The economic costs of armed violence Going beyond the cost of armed conflict to states to focus on the burden for individuals and communities Multiple methods exist to estimate the cost of armed violence (modelling, contingent valuation, accounting methods) Efficiency and distribution effects

The accounting approach Direct costs medical & rehabilitation cost policing criminal justice system private security military expenditure refugees and displaced people physical destruction Indirect costs macroeconomic consequences (inflation, reduced savings, investment & exports losses) loss of development aid; wealth transfers from regular to parallel economies Intangible costs quality of life (pain, suffering, trauma) reduced access to job opportunities, schools & public services limited participation in community life inter-generational impacts Economic multiplier effects reduced productive activity productivity losses due to insecurity, limited mobility, a smaller workforce work hours lost & lower incomes lower accumulation of human capital Social multiplier effects loss of social capital intergenerational transmission of violence privatisation of policing reduced political participation

Examples of estimates Collier and Hoeffler 2004: $ 64 billion for average civil war using modelling method IANSA et al 2007: $ 18 billion annually cost of civil war using modelling Hess 2003: $ 400 billion global cost of armed conflict using willingness to pay SAS 2006: Sri Lanka estimated cost of armed conflict estimated at between % GDP (annual) UNDP 2006: cost of armed violence estimated at USD 2.4 million (7.3% GDP) in 2005

Measuring the cost of destruction Beirut’s Harek square before and after the 2006 conflict (UNEP 2007)

Policy opportunities: Economic cost of armed violence The impact of armed violence on economic performance underlines that crime and violence are a development issue and must be addressed as such Enlarge the evidence base by enhancing the methods to estimate the costly effects of armed violence Create a unity of perception of future losses to make them more tangible in the present though better measuring tools Get a better understanding of the distributions of cost at the regional and sub-national level Better identification who bears what burden at what point in time could foster constituencies for violence prevention and reduction