The Economics of Reparations: Financial Compensation, Trust, and Transitional Justice Outcomes in the Gambia

Abstract

This study examines the economic and institutional effects of reparations within a transitional justice framework, using micro-level evidence from The Gambia following the implementation of the Truth, Reconciliation and Reparations Commission (TRRC) White Paper. While reparations are widely recognized as a core pillar of transitional justice, their role as economic policy instruments and drivers of institutional legitimacy remains underexplored, particularly in low-income and post-authoritarian contexts. Drawing on public finance theory, institutional economics, and transitional justice scholarship, this study conceptualizes reparations as a multidimensional intervention influencing economic recovery, institutional trust, and satisfaction with implementation. Using primary data from a nationally distributed survey of 746 victims, the analysis employs Ordinary Least Squares (OLS) regression models to estimate the relationship between perceptions of reparations and key outcome variables, controlling for socio-demographic characteristics and victim heterogeneity. The findings reveal that reparations are positively and significantly associated with all three outcome dimensions. However, their impact on economic recovery is moderate, suggesting that compensatory transfers alone are insufficient to fully restore livelihoods. In contrast, reparations have a stronger effect on institutional trust and satisfaction with implementation, highlighting their role as a signal of state accountability and legitimacy. The results further indicate that the effects of reparations are heterogeneous, with stronger impacts observed among low-income individuals and victims with more severe experiences. The study contributes to the literature by reframing reparations as a hybrid economic and institutional policy instrument and providing one of the first micro-level empirical analyses of their effects in an African transitional justice context. The findings underscore the importance of adequate, timely, and inclusive reparations in strengthening both welfare outcomes and institutional legitimacy.