Private investment as peacebuilding: Lessons from Colombia

June 2, 2025 | Written by Santiago Sosa and Jessica Maves Braithwaite

Introduction

Peacebuilders – be they states, civil society or international organizations – face tremendous challenges in the aftermath of civil wars: they must implement political, economic and social reforms negotiated in peace agreements; ensure that rebels disarm, demobilize and reintegrate; and reconstruct and develop in order to address the root causes of conflict. Many efforts by both scholars and practitioners have focused on the latter: the importance of (re)development efforts in conflict-affected countries, such that it does not fall into conflict again.

But how could a war-torn society recover if it is, well, war-torn? It would seem to be that a working assumption of both scholars and practitioners is that countries affected by civil war are destroyed to such an extent that they depend on international developmental efforts, both public and private. Indeed, post-conflict plans often seem to be conceived of as rebuilding a society that was too hard hit by conflict to help itself. Therefore, foreign aid and foreign direct investment are commonly the focus of conflict management efforts, and of scholarship on this topic.

To be sure, foreign assistance and investment are important in building peace, but we both belittle post-conflict societies and miss peacebuilding opportunities when we ignore the domestic capabilities of these societies. The local turn in peacebuilding studies is a step in the right direction, as we have learned that both peace and development are built locally, but we must go further. In particular, we must take the domestic private sector seriously as a force for peace and recovery.

Domestic firms as peacebuilders

Firms are the lifeblood of the economy: through ethical competition, firms enhance the efficiency of markets, which allows for a better use and distribution of resources and therefore a greater social wellbeing – all else equal. Moreover, most people in a society will work for private, rather than public, organizations, which means that the private sector is key in ensuring the availability of jobs and therefore ensuring the average individual can procure their livelihood. Finally, a healthy public treasury depends on private sector tax payment, and a healthy private sector depends on a state that effectively regulates markets.

Markets and private firms are usually not completely lost during civil wars, but rather made to recede to strongholds such as big cities or pay the price of access to rebel-controlled or contested territories. This, of course, carries great costs and risks, so most firms avoid conflict-affected regions. The key for post-conflict development on the ground is therefore to bring back those territories most hit by the conflict into regional and national markets. The challenge for states is thus promoting firm activity in these territories – both in terms of firm (re)entry and firm creation or entrepreneurship.

Indeed, although corporate leaders may see potential economic gains in the wake of peace agreements, and many may even hold fostering peace as a moral obligation, the costs and risks of doing business in post-conflict societies may be too high. States, therefore, must incentivize private activity for reconstruction. The Colombian government has done exactly that in their 2016 peace agreement with FARC: the Development Program with a Territorial Focus (known as PDET in Spanish) selected 170 municipalities to promote private sector activity through fiscal incentives. But, which firms are most likely to invest in post-conflict?

Corporate peacebuilding: lessons from Colombia

We gathered data on Colombia’s 500 largest firms between 2016 and 2023 to analyze what characteristics make firms more likely to engage in peacebuilding. We measure this through two indicators to have a broader view of corporate peacebuilding in Colombia: whether a firm had a collaboration with the UN in a given year, and whether a firm invested in a PDET municipality in a given year. By understanding the determinants of corporate peacebuilding, we can better inform our decisions regarding peacebuilding and development programs.

We have found that firms with diverse leadership, which we measure as having women and stakeholder on the executive board, are more likely to have a UN connection relative to those that don’t include women and stakeholders. Likewise, firms that do their reporting in terms of the UN’s Sustainable Development Goals (SDGs) and those that have women on their executive boards are more likely to invest in PDET municipalities. Thus, we find evidence that diverse leadership and alignment with the UN SDGs are strong predictors of corporate peacebuilding.

We also found differential effects of sector of economic activity: manufacturing firms are less likely to invest in PDET municipalities, and mining firms are more likely to invest in PDET. Likely, manufacturing is not profitable in these regions because of lack of infrastructure, but mining firms have no choice. Although controversial and risky, leveraging mining firms for peacebuilding could be an important strategy.

Overall, then, understanding the domestic private sector can help better design incentives to reconstruct and (re)activate economic activity in the places most affected by the conflict.

Santiago Sosa is the Founder and Director of the Latin American Peace Science Society academic network. His research focuses on civil wars and political violence, foreign policy, international relations, and the impact of the private sector on war and peace, particularly in the processes of disarmament, demobilization, and reintegration of ex-combatants. His work has been published at International Journal of Cross Cultural Management, Political Studies, Rutgers Business Review, The Review of International Organizations, and Colombia International.

Jessica Maves Braithwaite is an Associate Professor of Political Science in the School of Government and Public Policy at the University of Arizona. Her teaching and research interests relate to various dynamics of civil war and nonviolent resistance, with an emphasis on organizational mobilization in contexts of state repression and domestic unrest, as well as civilian experiences during conflict. Her work has been published or is forthcoming at Journal of Politics, International Studies Quarterly, Journal of Peace Research, Journal of Conflict Resolution, Conflict Management and Peace Science, Research and Politics, Journal of Global and Security Studies, and Terrorism and Political Violence.

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