A key piece of conventional wisdom among scholars of modern armed conflict is that collateral damage is often strategically costly in war. Yet most combatants already know this and take actions after mistakes—most prominently, the distribution of “condolence payments” to civilian victims—in order to mitigate these costs. Do these payments work? This question is important not only for policymakers but also for deeper theoretical debates about how civilians respond to combatant signals in war. To examine these issues, I use micro-level conflict event data on 4,046 condolence payments made by Coalition forces to civilian victims during the Iraq War from 2004 to 2008, matching it with corresponding data on collateral damage and insurgent violence. The results of this analysis reveal that post-harm compensation does significantly diminish local rates of insurgent violence, and that this is true across different types of payments (cash handouts or in-kind assistance). Ultimately, these patterns can be best explained by a rationalist mechanism in which civilians update their beliefs about violent events based on new information about combatants’ wartime intentions. The results thus provide a compelling strategic rationale for combatants to compensate their victims in war, and suggest that civilians are not blinded to new information about conflict dynamics by their preexisting biases.

Coalition forces have spent upwards of $50 million on condolence payments to Afghan and Iraqi civilians. These condolence payments were intended as an expression of sympathy rather than an admission of fault, and the programme itself has been criticised for the arbitrary, inconsistent, and low valuation of civilian lives. Rather than focus on the practical problems associated with condolence payments or normative arguments about whether belligerents ought to compensate those harmed, this article will trace the strategic imperatives that underpinned this programme and shaped its development. As coalition forces began to recognise the strategic costs of civilian casualties, they used a variety of tactics to mitigate the effects of civilian casualties on the success of military operations. This article will argue that condolence payments should not be seen as a humanitarian gesture designed to recognise and respond to the suffering of ordinary civilians, but will argue that condolence payments should be viewed as a weapons system aimed at securing specific military goals. As such, this article will argue that condolence payments continued to objectify and devalue the lives of Afghans and Iraqis by treating them as a means to an end rather than an end in themselves.