The Impact of Religious Conflicts on Financial Institutions and Property Rights in Post-war Kosovo and Pakistan

This paper examines the effects of religion-based conflicts on trust in economic institutions through a comparative analysis of Kosovo and Pakistan. It argues that when religious conflict disrupts the functioning of economic systems during periods of violence, it leaves lasting legacies that shape trajectories of post-conflict recovery. In Kosovo, ethnic divisions and religious conflicts have profoundly undermined confidence in financial institutions and property restitution processes, leaving many Serbian communities dependent on parallel institutional structures. In Pakistan, pre-existing sectarian fissures and the entanglement of religion with governance perpetuate systemic exclusion, restrict access to finance, fragment property rights, and foster reliance on informal networks such as hawala and religious organizations. Drawing on survey data, institutional reports, and secondary literature, this paper demonstrates how weakened trust in formal institutions fuels economic fragmentation, deters investment, and entrenches informality.