Understanding Violent Forms of Economic Development and the Fluidity of Civil War Violence: A Case Study of Civil War and Foreign Direct Investment in Sudan

It is often argued that civil war has acutely negative economic consequences. Within a prominent set of civil war literature, this type of conflict is deemed to be so economically destructive that an often-cited dictum has arisen: that “civil war represents development in reverse”. According to this literature, particularly detrimental to an economy experiencing civil war is the propensity of violence to create instability that deters foreign investment, severely inhibiting economic growth. However, existing scholarship that investigates if civil war deters foreign direct investment (FDI) is inconsistent at best; on the whole, evidence does not support the assumed negative relationship between civil war and investment. Moreover, nascent scholarship has observed that FDI enters countries with internal armed conflicts unabated; other studies show that some civil war economies exhibit significant increases in FDI during conflict. The Second Sudanese Civil War (1983-2005) is a case in point, with FDI – concentrated in the oil sector – exhibiting strong increases during particular phases of this conflict. A critical body of scholarship argues that processes of economic development such as inflows of foreign investment are often accompanied and facilitated by violence. This paper aims to investigate these claims to better understand why FDI can exhibit increases in some civil war economies. By using a case study of Sudan, the project assumes a “fluidity of civil war violence” to provide a fuller understanding of the causal mechanisms that can lead to higher levels of FDI in civil war economies. In particular, the paper analyzes if particular types of violence perpetrated by the government’s armed forces and pro-government militias, groups which were sympathetic to the interests of key investors in the oil industry, have facilitated FDI in Sudan’s oil sector to the detriment of large swathes of civilians affected by the violence.