Analytical Tools for Local Economic Analysis

Measuring economic progress in conflict and post-conflict regions is notoriously difficult. Yet, these measurements are critical for Stability, Security, Transition and Reconstruction (SSTR), which in turn is crucial for counter-insurgency. A myriad of problems plague the measurement of economic activity in such regions (e.g., corruption, lack of data, uncooperative governments, and safety issues). Since, conflict and post-conflict regions provide few reliable indicators of economic activity it is often unclear whether the flow of foreign aid money is truly being funneled effectively for SSTR purposes. This proposal presents a two-pronged solution to index and understand economic activity in conflict and post-conflict regions. Development of a composite indexing system for economic activity will be based on both feasible economic indicators, and on a tested methodology to measure human behavior. These composite measures allow us to develop dynamic and stable indices using tools such as factor analyses and system dynamics. These tools will be integrated into a software and data collection device that simplifies economic indexing in the field and has the potential to gauge both formal and informal (black) markets in conflict and post-conflict regions.