Chapter 2 A method to compute a peace gross world product by country and by economic sector

Abstract

Purpose – The chapter reports on an attempt to compute the size of gross world product (GWP) under the assumption that all violence ceases.Methodology/approach – Spreadsheet-based simulations, given seed values taken from extensive literature review; this is done, for 2007, in nominal foreign exchange–based US dollars (USD) as well as in purchasing power parity (ppp)–based dollars (international dollars).Beneficial economic effects from more internal peace (nonviolence within countries) as well from external peace (nonviolence between and among countries) are calculated for each of 140 countries. In addition, we compute sectoral economic effects for the United States.Findings – For 2007, the simulations suggest that in a state of nonviolence the world economy could have been larger by 4.8 trillion dollars, or 8.7 per cent of actual GWP, when measured in nominal, foreign exchange–based USD, or by 6.0 trillion international dollars, or 9.2 per cent of GWP, when measured in purchasing power parity values.Limitations – The simulations are based on disparate values found in the literature to seed the spreadsheet calculations; various assumptions are made that would need to be confirmed through country- and sector-specific studies.Practical implications – Knowledge of the potential size of forgone economic benefits due to violence can assist to set out global violence reduction goals in order to achieve measurable economic results.Originality/value of chapter – To our knowledge this is the first attempt to calculate the size of the worldwide economic benefits forgone due to violence.