Can you put a price on peace? This study says you can

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Douglas Broom. Senior Writer, Formative Content


  • Conflict and violence cost the world more than $14 trillion a year.
  • That’s the equivalent of $5 a day for every person on the planet.
  • Research shows that peace brings prosperity, lower inflation and more jobs.
  • Just a 2% reduction in conflict would free up as much money as the global aid budget.
  • Report urges governments to improve peacefulness, especially amid COVID-19.

What is the price of peace?

Or put another way, how much better off would we all be in a world where armed conflict was avoided?

Around $14.4 trillion in 2019, according to the Institute for Economics and Peace (IEP) which crunched the numbers. That’s about $5 a day for every person on the planet.

To give some context, 689 million people – more than 9% of the world’s population – live on less than $1.90 a day, according to World Bank figures, underscoring the potential impact peace-building activities could have.

Just over 10% of global GDP is being spent on containing, preventing and dealing with the consequences of violence. As well as the 1.4 million violent deaths each year, conflict holds back economic development, causes instability, widens inequality and erodes human capital.

Putting a price tag on peace and violence helps us see the disproportionately high amounts spent on creating and containing violent acts compared to what is spent on building resilient, productive, and peaceful societies. —Steve Killelea, founder and executive chairman, Institute for Economics & Peace (IEP)

The cost of violence

The cost of violence
Just over 10% of global GDP is being spent on containing, preventing and dealing with the consequences of violence. Image: IEP calculations

In a report titled “The Economic Value of Peace 2021”, the IEP says that for every death from violent conflict, 40 times as many people are injured. The world’s 10 most affected countries are spending up to 59% of their GDP on the effects of violence.

Grounds for hope

But the picture is not all bleak. The economic impact of violence fell for the second year in a row in 2019, as parts of the world became more peaceful.

The global cost dropped by $64 billion between 2018 and 2019, even though it was still $1.2 trillion higher than in 2012.

Total economic impact and percentage change by region, 2019.
Central American and the Caribbean have had an 8.3% negative change in economic impact related to violence. Image: IEP

In five regions of the world the costs increased in 2019. The biggest jump was in Central America and the Caribbean, where a rising homicide rate pushed the cost up 8.3%.

Syria, with its ongoing civil war, suffered the greatest economic impact with almost 60% of its GDP lost to conflict in 2019. That was followed by Afghanistan (50%) and South Sudan (46%).

The report makes a direct link between peace and prosperity. It says that, since 2000, countries that have become more peaceful have averaged higher GDP growth than those which have become more violent.

“This differential is significant and represents a GDP per capita that is 30% larger when compounded over a 20-year period,” the report says adding that peaceful countries also have substantially lower inflation and unemployment.

Vicious and virtuous cycle from changes in peacefulness.
Vicious and virtuous cycle from changes in peacefulness. Image: IEP

“Small improvements in peace can have substantial economic benefits,” it adds. “For example, a 2% reduction in the global impact of violence is roughly equivalent to all overseas development aid in 2019.”

Equally, the total value of foreign direct investment globally only offsets 10% of the economic impact of violence. Authoritarian regimes lost on average 11% of GDP to the costs of violence while in democracies the cost was just 4% of GDP. https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&frame=false&hideCard=false&hideThread=false&id=1361978793192218624&lang=en&origin=https%3A%2F%2Fwww.weforum.org%2Fagenda%2F2021%2F02%2Fwar-violence-costs-each-human-5-a-day%2F&theme=light&widgetsVersion=889aa01%3A1612811843556&width=550px

And the gap has widened over time, with democracies reducing the cost of violence by almost

16% since 2007 while in authoritarian countries it has risen by 27% over the same period.

The report uses 18 economic indicators to evaluate the cost of violence. The top three are military spending (which was $5.9 trillion globally in 2019), the cost of internal security which makes up over a third of the total at $4.9 trillion and homicide.

Peace brings prosperity

The formula also contains a multiplier effect because as peace increases, money spent containing violence can instead be used on more productive activities which drive growth and generate higher monetary and social returns.

“Substantial economic improvements are linked to improvements in peace,” says the report. “Therefore, government policies should be directed to improving peacefulness, especially in a COVID-19 environment where economic activity has been subdued.”

The IEP says what it terms “positive peace” is even more beneficial than “negative peace” which is simply the absence of violence or the fear of violence. Positive peace involves fostering the attitudes, institutions & structures that create and sustain peaceful societies.

What’s the World Economic Forum doing about diversity, equity and inclusion?

The COVID-19 pandemic and recent social and political unrest have created a profound sense of urgency for companies to actively work to tackle inequity.

The Forum’s work on Diversity, Equality, Inclusion and Social Justice is driven by the New Economy and Society Platform, which is focused on building prosperous, inclusive and just economies and societies. In addition to its work on economic growth, revival and transformation, work, wages and job creation, and education, skills and learning, the Platform takes an integrated and holistic approach to diversity, equity, inclusion and social justice, and aims to tackle exclusion, bias and discrimination related to race, gender, ability, sexual orientation and all other forms of human diversity.

The Platform produces data, standards and insights, such as the Global Gender Gap Report and the Diversity, Equity and Inclusion 4.0 Toolkit, and drives or supports action initiatives, such as Partnering for Racial Justice in Business, The Valuable 500 – Closing the Disability Inclusion Gap, Hardwiring Gender Parity in the Future of Work, Closing the Gender Gap Country Accelerators, the Partnership for Global LGBTI Equality, the Community of Chief Diversity and Inclusion Officers and the Global Future Council on Equity and Social Justice.

The foundations of a positively peaceful society, it says, are: a well functioning government, sound business environment, acceptance of the rights of others, good relations with neighbours, free flow of information, high levels of human capital, low levels of corruption and equitable distribution of resources.

The World Economic Forum’s report Mobilizing the Private Sector in Peace and Reconciliation urged companies large and small to recognise their potential to work for peace quoting the former Goldman Sachs chair, the late Peter Sutherland, who said: “Business thrives where society thrives.”

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

During the coronavirus pandemic, we must fight for LGBTQ rights more than ever

Final preparations for DCX and IFRA Expo 2019, in association with The European Sting

How two colossal Assyrian icons were recreated using digital tech

Libya: EU efforts should focus on protecting migrants, MEPs say

Difficulties of vaccination against COVID-19

EU takes again positive action on migration crisis while Turkey asks for dear favors in exchange for cooperation

Project Manager – 2024

Social media and the lack of information for blood donation

Commission welcomes provisional agreement on the European Climate Law

The EU to bear the cost of eventual sanctions against Russia

Saudi woman seeking asylum in Thailand ‘now in a secure place’ says UNHCR

A 550 km-long mass of rotting seaweed is heading for Mexico’s pristine beaches

Lack of investment and ambition means Youth Guarantee not reaching potential

This is the life of a refugee: the constant destruction and construction of dreams every day

This is where people live the longest in the EU

Nicaragua ‘crisis’ still cause for concern amid murder, torture allegations: Bachelet

This is our chance to completely redefine the meaning of work

European Green Deal: Commission presents actions to boost organic production

Green Deal: measures to step up the fight against global deforestation

These are the countries where most adults still don’t have a smartphone

It’s just electronic cigarette, don’t worry?

Historian Niall Ferguson on what the pandemic means for the global economy, geopolitics – and parties

Coronavirus response: Commission welcomes agreement on crucial VAT relief for vaccines and testing kits

Portuguese Presidency outlines priorities to EP committees

Romanian Presidency priorities discussed in committees

EU is now giving Google new monopolies to the detriment of European citizens and Internet companies

Mexico: UN chief saddened by pipeline blast in which dozens were killed

The 28 EU leaders show contempt for the European Elections results

Thursday’s Daily Brief: ambulance attack in Libya, #GlobalGoals defenders, human rights in Cambodia, Swine Fever

Pay Transparency: Commission proposes measures to ensure equal pay for equal work

This is how drones and other ‘tradetech’ are transforming international trade

Make no mistake: the purpose of business is to serve society

These are the top countries for travel and tourism in 2019

Rare Disease Day: a new EU platform to support better diagnosis and treatment

Spanish and Polish voters are crying out for an imminent European change while US urge now Germany to change route

EU co-ordinating the urgent delivery of COVID-19 vaccines to Moldova

Why global collaboration is needed to protect against a new generation of cyber threats

Does upgrading our minds mean losing the spark of genius?

This Brooklyn farm company is training a new generation of urban farmers

Countries are piling on record amounts of debt amid COVID-19. Here’s what that means

A brief history of cryptography and why it matters

Yemen: €95 million in EU humanitarian aid for people threatened by conflict and famine

Parliament: No consent to EU budget until €11.2 billion unpaid bills are settled

Chinese tech investors are turning towards MENA. Here’s why

Can Obama attract Iran close to the US sphere of influence?

How our Europe will regain its strength: op-ed by Ursula von der Leyen, President of the European Commission

From underestimation to valorization: how mobile technology is transforming global health

The Khashoggi affair: A global complot staged behind closed doors

Safe spaces offer security and dignity for youth, and help make the world ‘better for all’: Guterres

Smart city experts should be looking to emerging markets. Here’s why

Brazil identifies a clear pathway for aligning its transfer pricing framework with the OECD standard

The public health system in Brazil as a promoter of sexual and reproductive health and rights: how does it help in the fight against HIV/AIDS?

Mountains matter, especially if you’re young, UN declares

At G20 Summit OECD’s Gurría says collective action vital to tackle global challenges

Top UN court orders Myanmar to protect Rohingya from genocide

How fungi could save the world

Why South Africa is on a path of economic renewal

Rule of Law: Commission launches infringement procedure to protect the independence of the Polish Supreme Court

Supply chains are on the cusp of a data-fed revolution. Here’s how businesses can succeed.

Global warming: our responsibility

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s