The Cost of Violence Containment

I have written before on the work of the Institute for Economics and Peace, an organisation that researches both the costs and benefits of peace for different countries and their economies. It publishes the Global Peace Index every year. It describes its own vision and purpose:

The Institute for Economics and Peace (IEP) is an independent, non-partisan, non-profit research organization dedicated to shifting the world’s focus to peace as a positive, achievable, and tangible measure of human wellbeing and progress.

I have met some of the people who work there and I am impressed with the work they do.

Violence Containment

One of their most recent studies is about the cost of violence containment.

What they have done is looked at the amount of money that is being spent the world over (and country by country) on the containment of violence. They have also undertaken some analysis of the impact on gross domestic product in several conflict-affected countries that specific hot conflicts have had. The conclusion: violent conflict is bad for the economy.

So what did they include in the cost of containment of violence?

The table, taken from page 10 of their publication: The Economic Cost of Violence Containment , shows the categories of expenditure, the cost incurred globally on them and the total cost. They also show the total impact: that is the total cost multiplied by something they refer to as a ‘peace multiplier’ (see below).

Screen Shot 2014-03-28 at 09.20.53

There are two things that are startling or maybe surprising about this. One is the sheer magnitude of the financial resources that are being pumped into containing violence globally. Especially at a time when money seems to be so scarce for the things people and communities really need, it is staggering that we spend this kind of money on the containment of violence.

The other, rather surprising, thing is that military expenditure is included (and of course, it makes up a large chunk of this expenditure. The graph below shows this at a glance:

Elements of the cost of containing violence graph

But why did I find this surprising? Well, in short, to me, military expenditure is one of the causes of violence, in other words one of the factors that drive countries to devote so much money to the containment of violence. But if you think about it, military expenditure factors into both sides of the equation. One side arms itself to protect its interests; the other side arms itself to contain the threat of violence the other side’s arms represents. So on reflection, the inclusion of military expenditure is completely reasonable and necessary.

So there we have it: this is the cost of containing violence. The question: why do we have to spend all this money on containing violence rather than spending (probably rather less money) on addressing the causes?

Poverty and spending on violence containment

One of the conclusions the report comes to is that poorer countries often spend a very high proportion of their GDP on violence containment; so much so, that Development Assistance pales into insignificance. This graphic from their report makes this immediately clear:Screen Shot 2014-03-28 at 14.12.44

How do we fare on the home front?

It’s also interesting to see how our own country and our own backyard are doing in relation to the cost of violence containment.

And as we are still in the EU, I’ll compare the UK to the other EU countries in terms of the percentage of GDP and the global ranking for violence containment spending.

EU Member States ranking on containment of violence

A good point to highlight is that all the EU countries on the list are ranked 60 or better globally. Less positive is the fact that the UK heads up the list at rank 60 whilst Austria comes in best at rank 156 out of a total of 162 countries ranked. (Luxembourg and Malta are the only two EU Member States not ranked). The countries coming in lower than even Austria are (in that order): Kosovo, Bangladesh, Switzerland, Laos, Iceland and Bhutan.

So there’s room for savings in quite a lot of EU Member States and certainly in the UK. If we spent less money on the military and protecting ourselves from violence and more money on addressing the root causes of violence, we might have a happier society. And that, in turn, would have other positive social outcomes.

The Peace Multiplier

Multipliers in an economy describe the follow-on effects of economic activity. It is of course difficult to compute the exact impact of the peace multiplier (i.e. the positive impact that less violence is having on an economy, or the negative impact on the economy from more violence) but this study attempts to do this for three reasons:

First, because if money is diverted from violence containment to other areas of expenditure, there will be a substantial flow-on effect to the wider economy (e.g. If the money is spent on education, a better educated society will have the opportunity to have a better economy; or, if the money is spent on health, a healthier society will have a better economy.)

Second, if people are hurt, maimed or killed by violence and violent conflict, their contribution to the economy will be negatively affected.

And third, in situations of violence, investment is likely to be less plentiful and less effective because people don’t have the confidence that it is worth it.

The study estimates that the peace multiplier effect approaches two. You can read more about this in the study on page 9.

The numbers in context

So the study concludes that including the peace multiplier, $ 9 464 bn goes on violence containment. That is over $ 4000 bn more than is spent globally on agriculture.

Cost of containing violence in context

Put another way, this is roughly equal to the whole GDP of all African countries put together.

Screen Shot 2014-03-28 at 15.48.02

So where does this leave us?

By itself this study won’t change the world. But as people become aware of these figures, they can start asking questions when their governments go on about how military expenditure, expenditure on security measures (including CCTV, retention of mobile phone data, drones, and so on and so forth) needs to be increased. Why do they need to be increased? Where is the evidence that this will achieve anything substantial in terms of making the world a safer, more equal, and therefore better place?

The reason I am writing about this is therefore to spread awareness of the study and to make it more accessible to more people. Read it, spread the word, and start asking awkward questions of your elected representatives.

 

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About martinaweitsch

I'm interested in politics and rational political debate which isn't afraid of the facts or the complexities and contradictions inherent in most important issues.
This entry was posted in Economics, Peace, Politics in context and tagged , , , , , , , . Bookmark the permalink.

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