The Economic Welfare Cost of Conflict: An Empirical Assessment
By Gregory D. Hess. Social Science Research Network, 2003
167 citations recorded by the source corpus.
War, whether external or internal, large or small, is a costly endeavor. Loss of life, loss of close friends or family, and the destruction of material possessions all play a part in the costs of war. The purpose of this paper is to capture only the material, economic welfare costs of conflict stemming from the altered path of consumption resulting from conflict. As such, the measure is quite a lower bound for the true and more encompassing welfare loss from living in a non-peaceful world. But how much would individual be willing to pay to avoid just the economic costs of conflict? Remarkably, even these pure economic welfare losses from conflict are quite large. I find that, on average, individuals who live in a country that has experienced some conflict during the 1960-1992 sample would permanently give up to approximately 8 percent of their current level of consumption to live in a purely peaceful world. Such large potential welfare gains from reducing warfare should make economists and policy-makers take note, and continue to investigate and advocate for domestic and international institutions to realize such gains.
Subfields: Economics and Econometrics, Soil Science
View Paper: https://www.semanticscholar.org/paper/0c78ef5971d703257781a9cf3142b9acd949c8b6
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Citations in the corpus
- Restraining the Genuine Homo Economicus: Why the Economy Cannot be Divorced from its Governance (2003, unknown): “More concretely, Hess and Pelz (2002) have recently attempted to put a lower bound on the direct welfare costs of con‡ict.”
- Economics of Conflict: An Overview (2006, background): “Such differences could, then, also account for the phenomenon of (financial, mobile) capital moving from poor 56 Hess (2003), for example, estimates the welfare costs of conflict coming from its effects on consumption alone for 147 countries spanning the period 1960–1992 to be on average 8 percent…”
- The Three Horsemen of Riches: Plague, War, and Urbanization in Early Modern Europe (2013, unknown): “Murdoch and Sandler, 2002; Hoeffler and Reynal-Querol, 2003; Hess, 2003). The main reason for this difference is that human capital is crucial for development today, while it was not in pre-modern times, when decreasing returns to (unskilled) labor in agriculture dominated the production pattern. In”