The global economic burden of violent conflict

Abstract

Calculating the consequences of global public bads such as climate change or pandemics helps uncover the scale, distribution and structure of their economic burdens. As violent conflict affects billions of people worldwide, whether directly or indirectly, this article sets out to estimate its global macro-economic repercussions. Using a novel methodology that accounts for multiple dimensions of war, the article finds that, in the absence of violent conflict since 1970, the level of global GDP in 2014 would have been, on average, 12% higher. When disaggregating these results by conflict type, civil conflicts are estimated to have been the costliest by far. Income growth is found to be altered up to four years following the end of a conflict, although the direction of this relationship depends on the intensity and type of conflict. Countries also suffer significantly from fighting in neighbouring countries, thereby showing the importance of mitigating spillovers rapidly. The largest absolute losses associated with violence emanate from Asia, while many high-income economies are found to benefit economically from participating in conflicts on foreign soil. This analysis thus shows that, despite some evidence of a faster post-conflict growth and possible benefits for external participants, violent conflict leads to net global losses that linger long after peace is achieved, reducing the peace dividend. The article concludes by discussing public policy options to strengthen the benefits of peace as a global public good.

The Economic Costs of the Russia-Ukraine War: A Synthetic Control Study of (Lost) Entrepreneurship

“…Our study contributes to three distinct streams in the literature. First, we contribute to the growing evidence on the economic costs of conflict (e.g., Abadie and Gardeazabal, 2003;de Groot et al, 2022) by expanding the set of examined outcomes from GDP per capita to lost entrepreneurship. Given that the contributions of entrepreneurship to GDP are heterogeneous across countries -e.g., entrepreneurship's value added is 20% in Russia and 53% in Ukraine (Statista, 2022;European Commission, 2021) -our results provide an explanation for why war impacts countries' GDPs so differently.…”

Converting the United States and United Kingdom defence sector to civil production: The views of defence workers

“…For example, DiGiovanna and Markusen (2003), drawing on studies of defence sectors from around the world, noted that the allocation of resources to maintain these industries in many cases came at the expense of addressing other essential civilian development needs, including social services, education, and public infrastructure. In a more recent study, de Groot et al (2022) found that if there had been no violent conflict in the world since 1970, the level of global GDP in 2014 would have been, on average, 12% higher.…”

“…In a more recent study, de Groot et al. (2022) found that if there had been no violent conflict in the world since 1970, the level of global GDP in 2014 would have been, on average, 12% higher.…”

The Influence of War and Global Economy on Article Publication (Bibliometric Analysis using Biblioshiny-R)

“…War and armed con ict destroy the physical and mental health of everyone involved, including social life, infrastructure, and environmental health (Razum et al, 2019). Violent con icts directly or indirectly affect the global macroeconomic impact (de Groot et al, 2022).…”