The RPN on Preventing Conflict: Policies for Peace, established in June 2019 for an initial three year term, is led by Dominic Rohner, Professor of Economics at the University of Lausanne and CEPR Research Fellow. The broad aim of the RPN is to help shape the policy debate on policies that can promote peace.
Why should economists care about conflict?
Armed conflict around the world imposes huge costs on societies and economies alike. The burden of war ranges from fatalities over economic costs to societal damage. One of the most immediate concerns and easiest cost to grasp is in terms of human suffering. According to Bae and Ott (2008), the conflict-related deaths in the 20th century alone accounted for over 100 million lives lost, out of which 60 percent were civilian non-combatants.
The economy of a war-torn country can be damaged in various ways. The physical destruction of the infrastructure not only takes a toll, but also the days spent fighting correspond to a loss in productive labour. Unsurprisingly, the economic costs of conflict are sizeable by any standards. Collier (2007) estimates war to reduce annual economic growth by on average 2.3 percentage points, leading to a total loss of 15 percent of GDP for the average war duration of 7 years, and to a total financial cost of $ 64 billion. Strikingly, even conflicts that result in a below-average death toll, like the separatist fight in Basque Country, can lead to very sizeable economic consequences. According to Abadie and Gardeazabal (2003), the comparison of the Basque GDP to a synthetic control group of comparable regions with similar characteristics but without violence, leads to the conclusion that Basque GDP would be 10% higher today in the absence of ETA’s armed fight.
Finally, conflict also imposes costs on the society. While the literature has found a clear-cut effect of conflict exposure during childhood on reducing human capital accumulation (e.g. Shemyakina, 2011), on harming psychological health (e.g. Barenbaum et al., 2004) and on increasing future crime propensity (Couttenier et al., 2018), the impact of conflict on social capital is more controversial (see e.g. Blattman, 2009; Bellows and Miguel, 2009; Rohner et al, 2013; Bauer et al., 2016).
In recent years there has been a surge in high-quality research on what actual policies can help to curb the risk of conflict. The aim of this RPN is to share these policy insights with a broad audience and spread promising cutting-edge research findings to policy makers and the media.