Wars have always been known to cause deaths, disrupt supply chains, and lead to losses in the industry and agriculture sectors. It is therefore evident that wars reduce economic performance. However, there are also positive economic aspects such as high defense spending and the so-called Phoenix effect, which sometimes leads to significant economic growth in the affected countries after the end of a war. Researchers from the International Security and Development Center (ISDC) have now examined how the economic balance of such conflicts is globally positioned.
According to their publication in the Journal of Peace Research, the study analyzed data on conflicts and economic development from 190 countries over the last 50 years. The study distinguishes between extraterritorial military interventions, civil wars, and wars within a country. The analysis shows that local conflicts not only weaken the economy of the affected countries but also the global economy. If there had been no wars in the world since 1970, the global gross domestic product (GDP) in 2014 would have been 12% higher, according to Tilman Brück.
The negative economic consequences of wars are therefore higher than the positive side effects of armed conflicts. Compared to other problems such as civilization diseases, wars have significantly burdened the global economy. Their negative effects are almost at the level of soil degradation and climate change and significantly higher than alcohol consumption and malaria. The economic consequences of wars are globally distributed differently. “Asia has suffered the most from the economic consequences of conflicts, while the rich regions in Europe, North America, and Oceania have benefited more from their participation in wars,” explains Brück. The economy in North America has benefited the most from wars. If there had been no armed conflicts since 1970, the economic performance there would have been $0.9 trillion lower. This is mainly due to wars outside their own country, which the U.S. has led. These wars stimulate local economic growth through high military spending.
The study shows that the effects of wars on the global economy have been underestimated. The researchers believe that these obstacles to economic growth have been too little considered and underestimated, both by economists and political scientists. Creating peace is undoubtedly one of the ways to stimulate global economic performance.
