Friday, May 23, 2008

The Value of Peacekeepers

The authors reckon that countries affected by civil violence lose, on average, just over two percentage points of growth a year and take 14 years to get back to normal.

Taking all this into account, and adding a bit for extra military spending, the direct cost of a conflict in a typical developing country (whatever that is) comes to about $60 billion, the authors say. But most wars also envenom entire regions and exacerbate international scourges such as crime and terrorism.

So the authors give a “speculative” figure for the broader cost of each conflict: $250 billion. Since 1960, there have been two outbreaks of civil war a year, so what might be called the running cost of new conflicts in developing countries works out, on the authors' calculus, at somewhere between $120 billion and $500 billion a year. Even the lower figure is huge: about the same as the total amount of development aid doled out every year.

But reducing the risk of conflict more directly through peacekeeping is, the authors maintain, even better value for money. If the total cost of war to a country and its neighbours is $60 billion-$250 billion, then each percentage-point reduction in the risk of renewed violence is “worth” $600m-$2.5 billion. The authors calculate that if the world spent $8.5 billion on ten years of peacekeeping in a crisis-ridden country, that would reduce the risk of conflict by 30 points, which would be worth between $18 billion and $75 billion.
via The Economist

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