Estimating the Global Costs of Violence
Few studies have been conducted which attempt to estimate the economic cost of violence and fear on the world economy. In an attempt to rectify this, this study describes a methodology aimed at both providing a deep insight into the breakdown of national costs of violence and an estimation of the benefits that would flow to business from improvements in peace. The cost of violence containment was estimated using the raw data from the indicators of the Global Peace Index (GPI). The results show an estimated economic impact of violence containment to the world economy in 2012 of US$9.46 trillion or 11% of gross world product (GWP). This study provides a means of tangibly measuring the extent of the economic space devoted to dealing with violence and its consequences. Since violence containment expenditure changes the structure of the wider economic environment, it has tangible impacts on business through altering consumer behaviour, reducing market size, disrupting supply lines and increasing operating costs. This research provides an estimate of the economic dividend that could be achieved through greater peace.
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Document Type: Research Article
Publication date: January 1, 2014
More about this publication?
Business, Peace and Sustainable Development (BPSD) aims at understanding the role of the business sector in enhancing peace and reducing violence, and contributing to sustainable development. On the other hand, it is also aimed at understanding the importance of peace to the economy and markets. While some research has been published on business and peace and peace through commerce, BPSD is the first journal dedicated to mutual contribution of business and peace.
Peace is the absence of violence, but it also incorporates social justice, human rights, stability and sustainable development. Peace is essential to address the global challenges facing humanity today. Without peace we will be unable to achieve the levels of cooperation, inclusiveness and social equity necessary to solve problems such as climate change, global poverty and the health crisis. It is acknowledged that most businesses and industries need a peaceful market to operate and assure a smooth supply chain. As such, the relationship between business and peace is an on-going and mutual one, and needs to be further developed and investigated.
Corporate Peace is defined as the incorporation of peace and reduction of violence into a company's strategy, decision-making and the value chain in order to raise awareness to peace, support and enhance it. Corporate Peace is an umbrella concept that contains business, social and strategic dimensions.
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