Global Economic Costs of Conflict (GECC)

The effects of conflict on civilians due to death, serious injury, or other direct and indirect outcomes are immense. The objective of this research project is to estimate the global economic costs of mass violent conflict that is the measurable worldwide impact of conflict, and to provide estimates both at the country level and across time. In doing so, the project analyses different socioeconomic transmission mechanisms by which conflict affects economic outcomes, both in the short and long-run. In this project, we emphasize the consequences of armed violent conflicts on all key physical needs for human life, expressed in monetary terms.

In practice, this means our analysis focuses on indicators such as GDP to measure economic costs. This is an inclusive research strategy, as indirect effects of conflict, through its influence on e.g. education and investment, can also be conveniently expressed that way. Furthermore, it is important to consider the impact of conflict in foregone prosperity in both conflict countries as well as neighbouring countries that are affected by spillovers. A final mechanism that we will be highlighting is the fact that the consequences of conflict do not stop with a ceasefire. Indeed, the post-war effects on growth in countries affected by conflict should be, and will be, included as well. As such, we will analyse a wide range of channels through which the costs of conflict accumulate.

Transparent and concrete estimates of the impact of conflict on economic outcomes will draw attention to the opportunity costs of violent conflict and will strengthen the case for early and effective interventions. The findings of the project will also help to differentiate the channels through which these impacts materialise, so as to derive policies for the core problems of prevention, intervention, reconstruction, and development. This will allow us to recommend better policies for handling and counteracting the negative spiral of violence and underdevelopment produced by conflict.

The research project, funded by the German Foundation for Peace Research and managed by the German Institute for Economic Research (DIW Berlin), runs from April 2009 until March 2011. For further information please visit the project website.