Calculating the impact of different societal challenges, such as climate change, HIV/AIDS or cancer, uncovers the scale, distribution and structure of their economic burdens. Since violent conflict affects billions of people worldwide, the analysis of its impact is important. Using an integrated economic model accounting for multiple forms of conflict, we find that in the absence of violent conflict since 1960, global GDP in 2007 would have been 15.7% (10.9 trillion USD) larger. Furthermore, global income inequality would have been significantly lower. The largest absolute impacts are associated with domestic strife in China and India while Afghanistan suffers the largest relative burden. In contrast, many developed economies actually benefit from war. This shows that violent conflict is an integral part of the world economic structure, with a burden possibly exceeding that of climate change.
Year: 2015 HiCN Working Paper No. 199