The old myth that war is good for the economy has been thoroughly debunked and the economic benefits of peace are being increasingly recognised.
An example of this can be seen in research from the Institute for Economics and Peace (the brains behind Vision of Humanity) that shows levels of peace influence future GDP per capita.
While this link might be obvious in the extreme cases of civil war, most people aren’t aware of the notable gains in economic growth that lower levels of homicide, organised crime and violent crime can yield. Perhaps the best way to understand the relationship between peace and economic prosperity is by looking at the case of Mexico.
From 2003-2011 Mexico experienced an unprecedented increase in the level of violence as a result of the proliferation of the drug war and international criminal networks. The Mexico Peace Index, also from the Institute for Economics and Peace, shows that states that were more violent in 2003 tended to also experience lower levels of economic growth over 10 years.
The five most peaceful states in 2003 had 20% higher GDP per capita than the least peaceful states by the end of the decade.
States that were more peaceful had much higher per capita incomes. What is interesting about this trend is that the same thing happened when states within the same region were compared.
Another way of looking at the economic impact of violence in Mexico is the average GDP growth of the most peaceful states versus the least peaceful states since the beginning of the drug war.
The graph below shows the most peaceful states had more than double the rate of economic growth in 2011 than the least peaceful.
Click on a country on the interactive Global Peace Index map to see the annual economic impact of violence (on the left).
For a full break down of levels of peace in all 32 Mexican states, explore the interactive Mexico Peace Index map. To read a further analysis of the impact of violence in Mexico, see the Mexico Peace Index Report. And if you want to know more about the economic cost of violence and how we calculate it, see the Economic Cost of Violence Containment.Related Articles
The 2013 Mexico Peace Index Report analyses peace in Mexico over the last decade and identifies the key socio-economic factors associated with peace and violence.
The economic impact of violence containment in Afghanistan is equal to 21.2% of GDP, which is equivalent to US$205 per person.
The economic impact of violence containment in Iraq is equal to 14.9% of GDP, which is equivalent to US$815 per person.
The Economic Cost of Violence Containment, the latest report from the Institute for Economics and Peace, calculates the cost of violence in over 150 countries around the world.
Vision of Humanity is an initiative of the Institute for Economics and Peace (IEP). IEP have offices in New York and Sydney. For more specific inquiries related to the peace indexes and research, please contact IEP directly.