The global economic cost of war and violence is equivalent to $14.8 trillion in 2017, or 12.4% of global GDP.

Calculating the Global Economic Cost of War and Violence

Recent research by the Institute for Economics & Peace (IEP) is showing peacefulness is declining, while the reported economic cost of war and violence have never been higher, a finding that is gaining recognition at the highest levels of US government.

Today’s release of the Economic Value of Peace report by the Institute for Economics & Peace shows that the global economic cost of violence is at its highest level on record.

The global economic cost of war and violence is equivalent to $14.8 trillion in 2017, or 12.4% of global Gross Domestic Product (GDP).

The report brings the economics of existing conflicts and violence into focus following the 2018 Global Peace Index, which showed global peace reduced by 0.27% in the last year, the fourth successive year of decline.

It estimates the economic impact of violence for 163 countries and independent territories, covering 99.5% of the global population.

Violence generates substantial economic costs for individuals, communities and nations, in addition to social and political impact.

Interpersonal violence leads to short-term medical, policing and judicial costs and has long-term implications for work productivity and the economy. Social unrest and warfare costs and destabilises governments and reduces business confidence.

US government introduces new policy to control global conflict


Earlier this year, the US House of Representatives Foreign Affairs Committee recognised the original peace economics of IEP while introducing a new bill to curb conflict around the world.

The bipartisan Global Fragility and Violence Reduction Bill proposes a way for the United States to work towards reducing conflict overseas. In addition, it calls for more multilateral commitments to improve governance, inclusive development, and the protection of human rights.

Members of US congress cited IEP’s figure on global economic costs of violence and unprecedented levels of human displacement as motivation for the proposed law.

The staggering $14.8 trillion figure is a conservative measure of the economic cost of war and violence.

IEP’s modelling assesses 17 expenditure categories including both direct and indirect costs of war and violence such as spending on military and internal security or lost wages and productivity due to trauma.

Yet, the model excludes many areas of violence that cannot be assessed due to a lack of reliable data.

Areas that are not included in the model include:

  • domestic violence
  • household out-of-pocket spending on safety and security
  • the cost of crime to business
  • self-directed violence


Data for some violent crimes are inherently conservative because they are underreported, such as sexual assault and homicide.

In the pursuit of a more peaceful world, IEP’s research aims to inspire a shift in the way the world thinks about peace. Furthermore, we hope to encourage organisations and governments to foster more peaceful policies and practices.