Post-2015 Consensus: Conflict and Violence Perspective, Blomberg
My purpose in this perspective paper is to estimate benefit-cost ratios for the various targets proposed by Fearon and Hoeffler. I estimate most of the targets to be in the FAIR to GOOD range. The authors have done a remarkable job in cataloguing various forms of violence, their costs and benefits of existing programs. However, one notable weakness is the inability to provide systematic BCRs.
If I could obtain estimates of the benefits of reduced violence, the cost of aid and the elasticity of aid effectiveness on violence, I could estimate the various BCRs, but this is not a simple task. The authors’ reluctance to follow this route is understandable, since such an exercise may be highly speculative.
Fearon and Hoeffler’s estimates of the benefits of a world without violence – 11% of GDP for low and middle income countries – are consistent with what one might expect. I assume that the elasticity of aid effectiveness is similar to that for other areas, reducing poverty and encouraging growth and development, for example. The typical estimate of elasticity is 0.01, but I use both this and a more recent, but still small, estimate of 0.03.
The costs of violence differ dramatically with its type and the region. The welfare costs are largest for child abuse and female violence by intimate partners. Latin America and the Caribbean the Middle East and North Africa and sub-Saharan Africa are the areas with the greatest potential for benefits.
The ratio of the cost of aid to the potential benefits is significantly large. Using the authors’ measures, the ratio is greater than 30 on average and is as large as 98 in Europe and Central Asia. It is smaller in Sub-Saharan Africa and other regions because there is such a significant commitment to aid in these regions. Using the elasticities from the literature, the BCRs fall below 1 for measures to curb violence on a global basis. However, individual regions fare better, particularly Europe and Central Asia and the Middle East and North Africa, where the estimates are between 1 and 3.
Looking at each sub-category of violence, BCRs are again relatively small. However, both stemming child abuse and female violence have ratios in the range 0-8 for a conservative elasticity of 0.01. For the less conservative assumption of an elasticity of 0.03, these rise to 20-25.
In the future, it would be valuable for policy-makers to adopt the approach that the World Bank and others have taken with regards to certain policies. This approach has been to conduct experiments in targeted areas. If policy-makers are really interested in best evaluating these issues, then they can only be really understood using such a methodology. This may be costly and challenging to implement but it would go a long way to helping our understanding.