Macroeconomics and Violence

This chapter considers macroeconomic aspects of violence. It moves beyond the usual focus on war to argue the economic importance of all forms and aspects of armed and unarmed violence. Violence refers to acts of self-harm, interpersonal violence, and collective violence. Self-harm includes suicide; interpersonal violence includes organized criminal violence as well as domestic and workplace violence. Collective violence generally denotes political entities that are in, or at risk of, internal or external violent conflict as well as those that are in an insecure postwar predicament or wracked by pervasive armed criminal violence. In the past these different aspects of violence have been studied by different academic disciplines, with political scientists and defense economists tending to study the causes, consequences, and, lately, potential remedies of large-scale collective violence; and criminologists, public health experts, and crime economists tending to study interpersonal violence and self harm. Recognizing the economic importance of all aspects of violence means that macroeconomic policy cannot be considered in isolation from microeconomic developments or from regional, sectoral, distributional, and other economic policies, nor from the social contexts in which violence takes place. The increasing complexity and interrelatedness of the various aspects of the economics of violence means that any discussion of the macroeconomic issues has to consider the cost of conflict and violence more broadly conceived. The chapter reviews violence, measures and measurements of the cost of violence, the economic causes and consequences of violence, some macroeconomic aspects of recovery from violence and postwar reconstruction, and some of the necessary framework conditions for recovery from violence.