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As used here, compensation means providing money or items of economic value to a person or group that has suffered an injury caused by another. Compensation is different from restitution, meaning the return of specific property to a previous owner, and reparations, usually applied to compensation a defeated country pays to the victors for damages or losses suffered during war.

Compensation has long been a familiar principle in law, business, and everyday life in many societies. Many legal systems provide procedures (e.g., lawsuits in U.S. courts) for determining an amount of compensation that the law regards as equivalent to certain types of injuries. Such compensation is not necessarily intended to punish the party causing the injury, but instead to try to relieve the injury; paying it generally relieves the offending party of further financial obligations.

Various justifications are offered for these ideas. Some identify their foundations in religious or ethical teachings; authorities ranging from Aristotle to the Qu'ran instruct that those causing harm should repair it. Although starting from different premises, many economists would urge the same result: Parties, even those engaging in lawful behavior, should bear the costs of their actions, including injuries inflicted on others. Whatever their ultimate sanction, these concepts are deeply woven into international law and most national legal systems.

Limitations and Possibilities

The idea of compensation as the equivalent of injury suffered may be accepted in many settings, but is certainly insufficient within the context of genocide or crimes against humanity. These offenses involve profound attacks on human life and dignity. Their enormity and brutality make it impossible to truly restore the situation that existed beforehand. The dead cannot be restored; injuries and traumas cannot be erased; lost communities are lost, except perhaps in memory. Viewing transfers of funds or property as the equivalent of victims' experiences obscures the offenses' gravity and to many seems to trivialize victims' suffering. Further, the notion that providing full compensation relieves the paying party of further responsibility is inadequate for addressing the personal responsibilities of perpetrators of genocide or crimes against humanity.

Nevertheless, survivors of such crimes have needs that must be met, including food, clothing, shelter, medical care, and the physical means to build new lives. Historically, such support often has been absent, leaving survivors in deplorable conditions. However, several innovative mass claims programs have shown that properly conceived compensation programs can ease survivors' material burdens. In addition, such programs provide individuals with validation and recognition. They also may clarify and enlarge the historical record, increasing the broader community's understanding of past crimes.

Relevant International and Domestic Norms

Until recent decades neither international law nor domestic legal systems allowed most individuals or groups injured by genocide or other large-scale abuses to claim and obtain compensation. Before World War II international law placed few restrictions on what states did to their own peoples. It required that states correct or compensate for certain economic injuries they inflicted on aliens, but these rules did not limit a state's abuse of its own people. The rules protecting aliens also included procedural limitations that often limited their effectiveness. For example, they generally required an injured alien to exhaust all remedies under the offending state's domestic law. The procedures for making international claims were likewise restrictive. A state could bring international claims against other states for mistreating the claimant's nationals, but individuals could not make an international claim against a state.

The situation was little better under national law. National legal systems generally applied the principle of sovereign immunity to bar suits against the state unless the authorities consented to such suits and waived immunity. Finally, neither international law nor domestic legal systems generally recognized or protected the rights of communities or groups.

New Norms, New Procedures

The decades after World War II witnessed important changes. The 1945 United Nations (UN) Charter identified the protection of human rights as a key purpose of the organization. There was growing international acceptance of human rights principles expressed in such documents as the Universal Declaration of Human Rights adopted by the UN General Assembly in 1948, international human rights covenants, and other global and regional treaties. These often included provisions like Article 2(3) of the International Covenant on Civil and Political Rights adopted by the UN General Assembly in 1966, which required countries to ensure effective domestic remedies for rights violations. Many states also adopted constitutional provisions or laws requiring both remedies and compensation for such violations. UN human rights bodies studied the right to compensation for rights violations and developed statements of principles elaborating on this. Human rights treaty bodies called for states committing specific violations to compensate victims.

Several large-scale programs to compensate victims paralleled these doctrine-related developments. With varying success these substituted administrative compensation procedures involving simplified procedures and evidence requirements for slow, expensive, and uncertain individual suits in national courts. This development recognized the fact that survivors of mass rights violations rarely have the time, stamina, or resources for long and elaborate individual legal proceedings, nor do they have the documents or other evidence normally required in such proceedings.

A key early precedent arose in 1952, when the Federal Republic of Germany (FRG or West Germany) and the new Jewish State of Israel agreed that West Germany would pay Israel 3.45 billion deutsche marks, most of it directed to the resettlement and rehabilitation of Jewish victims of Nazi persecution. Although fiercely attacked by some as debasing the memory of the Holocaust or as a cynical exercise in Realpolitik, the agreement resulted in the transfer of badly needed resources to Israel and to individual survivors. It also set an important precedent for later large-scale compensation programs. In 1953 West Germany passed an individual indemnification law eventually resulting in the payment of many more billions to victims of Nazi persecution. However, geographic and substantive limitations of the law led to the conclusion of additional compensation agreements between West Germany and several European countries.

Other efforts to compensate victims for large-scale state misconduct followed. The United States adopted the Civil Liberties Act of 1988, authorizing the compensation of Japanese Americans forcibly interned during World War II and formally apologizing for their mistreatment. At least 81,000 former internees each received $20,000 and—more important for many—official recognition of their unfair treatment and affirmation of their American identity. Australia, Canada, New Zealand, and the United States all wrestled in varying ways and with varying success on how to fairly compensate indigenous communities displaced and deeply wounded during the course of national development.

In Europe during the 1990s charges that Swiss banks had pocketed the accounts of Holocaust victims and that neutral Switzerland had benefited through financial transactions with the Nazi regime led to other compensation programs. Responding to such criticisms, major Swiss banks created an international committee to identify accounts dormant since the war and potentially owned by victims, as well as a process to resolve claims to those accounts. To settle class action lawsuits against them in the United States, Swiss banks also agreed to provide $1.25 billion for Holocaust claimants—$800 million to pay claims of deposited assets and $450 million to compensate some victims of Nazi slave labor. The Swiss government additionally proposed the establishment of a significant fund to assist victims and refugees worldwide, but a 2002 referendum to finance it by selling Swiss National Bank gold failed.

In the late 1990s, following settlement of the Swiss bank litigation in the United States, major German companies and the German government established a fund of 10 billion deutsche marks and related mechanisms to compensate the victims of Nazi slave and forced labor programs. Further mass claims programs aimed at redressing past injustices were undertaken with varying success in Eastern European countries and Russia after the fall of the Berlin Wall in 1989. Other programs sought to address tangled claims to real property in Bosnia and Kosovo after the Balkan Wars of the 1990s.

Following September 11, 2001, the U.S. government implemented an extensive program to provide compensation to those who lost family members in the terrorist attacks where the actual perpetrators could not be held liable.

UN Compensation Commission

All of the programs cited thus far rested on the voluntary acceptance of financial responsibility by the state or large private entities. In contrast, in 1991, the UN Security Council created an extensive compensation program funded by the compulsory transfer of Iraqi resources. The United Nations Compensation Commission (UNCC), an agency based in Geneva, has collected and processed more than 2.5 million claims for injuries to non-Iraqis directly caused by Iraq's 1990 invasion of Kuwait. By July 2003 the UNCC completed work on all but a few thousand of its timely filed claims, providing compensation of almost $17.8 billion to injured parties, including full payment to over 1.5 million injured individuals and families, most from developing countries.

The UNCC is the largest international compensation program and has been a laboratory for new techniques to implement large-scale programs intended to compensate rights violations. Although most claims were collected by states, the UNCC also developed procedures for Palestinians and others unable to file a claim through a state. It sought to provide compensation for valid claims when it was most needed, even if this required some approximation or crude estimate of justice. Given its huge caseload, the UNCC determined early on that it generally could not utilize traditional claim-by-claim adversarial legal processes. It instead developed more administrative procedures for collecting and assessing claims, particularly small claims of individuals and families. Initially, the UNCC's procedures, especially for individual and family claims, allowed only limited participation by Iraq, a feature much criticized by some governments and scholars. Iraq was subsequently authorized to present evidence and participate in hearings on many large claims.

To manage 2.5 million claims, the UNCC developed and applied computer-based claims collection and management techniques that since have been modified and applied in other mass claims programs. It identified various subgroups of claims presenting common fact patterns and legal issues, allowing hundreds or even thousands of individual claims to be grouped, analyzed, and checked together.

The largest such group involved more than one million individuals and families, most from developing countries, forced to abandon jobs and property and flee Kuwait or Iraq following the invasion. To check and verify their claims of wrongful departure, the UNCC developed a massive database of official and nongovernmental organization records listing persons who crossed borders after Iraq invaded Kuwait. Powerful software permitted the checking and verification of sample claims using this database and other evidence. Individuals or families received fixed amounts of compensation calculated to approximate the economic injuries suffered by most people who fled. Persons with evidence of more significant injuries could file claims for larger amounts, but those claims were considered somewhat later in the process.


The various innovations introduced by the UNCC and other recent mass claims processes are available for application in other future settings. Nevertheless, one ingredient is essential for any mass compensation program to succeed—money, both to pay claims and to run the program. These programs require sizable financial resources; the few successful efforts to compensate large numbers of rights victims have involved the participation of a state or other significant organization able to supply substantial funding.

In contrast, many contemporary situations of genocide or crimes against humanity involve offenses by fragile and impoverished states or by nonstate players without significant financial resources. The situation involving Iraq's 1990 invasion of Kuwait represented an unusual blending of resources and political will in the international community. This may not be repeated often. Even in cases of significant abuses involving a wealthy state, national policymakers may resist accepting financial responsibility for past wrongs, as attested by the Japanese government's unwillingness to address claims of enforced sexual slavery during World War II.

SEE ALSO Rehabilitation; Reparations; Restitution


Barkan, Elazar (2000). The Guilt of Nations. Restitution and Negotiating Historical Injustices. Baltimore, Md.: Johns Hopkins University Press.

Bassiouni, Cherif (2000). The Right to Restitution, Compensation and Rehabilitation for Victims of Grave Violations of Human Rights and Fundamental Freedoms, Final Report of the Special Rapporteur. UN Document E/CN.4/2000/62 (January 18). Available from

Eizenstat, Stuart (2003). Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II. New York: Public Affairs.

Lillich, Richard, ed. (1995). The United Nations Compensation Commission: Thirteenth Sokol Colloquium. Irvington, N.Y.: Transnational Publishers.

Randelzhofer, Albrecht, and Christian Tomuschat, eds. (1999). State Responsibility and the Individual: Reparation in Instances of Grave Violations of Human Rights. The Hague: Martinus Nijhoff

Shelton, Dinah (1999). Remedies and International Human Rights Law. New York: Oxford University Press.

Van Boven, Theo (1993). Study Concerning the Right to Restitution, Compensation and Rehabilitation for Victims of Gross Violations of Human Rights and Fundamental Freedoms. UN Document E/CN/4/Sub.2/1993/8 (July 2). Available from

John R. Crook

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Compensation (transcendent function) finds its origins in the delineation of dynamics of the complex.

In 1907 Carl Gustav Jung notes the pathogenic complex posses a quantum of libido which grants it a degree of autonomy that is opposed to conscious will. Though this dynamic has a pathological cast, it conveys the essence of what Jung termed compensation; namely, the capacity of the unconscious to influence consciousness.

Jung noted the ego identifies with a preferred set of adaptive strategies, and thus tends to restrict the range of adaptive response and hamper individuation. In "The Importance of the Unconscious in Psychopathology" (1914), he introduced the idea, saying, "the principal function of the unconscious is to effect a compensation and to produce a balance. All extreme conscious tendencies are softened and toned down through a counter-impulse in the unconscious." (1914a). This assertion ascribes a different role to unconscious dynamics, i.e. one that is purposive and intelligent, and not restricted solely to wishing.

In 1917, Jung expanded his notion of an intelligent unconscious further when he asserted the existence of a "supraordinate unconscious" as a common human inheritance, viewed as the source of compensatory activity.

Later, Jung referred to compensation as "an inherent self regulation in the psychic apparatus." Jung's assertion of an intelligent unconscious culminated in his concept of the self (1928a), understood as the personality's central organizing agency that instigated and guided individuation. Paired with the concept of the self, compensation was seen as the core process in realizing selfhood.

Given this core value, Jung sought a means to maximize its efficiency and benefits. He termed this means the "transcendent function," described as a joining of the opposing tendencies of conscious and unconscious that would produce a synthesis in the form of a "uniting symbol" in order to release compensatory contents of the unconscious. Jung, noted the transcendent function facilitated a transition from one attitude to another and held the person skilled with understanding of conscious and unconscious interaction and its symbolic products could accelerate individuation.

Peter Mudd

See also: Animus-Anima (analytical psychology); Interpretation of dreams (analytical psychology); Projection and "participation mystique" (analytical psychology).


Jung, Carl Gustav. (1907). The psychology of Dementia præcox. Coll. works, vol. III, London: Routledge & Kegan Paul.

. (1914a). On the importance of the unconscious in psychopathology. Coll. works, vol. III, London: Routledge & Kegan Paul.

. (1917-18-26-43). The psychology of the unconscious processes. Coll. works, vol. VII: London, Routledge & Kegan Paul.

. (1928a [1935]). The relations between the ego and the unconscious. Coll. works, vol. VII, London: Routledge & Kegan Paul.

. (1928b [1948]). On psychic energy. Coll. works, vol. VIII, London: Routledge & Kegan Paul.

. (1928c [1948]). General aspects of dream psychology. Coll. works, vol. VIII, London: Routledge & Kegan Paul.

. (1928d [1948]). Instinct and the inconscious. Coll. works, vol. VIII, London: Routledge & Kegan Paul.

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com·pen·sa·tion / ˌkämpənˈsāshən/ • n. something, typically money, awarded to someone as a recompense for loss, injury, or suffering: seeking compensation for injuries suffered at work | [as adj.] a compensation claim. ∎  the action or process of making such an award: the compensation of victims. ∎  the money received by an employee from an employer as a salary or wages. ∎  something that counterbalances or makes up for an undesirable or unwelcome state of affairs: getting older has some compensations. ∎  Psychol. the process of concealing or offsetting a psychological difficulty by developing in another direction. DERIVATIVES: com·pen·sa·tion·al / -shənl/ adj.

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compensation (kom-pen-say-shŏn) n.
1. the act of making up for a functional or structural deficiency. For example, compensation for the loss of a diseased kidney is brought about by an increase in size of the remaining kidney, so restoring the urine-producing capacity.

2. monetary payment in redress for injury or loss, the amount of which usually corresponds to the degree of harm suffered.

3. (in psychoanalysis) the act of exaggerating an approved character trait to make up for a weakness in an opposite trait.

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A pecuniary remedy that is awarded to an individual who has sustained an injury in order to replace the loss caused by said injury, such asworkers' compensation. Wages paid to an employee or, generally, fees, salaries, or allowances. The payment a landowner is given to make up for the injury suffered as a result of the seizure when his or her land is taken by the government througheminent domain.