Financial Analysis of Peacekeeping
“Every time a conflict in some poor and chaotic place simmers down to the point where peace has a chance, rich countries with an interest in reconstructing that country face a choice: do they merely provide economic aid, or should they also dispatch troops - their own or other countreis’ - to nail down and enforce the peace?”
A cost-benefit financial analysis of the situation in a Copenhagen Consensus 2008 Challenge Paper (you can download it at the bottom of the Economist article) concludes that peacekeeping, doing the latter from above, makes sense. Here’s why..
Since 1960, there have been two outbreaks of civil war a year. A graph in the Copenhagen Consensus compares the number of new conflicts to the number of total conflicts, indicating some are ongoing and some are renewed. That is here..
Analysts conclude that we should concentrate on interventions which attempt to prevent the recently ended wars from reigniting.
The cost of a renewed conflict in a developing country is between $60 billlion (including mortality and morbidity effects) and $250 billion (taking into account the affect of conflict on entire regions and the exacerbation of crime and terrorism, the cost increases). Thus, since 1960, the running cost of conflict is between $120 billion and $500 billion a year.
The ideal security package, which the authors argue is post-conflict aid + military spending limits + peacekeeping + guarantees to militarily support democratic governments of countries, would cost about $10.8 B per year ($4.8b, $480m, $4b, $2b, respectively). The calculated payoffs would be security gains of $100b, increased GDP of $11b in the post-conflict countries, reduced coup risk of $6b, and fewer wars in democracies, worth $75b. The cost benefit ratio is therefore between 1:5 and 1:19. (The end of the doc has a summary of the costs & benefits under different discount rate and costs of war worth checking out.) Since “peace is a pre-condition for social and economic development,” based on the analysis, peacekeeping seems pretty worth it. Just one question - who’s footing the bill?
