Northern Ireland is no exception to the thesis that economic aid plays an important role in helping to build the peace dividend in protracted, violent ethno-political conflicts. It helps to generate sustainable economic development, employment and a sense of purpose and social pride across political and, in Northern Ireland'. case in particular, religious divides. There are direct links between economic development and resolution of the conflict. This is borne out through the analysis of the effects of the International Fund for Ireland and the EU's Special Support Programme for Peace and Reconciliation, illustrated by extracts from a series of interviews with community and programme development leaders and civil servants conducted during the summer of 1997. The Northern Ireland case-study shows how intervention through external economic aid could set the stage for conflict transformation and the building of a positive peace in divided communities. The widespread participation of grass-roots constituents, groups and agencies aided by the politically engaged and psychologically empowered is crucial.