance Corporation (IFC) investments. a. Jobs Strategy Notes seek to outline options for c. The data is based on projects that explicitly aim supporting jobs at scale. Notes are available for to support jobs, but many other initiatives also Iraq, Niger, and the West Bank and Gaza, with affect jobs outcomes. more underway. Jobs-related lending per capita in FCV countries b. Impact evaluations identify ways to modify remains below more stable environments, but projects to give short-term jobs support and lay the gap has shrunk. In 2016, jobs lending per capita the groundwork for more lasting benefits. in FCV was 75 percent lower in the average FCV c. Project support focuses on working with the situation than in more stable environments. However, private sector to deliver better jobs results. 3 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 d. New data collection initiatives seek to understand to understand the drivers of low demand: if low urban jobs challenges in FCV, including through cell households’ purchasing power of is the cause, the best phone data on firms in Afghanistan and surveys kind of support differs then when the main challenge of informal business activities in Niger. is that villagers are unable to travel to markets because of the cost of transport and danger on the road. Partnerships with the United Nations (UN) and civil society organizations (CSOs) help Macro-fiscal policy and investments in deliver jobs support in the most challenging infrastructure FCV environments. The WBG works directly with borrower governments to implement Bank-supported This Solutions Note briefly summarizes macro- projects. This approach is designed to build client economic management issues important to government capacity, which is very important in jobs and stability. There is a large body of work on FCV contexts. But the approach also makes it hard macro-economic management in FCV. This Note only for the WBG to stay engaged in the most difficult briefly addresses considerations relevant to supporting FCV environments, where civil servants cannot jobs.12 Macro-economic policy makers in FCV-affected easily access certain regions or manage funds countries face hard challenges with little capacity, transparently. Therefore, the WBG has explored new and they must tread a fine line between changes ways to deliver projects through third parties. For that promote job recovery and stability in the short instance, in South Sudan, the Food and Agricultural run, and setting sustainable policies for medium to Organization (FAO) has implemented WBG-funded long-term growth. project activities to help farmers resume production under an emergency food and nutrition project. In Policy makers in FCV contexts need to apply a Mali, the United Nations Office for Project Services “jobs lens” to understand trade-offs in macro- (UNOPS) rehabilitates infrastructure in contested fiscal policy. In FCV environments, job-constraining areas through public works. policies—for instance, misuse of resource revenue or trade restrictions—can be entrenched because they are part of the balance of power between political WHAT WORKS? actors. Therefore, technical policy advice alone can seldom move such obstacles. Candid analysis This section summarizes insights from research of the cost the status quo imposes on jobs—and and experience on effective ways to support jobs hence, stability—can help inform policy reforms and in FCV-affected contexts by: build consensus among competing political actors. a. Laying out key ways macro-fiscal policy and Conversely, knee-jerk macro-fiscal reforms can also infrastructure can support jobs in FCV. have destabilizing consequences. For instance, cuts b. Summarizing what we know about supporting in public or state-own enterprise (SOE) jobs may jobs outcomes through initiatives with individuals, help balance the budget and reduce patronage and communities, or firms. crowding-out of private businesses; but public and SOE jobs, even in armed services, can shore up jobs c. Reviewing evidence on how jobs support stability. and stability in the short run. A gradual approach While it is worth learning from the success and may make reforms more sustainable, and avoid destabilization that could outweigh gains. failure of different jobs programs in FCV, context always matters. Economies affected by FCV have Avoid known costly mistakes in macro-fiscal shared characteristics, and there are useful lessons policy. Policy makers should be wary of some known on what has worked to support jobs. However, traps that cause significant consequences for jobs, choosing support modalities must always begin including currency overvaluation, monetization of with an assessment of the specific jobs challenge at fiscal deficits, overprotection of non-traded input hand. For instance, this Note argues that jobs support sectors, and poorly targeted trade restrictions. Even in early reconstruction must pay more attention to when the most efficient kinds of reforms cannot reviving market demand for goods and services. In be tackled, there may be ways for gradual policy choosing how to tackle this problem, it will be crucial improvements to promote jobs; for instance, by 4 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 Consider the jobs intensity of infrastructure investments. With the right choices, investment in infrastructure can create construction jobs and induce job creation beyond the project itself. In construction, jobs outcomes differ depending on how capital- intensive the process is, and whether it uses foreign labor. Creation of induced jobs depends on what kind of economic activity the infrastructure supports. A project that builds rural roads can hope for a broad and rapid impact on productivity of traditional job activities. Infrastructure investments can also support capital-intensive industries; for instance, through power, railways, or ports serving mining operations Photo credit: Mohammad Al-Arief / World Bank or a special economic zone (SEZ).14 Such investments may in principle generate foreign exchange and foster new industries. However, in FCV, they must carefully opening small public procurement contracts to SMEs, examine whether they are likely to reach their even if larger contracts go to SOEs, or by allocating at goals—for instance, whether mining revenue is likely least some resource revenue toward job-supporting to be used for development spending, or whether investments. comparative advantage and the business environment Look for a “peace dividend” to tackle big will allow manufacturers to thrive. The right choices constraints to jobs. It is always hard to make progress for jobs and stability are not always obvious, but on key job-limiting policies such as land rights, natural policy makers must take jobs impacts into account in resource revenue management, and energy sector decision making. reform. Success is rare. That said, the end of conflict can represent a window of opportunity when an Working with individuals, communities, important change can be attempted. Despite low and businesses to support jobs capacity, political actors may be more willing and able This section summarizes knowledge about the to address deeply entrenched problems, particularly effectiveness of different types of jobs support when bold action can deliver a “peace dividend” in for communities (“meso-level’) or individuals and the form of meaningful progress on jobs.13 single businesses (“micro-level”).15 Few households Focus on growing businesses rather than adding in FCV contexts have highly productive activities, and business and labor regulations, which are unlikely very few workers hold wage jobs. Projects can make a to be enforced effectively and fairly. Regulations meaningful difference to job quality even if they make can promote private sector investment and hiring, modest improvements that help households increase ensure property rights, and reduce “rent seeking” their productivity or add a new market-linked activity behavior that allows elites to exploit economic to their “jobs portfolio.”16 distortions. But in FCV contexts, very few workers have This Note evaluates the evidence on five different formal jobs affected by regulation, and enforcement of types of support:17 regulations is weak and fraught with power relations. It is important for governments to gradually build capacity a. Cash and other capital-based support to to mobilize domestic finance, but attempts to expand individuals and households (cash transfers, larger the tax base must not stifle informal self-employed grants, in-kind support, and microcredit). and micro business activity essential to many jobs. b. Support, capital-based and other, to small Governments must carefully consider whether the businesses. potential use of funding raised through such fees justify c. Labor-Intensive Public Works (LIPW). their impact on jobs. A more appropriate approach may be to simplify regulations, where possible, and change d. Skills training. regulations that codify rents. e. Psycho-social support. 5 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 Cash and other capital-based support to convincing evidence comes from war-affected areas individuals and households in northern Uganda, where the Women’s Income Generating Support (WINGS) program experimented Cash and other capital-based support has an with US$150 cash grants to individuals in acutely- encouraging track record in FCV. Given constrained affected villages, along with some business training access to credit and high risk in FCV contexts, jobs and help in articulating a business plan. The WINGS support that provides capital to households through program nearly doubled incomes and increased micro cash grants or in-kind—for instance, tools, agriculture business activities.25 Capital transfers also proved inputs, livestock, or community infrastructure—has critical to success in a program to re-integrate former shown success. Households in low-income settings fighters into the workforce in Liberia.26 have high returns to capital,18 but their own savings and family support are virtually the only funding Cash grants have a strong record, but it is source. Many young workers in FCV contexts face a advisable to keep an eye on possible limitations. frustrating wait to start even modest market-linked As is the case with all types of support reviewed here, activities.19 Projects in LICs provide grants ranging jobs effects may be temporary or permanent.27 To our between US$200 and US$1,000, often contingent on knowledge, the Youth Opportunities Program (YOP) a simple business plan for a new income-generating in moderately war-affected areas of Uganda provides activity. Cash may be accompanied by other support the only solid evidence of the long-term impact of any (which raises program cost). Providing capital in cash type of jobs support in FCV. It gave larger cash grants or in-kind can help raise revenue from existing job of about US$400 to groups of young beneficiaries activities or facilitate entry into new activities, and to help them start business activities; the program evidence shows that such support raises revenues, increased incomes, ownership of productive assets, achieves benefits at relatively low cost, and mitigates and hours worked.28 Incomes of beneficiaries were the risk and low take-up besetting microfinance loans.20 higher for at least four years; however, after nine years, those who had not received support had caught Cash transfer programs show similar jobs up in earnings, although their assets remained lower.29 outcome benefits in FCV contexts as in more Secondly,30 capital-based job support must monitor stable environments. Cash transfer programs the possibility that programs could improve labor have been widely studied in stable environments.21 demand for those who do not receive support,31 but In FCV environments, there have been high-quality also expose them to more competition from grantees. evaluations in Afghanistan, DRC, Liberia, Niger, Thirdly, distributing cash in conflict zones can be post-war Uganda, and Yemen.22 Evaluations showed dangerous for program staff as well as beneficiaries, that productivity outcomes improved in line with especially women. (Similar concerns can arise for improvements observed in more stable environments. participants in training programs or public works.) For instance, in the DRC, transfer recipients accrued Programs are evolving solutions, such as asking savings; in Niger, a cash-transfer safety net program beneficiaries to travel to safer urban areas or relying increased participation in savings groups and on mobile payments. But such work-arounds are not ownership of livestock and productive assets, raising perfect, and may be costly.32 agricultural output by some 30 percent for beneficiary compared to non-beneficiary households—an increase Providing in-kind capital is useful in FCV akin to benefits of programs directly targeting environments where agriculture-linked jobs are agricultural productivity.23 key. Jobs linked to the food system play an outsized role in many low-income FCV countries. Agriculture Larger cash grants for income-generating activities projects have long provided capital support, but also have a good track record, including in the few usually not in cash but rather “in-kind.” In non-fragile evaluations in FCV contexts. High-quality impact environments, providing agricultural inputs has a solid evaluations have shown that cash grants can provide track record in raising farm yields and incomes,33 and meaningful job support in more stable environments.24 rural road construction campaigns have increased In the limited FCV-context evidence available, grant employment and incomes.34 programs demonstrate similar success. The most 6 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 Microcredit programs may not work well in high-risk, high-cost FCV contexts. Even in non-fragile environments, microcredit has a modest track record in improving jobs outcomes. 35 Solid evaluations from FCV environments are not available; however, it stands to reason that FCV contexts pose greater obstacles. In particular, borrowing costs, which always impede microcredit uptake, likely present a particular problem in FCV environments because lenders find it difficult to operate and potential borrowers resist taking debt under uncertainty. Support to small businesses Photo credit: Shehzad Noorani / World Bank Subsidized funding and grants have successfully supported businesses. Projects have used capital- based support in stable environments to support environments may prove too unstable for complex business activities outside of agriculture and simple support programs. The South Sudan program rural non-farm activities. Often used modalities include mentioned above discontinued disbursements grant-based business plan competitions, or programs mid-way as fighting reemerged; evaluation showed that offer subsidized funding, such as matching grants, that welfare worsened for those who did not receive guarantees, or interest-free loans. The best evidence expected support. Finally, in many FCV environments, comes from Nigeria’s YouWin! program, which has modern, market-oriented businesses are rare. Recall been highly successful and cost-efficient in creating that in FCV contexts, most businesses are small and jobs with large grants of about US$50,000 on average informal, and boundaries between income-generating per beneficiary.36 YouWin! grantees hired over five activities, household enterprises, and SMEs are fluid. workers, on average, more than comparator businesses. In such cases, business grant projects must carefully examine whether they can create employment for But there is little evidence on the usefulness more than a lucky few. of business support in FCV contexts. Workers in FCV contexts rely on own funds to start and expand Amid market disruption, opportunities to stoke business activities,37 making capital support a plausible demand for goods and services deserve more strategy. But there is little evidence on the usefulness attention. Business support tends to come in the of capital-based programs in fragile environments; form of funding or skills training, but lack of demand existing efforts have been difficult to evaluate38 and is also a problem. While there is little evidence on their show mixed results. A program giving startup grants of effectiveness, FCV environments may present openings US$1,000 in South Sudan reported increased grantee for strategies to stoke aggregate demand and revive business ownership and welfare;39 while a program markets. For instance, humanitarian actors can locally in Yemen improved business performance, but not source goods for distribution, and where there is a employment—perhaps due to conflict resurgence.40 large peacekeeping presence, so can procurement and demand from employees. At the same time, the The FCV environment challenges implementation potential for inflationary pressure from such purchases of business support programs and competitions, needs monitoring, in particular when humanitarian making it important to consider the practicality demand is volatile. DDR initiatives can contribute to of grants and subsidies. It is difficult to local demand for things like tools and inputs,41 and select beneficiaries for large subsidies fairly and cash grant programs may also help raise labor income transparently in places that struggle with elite capture for community members who did not receive grants.42 and corruption. Further, preparation and evaluation Support for agriculture recovery can look to re-engage of business plans requires significant applicant as traders in post-conflict environments by, for instance, well as implementing agency capacity. Some FCV temporarily guaranteeing markets for aggregators or sponsoring input fairs, such as in the World Bank’s 7 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 South Sudan Emergency Food and Nutrition Security and responses to natural disasters. Where markets are project. Local businesses can also benefit from not functioning, and therefore capital-based support inclusion in public procurement bidding, if processes is less warranted, the WBG uses LIPW to support jobs can avoid elite-capture. in some of the most difficult conflict and post-conflict environments, including the CAR, South Sudan, and Labor-Intensive Public Works (LIPW) Yemen. In post-war situations, emergency LIPW may offer the government a way to show that it is working LIPW are widely used to boost short-run and providing tangible support. For instance, the employment in fragile situations, but expectations Londo program in CAR put great effort to reach all for LIPW benefits are typically too high. LIPW parts of the country to communicate the beginning usually offer about 60–80 days of work at just below of country-wide recovery.46 market wages. With low-income country wages of US$3 to US$5 per day, LIPW thus provide about Nonetheless, expectations for what LIPW can US$200 to US$400 overall, close to common cash achieve are often too high and must be managed. transfers or small cash grant programs. The primary It is crucial not to expect more of LIPW than they can policy objective of LIPW is to support vulnerable deliver. Other tools may be needed to revitalize markets, incomes while building or maintaining useful public improve access to income-generating activities, and infrastructure, such as land and environmental encourage attitudes conducive to stability. management, rural roads, schools, health centers, and sanitation. However, implementers may also hope that Skills Training LIPW build lasting skills, and help beneficiaries find permanent employment or start businesses. Some may It is natural to think of training programs for FCV also hope that LIPW directly support stability by “giving environments with a low skills base, but trainees potential fighters something to do,” demonstrating rarely succeed without additional support. Skill the presence of the state, empowering communities levels are low in most FCV-affected countries. In through CDD, or bringing different groups together dangerous and volatile environments, investment in around a work project. skills could lead to more robust results than capital investment: skills outlast conflict disruptions where In FCV, LIPW support incomes and can encourage investment in assets may go to waste; and where savings, but often they do not live up to other workers are displaced, skills travel with them. However, expectations. LIPW are part of social safety nets in the jobs environment in FCV is particularly hostile stable environments (Subbarao et al 2013). Recent to skills-only programs. Young trainees face harsh and ongoing evaluations of LIPW in FCV in the Central circumstances, with little demand for wage workers, African Republic (CAR), Comoros, Côte d’Ivoire, DRC, goods, and services, and with steep barriers to and Sierra Leone show that LIPW can achieve modest, obtaining capital. Even internships and apprenticeships short-term income raising goals.43 In Côte d’Ivoire programs may not overcome these problems. and Sierra Leone, beneficiaries saved and re-invested wages in other income-generating activities, and were Traditional “skills only” training programs do able to cope with shocks without depleting savings or not have a strong record, and tend to be costly. selling assets.44 But other evaluations do not find such Skills training programs take many forms—from basic effects. Evaluations also find only few improvements literacy and numeracy to informal training in farmer on attitudes and behaviors linked to stability.45 field schools, to short business skills courses, formal technical and vocational training, and apprenticeships. LIPW are useful for emergency responses and Successful examples exist, such as a project funded perhaps also where government seeks to make by the WBG’s Adolescent Girls Initiative in Liberia, a fresh start. LIPW are popular to support jobs where which helped participants substantially improve a quick response is called for, or where markets have employment and raise incomes. 47 Regrettably, been severely disrupted. In such settings, LIPW can however, evaluations48 of a wide swath of traditional provide important short-term stability, even if their training programs show that they often fail.49 A longer-term effect is modest. Because of their speed typical problem is that these programs focus solely and relative simplicity, LIPW are important for DDR 8 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 support can foster pro-social attitudes to help stabilization and reduce mental suffering in a variety of contexts. Psychosocial interventions have long been used in high and middle-income countries. In the low-income case of Liberia, cognitive behavioral group therapy programs alongside a small cash grant reduced criminal behavior among high-risk men, encouraged self-control, and improved the self-image of participants.51 Recent studies look at whether brief curricula of psycho-social support in FCV contexts could also improve work outcomes.52 In Togo, psycho- social support training for microenterprise owners increased medium-term profits by nearly one-third, Photo credit: John Hogg / World Bank while a traditional business skills training did not show significant benefits.53 Yet, providing psycho-social support does not always succeed: a program in rural on improving skills while paying little attention to Kenya found that providing psycho-social support enabling beneficiaries to apply them. in combination with a cash transfer did not improve Results may be better when training aligns with benefits compared to the transfer alone.54 labor demand or combines with other support; Psycho-social support programs have shown but such programs must demonstrate cost promise with limited investment, but further effectiveness. Training programs in FCV contexts evidence is needed. Curricula often include only five can try to focus on activities that beneficiaries to twelve sessions, typically delivered by lay counselors can realistically undertake. For instance, in rural (for instance, WHO 2016). Costs per beneficiary low-income contexts, farmer field schools or technical were US$189 and US$756 in the Liberia and Togo training to support new income-generating activities projects—both relatively small, INGO-implemented may make sense. Combine training with grants projects—and US$90 to US$300 in a World Bank or other support might lead to better outcomes. project in Pakistan.55 This is very cost-effective: even However, such efforts should very closely scrutinize in the relatively expensive Togo program, beneficiaries’ cost efficiency. For instance, a review of aid projects in gains exceeded program cost after one year. However, Niger found that the median training project budgeted while there is much experience with mental health an expensive US$2,500 per beneficiary, a multiple support in FCV contexts, their use as jobs support higher than what other types of jobs support cost.50 remains at pilot scale. Thus, much remains to be Psycho-social support learned about results sustainability, what level of support is effective, whether psychosocial support is Early evidence suggests that psycho-social best combined with other types of assistance, and support is useful and should be tested at scale. how to adapt support for specific environments. The mental burden of living in FCV affects jobs outcomes. People living in situations of FCV face many Jobs support effects on stability stressors for prolonged periods, from exposure to Jobs and stability are linked. Policy makers have violence and displacement, to fear and constant worry long pointed to the importance of jobs for peace and about making ends meet. Such stressors negatively stability. Theorists have posed three main hypotheses affect how people perceive their lives, prospects, and of how they relate.56 community, and how they think, plan, interact, and make decisions. Attitudes and mental health, in turn, a. Better jobs raise the opportunity cost of fighting; affect ability to work and make a living. they provide immediate benefits and improve expectations about the future. Psychosocial support can improve economic b. The way people feel about their place in society, outcomes, stabilization, and well-being. Psycho-social and whether they experience grievances, depends 9 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 in part on jobs outcomes; in addition to material benefits, “good” jobs also affect social standing and one’s self-image. c. Finally, jobs bring groups into contact with each other that would otherwise interact little. There is less violence and conflict in countries and regions with economic opportunity, including jobs. A large literature comparing countries and regions shows that better economic opportunities are no panacea, but they do make conflict less likely (for instance, Dube and Vargas 2013; Miguel et al. 2004; Fetzer 2013).57 Studies have carefully sought to establish that opportunity causes stability rather than Photo credit: Yuri Mechitov / World Bank going “hand in hand.”58 •  Will creating more and better jobs address the Little is known about how economic prospects nature of discontent sufficiently to promote link to insurgent and terrorist violence. A study stability? Is discontent related to wanting higher of Afghanistan, Iraq, and the Philippines found no incomes or less precarity? Social standing? A relationship between local unemployment and reduced sense of grievance? And will a successful insurgent violence.59 Studies of reconstruction and project likely change attitudes? For instance, modest CDD projects show a complicated picture: projects can benefits from an LIPW program may build support both mitigate and stoke violence—perhaps because for a fresh start in a new, low-income, post-conflict they reduce grievances but also raise incentives for situation, or they may bide demobilized fighters violent groups to exert dominance.60 Evidence on over a difficult period. But they may do little to terrorist recruitment is limited and mixed: Hamas and affect attitudes in a fragile middle-income country Hezbollah may recruit the better-off, for instance,61 with long-standing job market grievances. but Boko Haram and Al Shabab prey on economic hardship for recruitment.62 •  Will the project reach enough beneficiaries to promote stability? Successful DDR programs, Some encouraging evidence suggests that for instance, can hope to improve stability by giving supporting jobs can help stability. Recently, a substantial share of former fighters a better researchers have asked whether individuals may option. In contrast, programs that aim to discourage be less likely to turn to violence when they have a armed group recruitment or decrease destabilizing chance to work better jobs. Research in Liberia shows discontent must work hard to assess whether they that ex-combatants able to raise incomes through can reach enough beneficiaries to make a significant agricultural training and capital support were less difference. They must also consider whether helping likely to consider joining mercenaries. 63 Another too small a beneficiary group might create new Liberian project demonstrated temporary decreases exclusions and resentments. in crime among high-risk men participating in a cash •  Does project support target the right transfer and counseling program.64 In the Philippines, beneficiaries? Workers whose job outcomes a cash transfer program lowered conflict-related matter most for stability may be neither the poorest incidents and insurgent influence.65 However, some nor those that communities view as most deserving evaluations of LIPW have found limited or no evidence of support; fighters are usually young, able men, for shifts in attitudes or behaviors associated with and urban rioters are usually better educated and stability.66 More evidence is needed. better off than the rural poor. If helping these workers promotes stability, the poor may benefit Jobs support projects must “reality-check” their more than they would from direct support; but ambition to promote stability. To assess whether this represents opportunity costs in terms of not project benefits will meaningfully promote stability, supporting the poorest directly. projects teams must consider: 10 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 WHAT’S NEXT? Test at greater scale the use of psycho-social curricula to complement other jobs programs. A knowledge base exists on what works for The mental burden of living in FCV environments can jobs support in FCV, but large knowledge gaps constrain job performance. Psycho-social support, remain. This Solutions Note summarized knowledge shown to improve outcomes at small scale, should be about supporting jobs in FCV contexts, highlighting tested at larger scale. some clear policy implications. The note has pointed to many important knowledge gaps that limit Study whether better jobs outcomes change effectiveness of support in FCV contexts. The priorities attitudes. We need to better understand whether for future study are highlighted below. successful jobs support in FCV contexts shifts attitudes related to stability, and whether young Confirm whether gains from capital-based beneficiaries view their economic and life prospects support can be sustained in FCV, study how best as being “good enough.” to balance breadth and depth of support, and consider unintended consequences. While difficult Assess how FCV itself determines which support and costly to study, it is vital to learn whether jobs modalities are feasible and effective. More study is benefits can be sustained in volatile FCV contexts. needed on whether and where FCV interferes with jobs A better understanding is also needed of the right support mechanisms. For instance: What is the minimum balance between small cash grants to a large number level of market activity that allows capital-based support of beneficiaries compared to larger business grants to to succeed? Does a short-term LIPW stand a greater a smaller number of beneficiaries. Finally, while there chance to change attitudes after a newly-ended conflict is little evidence of unintended consequences on those than in a long-term fragile situation? who do not receive support, or on price levels, projects must perform due diligence to exclude these risks. Investigate avenues to achieve greater cost effectiveness. With limited resources and immense Explore more ways to stoke demand for goods need for jobs support in FCV contexts, projects need and services. More experimentation is needed on to pay attention to cost effectiveness. It is especially ways to revive demand in FCV-disrupted markets. important to understand which components—cash, Road construction, value chain development, and training, mentoring, infrastructure, among others— other tools that work in more stable settings take produce lasting effects in the many multi-dimensional time to implement and require a modicum of stability jobs support projects with high cost per beneficiary. and market activity. More tools are needed for early recovery after conflict. Approaches worth investigating include leveraging humanitarian purchases or DDR programs, creating incentives for aggregators and input traders to re-engage, and providing procurement access for small businesses. Use of such tools must be based on an understanding of what causes low demand; gaining such insights requires better measuring disruptions in market activity and effects on the chain of business activities. 11 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 KEY REFERENCES A full bibliography of underlying evidence can be found at www.Jobsanddevelopment.org. Blattman, C., and Annan, J. 2016. Can Employment Reduce Lawlessness and Rebellion? A Field Experiment with High- Risk Men In A Fragile State. American Political Science Review, 110(1), 1–17. https://papers.ssrn.com/sol3/papers. cfm?abstract_id=2431293 Blattman, C., and L. Ralston. 2015. Generating employment in poor and fragile states: Evidence from labor market and entrepreneurship programs. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2622220 Campos, F. et al. 2017. “Teaching personal initiative beats traditional training in boosting small business in West Africa.” Science. https://science.sciencemag.org/content/357/6357/1287.full Fetzer, T. 2013. “Can Workfare Programs Moderate Violence? Evidence from India.” Working paper. https://citeseerx.ist.psu. edu/viewdoc/summary?doi=10.1.1.648.502 Fox, L., and Kaul, U. 2018. The Evidence Is In: How Should Youth Employment Programs in Low-Income Countries Be Designed? Background Paper to the 2018 World Development Report. World Bank Policy Research Working Paper, 8500. https:// openknowledge.worldbank.org/handle/10986/29973 Kumar, S. and A. Willman. 2016. “Healing invisible wounds and rebuilding livelihoods: Emerging lessons for combining livelihood and psychosocial support in fragile and conflict-affected settings.” Journal of Public Health Policy. https://link. springer.com/article/10.1057/s41271-016-0009-0 McKenzie, D. 2017. How effective are active labor market policies in developing countries? A critical review of recent evidence. World Bank Research Observer, 32(2), 127–154. https://openknowledge.worldbank.org/handle/10986/26352 Miguel, E., Satyanath, S., and Sergenti, E. 2004. Economic shocks and civil conflict: An instrumental variables approach. Journal of Political Economy. https://www.journals.uchicago.edu/doi/10.1086/421174 Mueller, H., Piemontese, L., and Tapsoba, A. 2017. Recovery from Conflict Lessons of Success. World Bank Policy Research Working Paper, 7970 (February). https://openknowledge.worldbank.org/handle/10986/26137 Mvukiyehe, E. 2018. “What are we learning about the impacts of public works programs on employment and violence? Early findings from ongoing evaluations in fragile states.” http://blogs.worldbank.org/impactevaluations/what-are-we- learning-about-impacts-public-works-programs-employment-and-violence-early-findings. Accessed November 16, 2018. Saraf, P., et al. 2018. Improving mental well-being and productivity of small-medium entrepreneurs in fragile, conflict and violence affected areas: can cognitive behavioral therapy trainings help? The World Bank. https://openknowledge. worldbank.org/handle/10986/29942 United Nations and World Bank. 2018. Pathways for peace: inclusive approaches to preventing violent conflict. https://openknowledge.worldbank.org/handle/10986/28337 World Bank. 2019. Mali: jobs for youth diagnostic brief. World Bank. 2018b. Support to jobs for youth in Niger—a retrospective evaluation of jobs projects 2007–2018. https://openknowledge.worldbank.org/handle/10986/31319 World Bank. 2016. An Integrated Framework for Jobs in Fragile and Conflict Situations. https://openknowledge.worldbank. org/handle/10986/25296 ENDNOTES 1 United Nations and World Bank 2018 2 World Bank 2019b 3 World Bank 2019 4 World Bank 2018 5 United Nations and World Bank 2018 6 Based on population of countries on the World Bank’s Harmonized List of Fragile and Conflict Situations. Four of every five of the countries on the list are low-income. 12 Supporting Jobs In Fragility, Conflict, and Violence (FCV) Situations APRIL 2020 7 Blattman and Ralston 2015 8 World Bank 2019 9 Based on a regression adjustment to account for different country sizes among FCV-affected countries and others. FCV-affected countries are not large; the most populous country on the list of “fragile and conflict situations” is the Democratic Republic of Congo (DRC) with 84 million inhabitants. There are many small FCV island states. 10 Based on lending shares through projects overseen by the following Global Practices: Social Protection and Jobs; Urban, Resilience, and Land; Agriculture and Food; and Education. 11 Lending share of the Macroeconomics, Trade, and Investment group. 12 The summary is based on World Bank, 2016. For a full discussion, see Mueller et al, 2017. 13 Collier 2009 14 Robosio and Wam 2011 15 The review by Blattman and Ralston (2015) remains an excellent summary of the evidence, and is an important source for the following discussion. We focus on evidence that has been, or is likely to be, published in peer-reviewed journals and working paper series. Most but not all of the evidence comes from randomized controlled trials. 16 World Bank 2018b 17 While we try to state clearly what is known about each of these ways of supporting jobs, it is important to keep in mind that, in practice, many projects combine these different elements. For example, LIPW are often combined with skills training. 18 de Mel et al. 2008 19 World Bank 2019; World Bank 2018b 20 Blattman and Ralston 2015; Fox and Kaul 2018 21 For instance, Ralston et al. 2017 22 Aker 2017; Beath et al.,forthcoming; Bertrand et al. 2017; Blattman et al. 2013; Kurdi et al. 2019 23 Calculation based on Mills et al. (2016), detailed in World Bank (2018b). 24 Banerjee et al. 2015 25 Blattman et al. 2013 26 Blattman and Annan 2015 27 Blattman et al. 2013 28 Blattman et al. 2013 29 Blattman et al. 2020 30 Blattman et al. 2013 31 Egger et al. 2019 32 Haushofer and Shapiro 2016 and 2018 33 Hemming et al. 2018 34 Hine et al. 2016 35 Banerjee et al. 2015; Banerjee 2013; Blattman and Ralston 2015 36 McKenzie 2017 37 Weedon and Heaner 2016 38 Campos et al. 2014 39 Muller et al. 2019 40 McKenzie et al. 2017 41 D’Aoust et al. 2018 42 Egger et al. 2019 43 Bertrand et al. 2016; Gazeaud et al. 2019; Mvukiyehe 2018; Rosas and Sabarwal 2016 44 Bertrand et al. 2016; Rosas and Sabarwal 2016 45 Mvukiyehe 2018 13 46 Bance et al. 2014 47 Adoho et al. 2014 48 Blattman and Ralston 2015; Card et al. 2018; Fox and Kaul 2018; Kluve et al. 2019; McKenzie 2017b 49 This is not meant to diminish the intrinsic value of basic or remedial education, for instance in economies such as Iraq or South Sudan, where war and forced displacement have led to widespread loss of schooling. 50 World Bank 2018b; Blattman and Ralston 2015 51 Blattman et al. 2017 52 Blattman and Annan 2015; Betancourt et al. 2014; Kumar and Willman 2016; Saraf et al. 2019 53 Campos et al. 2017 54 Haushofer et al. 2019 55 Saraf et al. 2018 56 Bruck et al. 2016 57 These studies do not usually consider employment, instead looking to more general measures of opportunity, such as economic growth. However, this proxies for job productivity in low-income FCV countries. 58 Cutting-edge work uses either quasi-experiments in which policies changed economic opportunities in different regions as if the impact were due to chance, or an instrumental variables approach built on random shocks in the weather or in terms of trade. 59 Berman et al. 2011 60 Beath et al., forthcoming; Sexton 2016 61 Krueger 2008 62 Mercy Corps 2016; UNDP 2017 63 Blattman and Annan 2015 64 Blattman et al. 2017 65 Crost et al. 2015 66 Mvukiyehe 2018 This Jobs Note was written by Jan von der Goltz (Jobs Group) and Dimitris Mavridis (Social Protection). It draws in part upon the Integrated Framework for Jobs in Fragile and Conflict Situations (World Bank, 2016) and an important earlier review study by Chris Blattman and Laura Ralston (2015). The authors thank Arden Finn, Alvaro Gonzalez, Bernard Harborne, Mattias Lundberg, Joseph Mawejje, Dino Merotto, Nadia Piffaretti, Mira Saidi, Ian Walker, and Melissa Williams for useful discussions. This Note was prepared as part of the Knowledge Program for Jobs: From Jobs Analytics to Support for Jobs Operations (P170399; Siv Tokle, Task Team Leader). It was edited by Aldo Morri. The production and publication of this report has been made possible through a grant from the World Bank’s Jobs Umbrella Multidonor Trust Fund (MDTF), which is supported by the Department for International Development / UK AID, the Governments of Norway, Germany, Austria, the Austrian Development Agency, Italy, and the Swedish International Development Cooperation Agency. All Jobs Group’s publications are available for free and can be accessed through the World Bank or the Jobs and Development Partnership website. Please send all queries or feedback to Jobs Group. 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