Global Economic Costs of Conflict (GECC)

Completed Project

Project Management

Tilman Brück

Commissioned by

German Foundation for Peace Research
Deutsche Stiftung Friedensforschung

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.

GECC Project Paper 3/2010
" The Global Economic Costs of Conflict " by Carlos Bozzoli, Tilman Brück, Olaf J. de Groot (paper available on request)
Abstract: This paper presents the first concise, consistent and complete estimation of the Global Economic Costs of Conflict. We find that global GDP in 2007 would have been 14.3% higher if there had not been any conflict since 1960. This translates to 9.1 trillion $, of which Asia suffers the largest share. In relative terms, Africa would have gained the most, had there not been conflict since 1960. We come to this estimation by estimating the influence of different types of conflict events and then reconstructing what would have happened in the absence of them. The most important contributor to the total costs of conflict is found in its lingering effects where having conflict lowers a country's level of GDP and it takes time to overcome this, despite the occurrence of conditional convergence.

Wochenbericht des DIW Berlin 21 / 2010
" Eine erste Schätzung der wirtschaftlichen Kosten der deutschen Beteiligung am Krieg in Afghanistan"  (PDF, 388.75 KB)by Tilman Brück, Olaf J. de Groot, Friedrich Schneider
Abstract: In diesem Beitrag werden die bisherigen sowie die zukünftigen Gesamtkosten der Beteiligung Deutschlands am Krieg in Afghanistan geschätzt. Es handelt sich hierbei um eine Berechnung mit zahlreichen Unsicherheitsfaktoren, die auf mehreren wichtigen Annahmen basiert. Es werden verschiedene mögliche Szenarien bezüglich Dauer und Intensität der deutschen Beteiligung am Krieg in Afghanistan berücksichtigt. In einem realistischen Szenario, in dem Deutschland noch einige Jahre in Afghanistan präsent bleibt, schätzen wir die Gesamtkosten der deutschen Beteiligung am Krieg in Afghanistan auf 26 bis 47 Milliarden Euro. Sollte sich Deutschland dazu verpflichten, das Engagement in Afghanistan auszuweiten, und mit stärkerem Widerstand konfrontiert werden, stiegen die Kosten erheblich an. Falls sich Deutschland hingegen 2011 aus Afghanistan zurückzieht, belaufen sich die Gesamtkosten der deutschen Beteiligung am Afghanistankrieg auf 18 bis 33 Milliarden Euro. Diese großen Kostenspannen sind den Unsicherheitsfaktoren zuzuschreiben, auf deren Grundlage die Kosten geschätzt werden mussten. Unseren Schätzungen zufolge kostet jedes weitere Jahr, in dem Deutschland am Einsatz in Afghanistan teilnimmt, zusätzliche 2,5 bis 3 Milliarden Euro. Dies steht im Widerspruch zum offiziellen Kriegsbudget, das für das Jahr 2010 1 059 Millionen Euro beträgt.

GECC Project Paper 2/2009
"A Methodology for the Calculation of the Global Economic Costs of Conflict" (PDF, 142.9 KB) by Olaf J. de Groot
Abstract: There is a substantial body of research on the calculation of the costs of conflict, but so far no satisfactory methodology has been proposed that is able to combine all potential channels in one single analysis. This paper uses the existing literature and its problems to propose a methodology for doing so. The specific problems addressed in this study include the measurement of welfare, the imputation of missing data, the validity of the econometric techniques used in the estimation of conflict costs, the differentiation of existing conflict databases and the possibility of both direct and non-direct effects.
These challenges are described in detail in this paper and a comprehensive methodological roadmap is proposed to be able to estimate the Global Economic Costs of Conflict. This contribution is an important continuation of our research agenda with regards to the calculation of the Global Economic Costs of Conflict.

DIW Berlin Discussion Paper 948 / 2009
"How Many Bucks in a Bang: On the Estimation of the Economic Costs of Conflict" (PDF, 168.43 KB) by Olaf J. de Groot, Tilman Brück, Carlos Bozzoli
Abstract: The estimation of the costs of conflict is currently receiving a lot of attention in the literature.
This paper aims to give a thorough overview of the existing literature, first by addressing the history of case studies that address conflict costs and second by looking at the existing body of cross-country analyses for conflict costs. In addition to the existing cross-country literature, a number of studies that only concern themselves with particular elements of conflict costs are included as well.
In the end, this paper combines the insights from these previous analyses to explore how much room there is to further improve the existing studies. Specific recommendations are given how to proceed with the development of the field of conflict cost measurement.



International Research Conference
The Global Economic Costs of Conflict

19-21 January 2011
DIW Berlin

Download the preliminary programme (PDF, 243.33 KB)

The German Institute for Economic Research (DIW Berlin), the German Foundation for Peace Research (DSF) and the Households in Conflict Network (HiCN) are organizing an nternational research conference on the costs of conflict and related themes. The purpose of this conference is to bring together researchers and to compare theoretical, empirical and methodological research focusing on the costs and consequences of violent conflict.
The deadline for submission of papers is 1 November 2010.
Please see the call for papers (PDF, 17.66 KB) for more information.

See pictures of the conference picture1 picture2

Workshop 2010

On the 1st and 2nd of February a workshop on "The Global Costs of Conflict" brought together around 45 people at DIW Berlin, mostly researchers and other academics, from more than 15 countries to present and discuss their findings and insights on the costs of conflict. The diverse backgrounds of both presenters and discussants, varying from economists and epidemiologists to political scientists and policymakers, made this a very inspiring interdisciplinary workshop. Our aim to come together not only to exchange ideas but also to develop new ones was therefore easily met in discussions on methodological issues, the identification and measurement of costs, and all kinds of different channels through which conflicts accrue costs, directly or indirectly, in the short or long run. The topics varied from theoretical contributions such as what conflicts to include in a global calculation to case and cross-country studies on trade, education, health, welfare, ethnicity, and migration outcomes caused through conflicts.
The great range of topics, approaches, and ideas presented in combination with the good organization and the cooperative and interactive atmosphere made this workshop a great success. 

Please see the programme of the Workshop here (PDF, 32.55 KB)Please click on the following links to access the papers presented at the workshop:

Session 1: Costs of Conflict

Javier Gardeazabal,  Methods for Measuring the Costs of Conflict (PDF, 103.47 KB)
Scott Gates, Human, Social and Economic Costs of Conflict (PDF, 0.75 MB)
Laia Balcells, Consequences of Warfare in Civil Wars: An Empirical Evaluation (PDF, 388.34 KB)” [co-authored by Stathis Kalyvas]

Session 2: Identification and Measurement

Lisa Chauvet, The Costs of Failing States and the Limits to Sovereignty (PDF, 124.34 KB)
Debby Guha-Sapir, “Estimating Conflict Affected Population: Methodological and Data Issues”

Session 3: Role of Ethnicity in Conflict

Sami Miaari, Ethnic Conflict and Job Separations (PDF, 0.7 MB)
Michele Valsecchi, Ethnic Diversity, Economic Performance and Civil Wars (PDF, 243.7 KB)

Keynote Speech

Gerald Schneider, “
Globalization and Political Violence (PDF, 0.77 MB)

Session 4A: Trade and Integration

Cosmas Kombat Lambini,  Forest Conflicts’ Influence on Local People’s Livelihoods: The Case of Conflicts Between Timber Companies and Farmers in the Mankranso District of Ghana (PDF, 0.93 MB)
Mahvash Saeed Qureshi, Trade and Thy Neighbour’s War (PDF, 1.17 MB)
Adama Bah, Civil Conflicts and Regional Integration Outcomes in Africa (PDF, 210.71 KB)

Session 4B: Education, Health and Welfare

Christine Valente, “Fetal and Child Health amidst Violent Civil Conflict”
Tushar Nandi, Conflict, Economic Shock and Child Labour in Palestine (PDF, 107.46 KB)
Philip Verwimp, Extended Household Welfare and Civil War: Evidence from Burundi (PDF, 222.11 KB)
Patrick Domingues, The Health Consequences of the Mozambican Civil War: An Anthropometric Approach

Session 5: Conflict Theory

Tilman Brück, “Violent Development”
Ewa Tabeau and Janek Zwierzchowski, The 1992-95 War in Bosnia and Herzegovina: Census-Based Multiple System Estimation of Casualties’ Undercount (PDF, 287.08 KB)
Magnus Hoffmann, “When the Underdog does not Lead: Endogenous Prize and Leadership in Contests (PDF, 265.2 KB)” [co-authored by Grégoire Grégoire Rota Graziosi]
Jorge Restrepo, “Estimating Life Expectancy Potential Gains and Lost Product by Violence Reduction in Selected Countries (PDF, 0.62 MB)” [co-authored by Brodie Ferguson and Adriana Villamarín]

Session 6: Migration and Conflict

Nathan Fiala, The Consequences of Forced Displacement in Northern Uganda (PDF, 365.74 KB)"
Peter Croll, “The Migration - Security Nexus - Challenges and Opportunities of African Migration to EU countries”
Inmaculada Serrano, Bringing Actors and Conflict into Forced Migration Literature: A Proposed Model of the Decision to Return (PDF, 332.05 KB)