(Peace) - 'Substantial economic improvements are linked to improvements in peace.'

Posted by ProjectC 
'Violence not only has a direct impact on the economy, but it also reduces the positive benefits that peacefulness has on the macroeconomic performance of countries. Since 2000, countries that have improved in peacefulness have seen an average 1.4 percentage points higher GDP per capita growth when compared to countries that have become less peaceful as measured by the Global Peace Index (GPI). This differential is significant and represents a GDP per capita that is 30 per cent larger when compounded over a 20-year period. Furthermore, the average inflation and unemployment rate for the countries with the largest improvements on the GPI was substantially lower than those with the largest deteriorations.

Small improvements in peace can have substantial economic benefits. For example, a two per cent reduction in the global impact of violence is roughly equivalent to all overseas development aid in 2019. Whereas, a ten per cent reduction is equivalent to adding three new economies the size of Norway, Ireland and Belgium. Additionally, all Foreign Direct Investment in 2019 was also roughly equal to ten per cent of the economic impact of violence.

Democracies tend to fare better than authoritarian regimes with the average economic cost for democracies being four per cent of their GDP, while in authoritarian regimes it’s 11 per cent. Additionally, since 2007, authoritarian regimes recorded the largest increase in their economic impact of violence, increasing by 27 per cent. Full democracies recorded the largest reduction at 15.9 per cent.


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

- Economic Value of Peace (2021) p. 3


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