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The Economic Cost of Violence Containment

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The Economic Cost of Violence Containment, the latest report from the Institute for Economics and Peace, calculates the cost of violence in over 150 countries around the world.

Published 20 Feb 2014 The economic impact of violence has surpassed the combined GDPs of Japan and Germany.

According to the latest report from the Institute for Economics and Peace, the global economic cost of violence in 2012 was US$9.46 trillion, which represents 11% of Gross World Product.

The report, The Economic Cost of Violence Containment, calculates the cost of violence containment in over 150 countries according to 13 different types of violence related spending.

Violence containment spending is understood as any economic activity that is related to the prevention or consequences of violence; it includes direct costs such the medical cost of a victim, and indirect costs such as the loss of human capital when someone is displaced as a result of violence.

To put this in perspective: violence containment spending is over 2.4 times the size of the total GDP of Africa.

While some spending on violence containment is necessary, surplus spending on inefficient programmes can be detrimental to a country’s economic growth and wellbeing. Overspending on violence containment restricts the resources that can be allocated to other productive institutions such as education and healthcare.

Some of the countries that have the highest violence containment expenditure, are also among the poorest, with the cost of violence dwarfing foreign aid.

The three countries with the highest level of violence containment spending as a percentage of GDP are North Korea, Syria and Liberia. The military accounts for 70% of North Korea’s violence containment expenditure, which is equivalent to 20% of the country’s total GDP.

To find out more and to see how much violence costs each country, download the Economic Cost of Violence Containment Report.