Sep 18th 2014

The Economics of Violence

by Bjørn Lomborg

 

Bjørn Lomborg, a visiting professor at the Copenhagen Business School, is Director of the Copenhagen Consensus Center. 

"....domestic violence against women and children imposes a social cost of $8 trillion each year, making it a huge – and vastly underreported – global issue."

COPENHAGEN – What is the biggest source of violence in our world? With the brutal conflicts in Syria, Ukraine, and elsewhere constantly in the news, many people would probably say war. But that turns out to be spectacularly wrong.

Getting it right matters if we are to find cost-effective solutions to this and other global problems. Obviously, everyone would like to stop wars and violence, just as we would like to end poverty, hunger, and global warming, while providing education to all. But, given limited resources, the international community can only do so much. We have to prioritize, which is what an economic analysis of costs and benefits can do.

The international community is working on new development goals for the next 15 years, and the Copenhagen Consensus has asked some of the world’s leading economists to give their assessment of the smartest targets they can choose. Is reducing violence a goal worthy of resources that would otherwise be spent on, say, reducing hunger? And, if so, which forms of violence should be targeted?

A study by James Fearon of Stanford University and Anke Hoeffler of Oxford University’s Center for the Study of African Economies argues that societal violence – homicides and especially violence against women and children – is a much bigger problem than civil wars. Nine people are killed in interpersonal violence for every battlefield death in a civil war, and one child is killed for every two combatants who die.

In 2008, there were 418,000 homicides around the world, with far too many countries recording a murder rate of more than 10 per 100,000, which the World Health Organization regards as an epidemic. A single homicide in America costs the individual and society $9.1 million. If we scale this by national income across the world, this single category of violent crime costs 1.7% of global GDP.

Of course, this is not a direct financial loss to the global economy, but a way of expressing the impact. If murders could be eliminated, societies around the world would be better off in ways that can be valued at 1.7% of GDP. Compare this to the much lower cost of civil wars, which are equivalent to about 0.2% of global GDP.

But this is still much less than the biggest source of violence of all: violence against women in the home. Based on studies published in Science, 28% of all women in Sub-Saharan Africa reported experiencing violence in the past year at the hands of their partners or family. This includes women subjected to beatings, forced marriage at an early age, sexual assault, “honor” crimes, and female genital mutilation. A conservative estimate puts the welfare cost of intimate partner violence alone at $4.4 trillion, or 5.2% of global GDP.

The second-largest source of violence is the abuse of children, 80% of which is inflicted by parents. The definition of what constitutes child abuse varies by culture; but about 15% of children suffer each month from what the UN calls severe physical punishment. This includes being slapped on the face, head, or ears, and a quarter of these children are beaten with some kind of implement repeatedly and as hard as possible.

Every month, some 290 million children endure such suffering. The welfare cost is $3.6 trillion, or 4.2% of global GDP.

A tiny fraction of international aid funding currently goes toward reducing societal violence and improving criminal justice systems. The enormous cost borne by society and individuals seems to cry out for action. Unfortunately, there is still little hard evidence about where resources should best be focused.

All we can say is that the money spent to reduce violence might be better targeted. Considerable amounts of aid are directed toward “fragile states” to help stop or prevent civil war, but only 0.27% of international aid goes to projects with a “crime prevention” component. Other programs may help in indirect ways, but there obviously is much room for improvement.

Some solutions, it is clear, do work very well. Stronger social services can reduce violence against children. Studies in Washington State show that home visits from trained staff can reduce child abuse, improve children’s quality of life and physical and mental health, and reduce child-welfare and litigation costs. A dollar spent on this program produces benefits of $14, making it a highly cost-effective policy.

In many cases, changes in social attitudes are needed. To reduce violence against women and girls, one program in Uganda, called SASA! (Kiswahili for “Now!”) promotes the view that partner violence is unacceptable, and has helped to halve the rate of it. This is a fantastic outcome, of course, though there has been no analysis of how cost-effective it is.

There are other examples of countries taking effective action. In 1993, Bogota suffered 80 murders per 100,000 people. By taking an integrated approach – limiting the hours during which alcohol can be sold, reclaiming public space, and improving the police and justice systems – the homicide rate was reduced to 21 per 100,000 in 2004. That is still high, but it is far below the rate of 55 per 100,000 in Detroit.

Alcohol is a factor in many assaults, and controlling its availability could have a significant part to play, as the findings in Bogota suggest. In the United Kingdom, a pilot study on stronger enforcement of existing rules showed that assaults could be reduced in a very cost-effective way, with the benefits outweighing the costs by 17 to one.

While we still don’t know enough, two points are certain. First, domestic violence against women and children imposes a social cost of $8 trillion each year, making it a huge – and vastly underreported – global issue. Second, there are solutions that can help to tackle some of these problems very cost-effectively. That is why reducing domestic violence belongs on the short-list for the world’s next set of development goals.



Copyright: Project Syndicate, 2014.
www.project-syndicate.org

 


This article is brought to you by Project Syndicate that is a not for profit organization.

Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.

Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.

 

 

Browse articles by author

More Current Affairs

Mar 18th 2024
EXTRACT: "....the UK’s current economic woes – falling exports, slowing growth, low productivity, high taxes, and strained public finances – underscore the urgency of confronting Brexit’s catastrophic consequences."
Mar 18th 2024
EXTRACTS: Most significant of all, Russia’s Black Sea fleet has suffered significant losses over the past two years. As a result of these Ukrainian successes, the Kremlin decided to relocate the Black Sea fleet from Sevastopol to Novorossiysk on the Russian mainland. Compare that with the situation prior to the annexation of Crimea in 2014 when Russia had a secure lease on the naval base of Sevastopol until 2042." --- "Ukrainian efforts have clearly demonstrated, however, that the Kremlin’s, and Putin’s personal, commitment may not be enough to secure Russia’s hold forever. Kyiv’s western partners would do well to remember that among the spreading gloom over the trajectory of the war."
Mar 8th 2024
EXTRACT: "As the saying goes, 'It’s the economy, stupid.' Trump’s proposed economic-policy agenda is now the greatest threat to economies and markets around the world."
Mar 8th 2024
EXTRACT: "Russia, of course, brought all these problems on itself. It most certainly is not winning the war, either militarily or on the economic front. Ukraine is recovering from the initial shock, and if robust foreign assistance continues, it will have an upper hand in the war of attrition."
Mar 8th 2024
EXTRACT: "...... with good timing and good luck, enabled Trump to defeat [in 2016] political icon Hillary Clinton in a race that appeared tailor-made for her. But contrary to what Trump might claim, his victory was extremely narrow. In fact, he lost the popular vote by 2.8 million votes – a larger margin than any other US president in history. Since then, Trump has proved toxic at the ballot box. " -----"The old wisdom that 'demographics is destiny' – coined by the French philosopher Auguste Comte – may well be more relevant to the outcome than it has been to any previous presidential election. "----- "Between the 2016 and 2024 elections, some 20 million older voters will have died, and about 32 million younger Americans will have reached voting age. Many young voters disdain both parties, and Republicans are actively recruiting (mostly white men) on college campuses. But the issues that are dearest to Gen Z’s heart – such as reproductive rights, democracy, and the environment – will keep most of them voting Democratic."
Mar 8th 2024
EXTRACTS: "How can America’s fundamentalist Christians be so enthusiastic about so thoroughly un-Christian a politician?" ---- "If you see and think outside the hermeneutic code of Christian fundamentalism, you might be forgiven for viewing Trump as a ruthless, wholly self-interested man intent on maximizing power, wealth, and carnal pleasure. What your spiritual blindness prevents you from seeing is how the Holy Spirit uses him – channeling the 'secret power of lawlessness,' as the Book of 2 Thessalonians describes it – to restrain the advent of ultimate evil, or to produce something immeasurably greater: the eschaton (end of history), when the messiah comes again."
Mar 1st 2024
EXTRACT: "The lesson is that laws and regulatory structures are critical to state activities that produce local-level benefits. If citizens are to push for reforms and interventions that increase efficiency, promote inclusion, and enable entrepreneurship, innovation, and long-term growth, they need to recognize this. The kind of effective civil society Nilekani envisions thus requires civic engagement, empowerment, and education, including an understanding of the rights and responsibilities implied by citizenship."
Feb 9th 2024
EXTRACT: "Despite the widespread belief that the global economy is headed for a soft landing, recent trends offer little cause for optimism."
Feb 9th 2024
EXTRACT: " Consider, for example, the ongoing revolution in robotics and automation, which will soon lead to the development of robots with human-like features that can learn and multitask the way we do. Or consider what AI will do for biotech, medicine, and ultimately human health and lifespans. No less intriguing are the developments in quantum computing, which will eventually merge with AI to produce advanced cryptography and cybersecurity applications."
Feb 9th 2024
EXTRACTS: "The implication is clear. If Hamas is toppled, and there is no legitimate Palestinian political authority capable of filling the vacuum it leaves behind, Israel will probably find itself in a new kind of hell." ----- "As long as the PLO fails to co-opt Hamas into the political process, it will be impossible to establish a legitimate Palestinian government in post-conflict Gaza, let alone achieve the dream of Palestinian statehood. This is bad news for both Israelis and Palestinians. But it serves Netanyahu and his coalition of extremists just fine."
Jan 28th 2024
EXTRACTS: "According to estimates by the United Nations, China’s working-age population peaked in 2015 and will decline by nearly 220 million by 2049. Basic economics tells us that maintaining steady GDP growth with fewer workers requires extracting more value-added from each one, meaning that productivity growth is vital. But with China now drawing more support from low-productivity state-owned enterprises, and with the higher-productivity private sector remaining under intense regulatory pressure, the prospects for an acceleration of productivity growth appear dim."
Jan 28th 2024
EXTRACT: "When Chamberlain negotiated the notorious Munich agreement with Hitler in September 1938, The Times did not oppose the transfer of the Sudetenland to Germany without Czech consent. Instead, Britain’s most prestigious establishment broadsheet declared that: “The volume of applause for Mr Chamberlain, which continues to grow throughout the globe, registers a popular judgement that neither politicians nor historians are likely to reverse.” "
Jan 4th 2024
EXTRACTS: "Another Trump presidency, however, represents the greatest threat to global stability, because the fate of liberal democracy would be entrusted to a leader who attacks its fundamental principles." ------"While European countries have relied too heavily on US security guarantees, America has been the greatest beneficiary of the post-war political and economic order. By persuading much of the world to embrace the principles of liberal democracy (at least rhetorically), the US expanded its global influence and established itself as the world’s “shining city on a hill.” Given China and Russia’s growing assertiveness, it is not an exaggeration to say that the rules-based international order might not survive a second Trump term."
Dec 28th 2023
EXTRACT: "For the most vulnerable countries, we must create conditions that enable them to finance their climate-change mitigation" ........ "The results are already there: in two years, following the initiative we took in Paris in the spring of 2021, we have released over $100 billion in special drawing rights (SDRs, the International Monetary Fund’s reserve asset) for vulnerable countries.By activating this “dormant asset,” we are extending 20-year loans at near-zero interest rates to finance climate action and pandemic preparedness in the poorest countries. We have begun to change debt rules to suspend payments for such countries, should a climate shock occur. And we have changed the mandate of multilateral development banks, such as the World Bank, so that they take more risks and mobilize more private money."
Dec 27th 2023
EXTRACT: "....if AI causes truly catastrophic increases in inequality – say, if the top 1% were to receive all pretax income – there might be limits to what tax reforms could accomplish. Consider a country where the top 1% earns 20% of pretax income – roughly the current world average. If, owing to AI, this group eventually received all pretax income, it would need to be taxed at a rate of 80%, with the revenue redistributed as tax credits to the 99%, just to achieve today’s pretax income distribution; funding the government and achieving today’s post-tax income distribution would require an even higher rate. Given that such high rates could discourage work, we would likely have to settle for partial inequality insurance, analogous to having a deductible on a conventional insurance policy to reduce moral hazard."
Dec 21st 2023
EXTRACT: "Shocks are here to stay, and our task is not to predict the next one – although someone always does – but to sharpen our focus on resilience. Staying the course of politically mandated policies while minimizing the inevitable dislocations is easier said than done. But that is no excuse to fall for the myth of being victimized by the unprecedented."
Dec 21st 2023
EXTRACTS: "A new world is indeed emerging. It will be characterized not only by more interdependencies, but also by more insecurity, danger, and war. Stability in international relations will become a foreign concept from a bygone age – one that we did not fully appreciate until it was gone."
Dec 14th 2023
EXTRACT: "Yet one must never forget that Putin is first and foremost an intelligence officer whose dominant trait is suspicion."
Dec 2nd 2023
EXTRACTS: "In a recent commentary for the Financial Times, Martin Wolf trots out the specter of a 'public-debt disaster,' that recurrent staple of bond-market chatter. The essence of his argument is that since debt-to-GDP ratios are high, and eminent authorities are alarmed, 'fiscal crises' in the form of debt defaults or inflation “loom. And that means something must be done.' ----- "If, as Wolf fears, 'real interest rates might be permanently higher than they used to be,' the culprit is monetary policy, and the real risk is not rich-country public-debt defaults or inflation. It is recession, bankruptcies, and unemployment, along with inflation." ---- "Wolf surely knows that the proper remedy is for rich-country central banks to bring interest rates back down. Yet he doesn’t want to say it. He seems to be caught up, possibly against his better judgment, in bond vigilantes’ evergreen campaign against the remnants of the welfare state."
Nov 27th 2023
EXTRACT: "The first Russia, comprising those living in Russia’s two biggest cities, Moscow and Saint Petersburg, can pretend there is no war at all." ---- "Then there is the other Russia, the one you find in small towns and villages scattered across the country’s massive territory. Here, the Ukraine war is a source of patriotic pride,"