The Institute for Economics and Peace (IEP) is an independent, non-partisan, non-profit think tank dedicated to promoting a better understanding of the social and economic factors that develop a more peaceful society.
IEP achieves its goals by developing new conceptual frameworks to define peace; providing metrics for measuring peace; and, uncovering the relationship between peace, business and prosperity.
IEP has offices in Sydney, New York and Mexico City. It works with a wide range of partners internationally and collaborates with intergovernmental organisations on measuring and communicating the economic value of peace.
IEP’s ground-breaking research includes the Global Peace Index (GPI), the Global Terrorism Index (GTI), and a series of country-specific peace indices, including the Mexico Peace Index (MPI), United States Peace Index (USPI), and the United Kingdom Peace Index (UKPI).
When was IEP established and why?EP was established in 2008 in order to study the relationship between business, peace, and economic development and to provide tools for understanding and analysing the value of peace. IEP grew out of a key finding of the Global Peace Index (first published in 2007) – that there is a significant relationship between peacefulness and national wealth.
Peace is the focus of IEP’s research because it is an essential prerequisite to foster the economic, political, social, and cultural institutions which enable human potential to flourish. Without peace we cannot collectively achieve the levels of cooperation, inclusiveness, and social equity needed to solve the major global sustainability challenges facing humanity.
In spite of the evident importance of peace, it remains a poorly understood and nascent area of study in the social sciences. While there is a burgeoning literature on conflict and war, there is in fact comparatively little research on peace. IEP’s ambition is to go beyond crude measures of war and to systematically explore the drivers, determinants, and texture of peace. By establishing new conceptual frameworks to measure and quantify peace, IEP aims to facilitate future research to better understand the mechanisms that nurture and sustain peace. By doing so, we can help inspire and influence citizens and governments to positive action.
The Global Peace Index
The GPI is the leading objective measure of the relative peacefulness of the world’s nation states. It ranks 162 countries according to their levels of peace (defined, for this purpose, as the absence of violence) and provides several unique data metrics for identifying the presence of peace. The GPI is guided by an independent international panel of experts of scholars from leading academic and non-government institutions. It was launched in 2007 and is published annually.
The methodology of the GPI was developed through a three-tiered structure in order to ensure the independence and integrity of the Index. The choice of indicators and their weightings is overseen and continuously reviewed by the international panel of independent experts, in collaboration with IEP and the Economist Intelligence Unit, which collates and calculates the Index.
The GPI is composed of 23 qualitative and quantitative indicators from highly respected sources that measure both internal and external factors. All of the indicators are banded on a scale of 1-5 and qualitative indicators are scored by the Economist Intelligence Unit’s extensive team of country analysts.
The indicators are divided into three key thematic categories:
- 6 measures of ongoing conflict such as number of conflicts fought and number of deaths from organised conflict.
- 10 measures of societal safety and security such as number of displaced people, potential for terrorist acts, number of homicides, number of jailed population.
- 7 measures of militarisation such as military expenditure, number of armed service personnel, ease of access to small arms and light weapons.
The overall score is weighted 60% for internal peace and 40% for external peace. The closer the score is to ‘1’, the more peaceful the country is, with scores closer to ‘5’ indicating relatively less peace.
The GPI is then tested against a range of potential drivers or determinants of peace encompassing standards of governance and efficiency; the strength of formal and informal institutions and the political process; international openness; demographics; regional integration; religion and culture; and education and material well-being.
Scores are consequently subject to change as new data becomes available. As a result, country rankings and scores may change as the methodology is refined and estimates are updated. For this reason, country rankings may differ where comparisons are made across different years. The most up to date data can be found on the interactive Global Peace Index map on Vision of Humanity.
The GPI sources the latest available data from a wide range of international sources, including the International Institute of Strategic Studies, the World Bank, the Stockholm International Peace Research Institute, various UN entities, including the UN Office of Drugs and Crime, peace institutes, and Economist Intelligence Unit country analysts, among others.
The GPI informs the work and goals of a range of stakeholders. Governments use this tool to structure policy considerations, for tourism promotion, and for country branding. Academics look to the unique data sets for further research, to enhance existing work, and to integrate into university coursework. NGOs examine the GPI to inform their campaigns, help them select areas of focus for their program, and to evaluate risk. The private sector uses the GPI to identify the financial incentives of peace and to form industry alliances to positively influence government policy. The GPI is also a tool that can be used to further inspire philanthropic support of the study of peace.
IEP, the Economist Intelligence Unit, and the international panel of independent experts agreed that indicators should be weighted differently because each factor has subtlety variant contributions to peacefulness. For example, the outcome of an incidence of direct violence is given a greater weight than the society’s perception of criminality.
The international panel of experts rigorously debated the weightings and came to the agreement that internal drivers in reality have more bearing on peace than external drivers. The panel based this decision on the concept that peace begins at home and that nations more at peace within their own borders are less inclined to violence with neighbouring countries.
All indicators in the GPI are expressed quantitatively as a score between 1 and 5. However, for certain indicators, lack of data means determination of the rating requires a qualitative assessment. Each of qualitative measure is evaluated by an EIU country expert, which is then peer-reviewed by a regional team and checked by a global review team at the EIU. Finally, the qualitative scores are then separately reviewed by the international expert panel.
The Index does not seek to make value judgments about the efficacy or desirability of a particular level of military expenditure. The rankings in the GPI are based on a relative measure to other countries, not on an arbitrary or idealised level. As it is recognised that violent criminals may need to be incarcerated, it is also recognised that nations with violent neighbours may require a strong military to defend themselves.
The GPI provides an analytical base on which to consider the opportunity cost of spending under the defence umbrella. For instance, a very high percentage of military spending beyond the average of other countries will rate more poorly, while financial contributions to UN peacekeeping forces is rated positively.
The GPI does not place a moral or value judgment on where countries are ranked in the index. There can be many reasons why a country is ranked lower than another, and sometimes these are not dependent on the country itself but on the actions of its neighbours. The GPI measures the levels of peacefulness in order to be able to understand what leads to peace and further our understanding of peacefulness.
Countries are not included in the GPI either due to a lack of reliable data on the majority of the indicators, or (1) its population is less than 1 million and (2) its land mass is less than 20,000 square km. Including small countries of this size skews the results of the GPI.
The core 23 indicators do not include specific indicators measuring violence against women or children as there is no consistent, reliable data available for the 162 countries ranked in the GPI. However, there are various gender equality measures which correlate strongly with the GPI.
The GPI does not include a specific indicator measuring domestic violence as there is no reliable data available for the 162 countries ranked in the GPI.
No it does not. The GPI focuses on violence perpetrated by one person or state on another.
The GPI does not include a specific indicator measuring child abuse as there is no reliable data available for the 162 countries ranked in the GPI.
The GPI focuses on violence perpetrated by one person or state on another.
The 23 indicators that make up the GPI.
- Number and duration of internal conflicts
- Number of deaths from organised conflict (external)
- Number of deaths from organised conflict (internal)
- Number, duration and role in external conflicts
- Intensity of organised internal conflict
- Relations with neighbouring countries
- Measures of societal safety and security
- Perceived criminality in society
- Number of displaced people as a percentage of the population
- Political instability
- Political Terror Scale
- Terrorist activity
- Number of homicides per 100,000 people
- Level of violent crime
- Likelihood of violent demonstrations
- Number of jailed population per 100,000 people
- Number of internal security officers and police per 100,000 people
- Measures of Military expenditure as a percentage of GDP
- Number of armed services personnel per 100,000 people
- Volume of transfers (imports) of major conventional weapons per 100,000 people
- Volume of transfers (exports) of major conventional weapons per 100,000 people
- Funding for UN peacekeeping missions
- Nuclear and heavy weapons capability
- Ease of access to small arms and light weapons
The Global Terrorism Index
The Global Terrorism Index (GTI) ranks countries according to the impact of terrorist activities as well as analysing the economic and social dimensions associated with terrorism. It is a comprehensive measure that accounts for the direct and indirect impact of terrorism in 162 countries in terms of lives lost, injuries, property damage and the psychological after-effects of terrorism. This Index covers 99.6 per cent of the world’s population.
The indicators used include the number of terrorist incidents, fatalities, injuries and property damage. The GTI was developed in consultation with the GPI international panel of independent experts.
The GTI ranks 162 countries based on four indicators weighted over five years.
The four factors counted in each country’s yearly score, are:
- Total number of terrorist incidents in a given year
- Total number of fatalities caused by terrorists in a given year
- Total number of injuries caused by terrorists in a given year
- A measure of the total property damage from terrorist incidents in a given year
Each of the factors is weighted between zero and three and a five year weighted average is applied to reflect the latent psychological effect of terrorist acts over time. Terrorist attacks have a lingering effect on a society in terms of fear and subsequent security response. For instance, the scale of the 2011 terrorist attacks in Norway will continue to have a psychological impact on the population for many years to come. The greatest weighting is attributed to a fatality.
The GTI aggregates the most authoritative data source on terrorism today, the Global Terrorism Database (GTD) into a composite score in order to provide an ordinal ranking of nations on the negative impact of terrorism. The GTD is unique in that it consists of systematically and comprehensively coded data on domestic as well as international terrorist incidents and now includes more than 125,000 cases.
Defining terrorism is not a straightforward matter. There is no single internationally accepted definition of what constitutes terrorism, and the terrorism literature abounds with competing definitions and typologies. IEP accepts the terminology and definitions agreed to by the authors of the GTD, the National Consortium for the Study of Terrorism and Responses to Terrorism (START) researchers and its advisory panel. The GTI therefore defines terrorism as “the threatened or actual use of illegal force and violence by a non-state actor to attain a political, economic, religious, or social goal through fear, coercion, or intimidation.” This definition recognises that terrorism is notonly the physical act of an attack, but also the psychological impact it has on a society for many years after. In order to be included as an incident in the GTD the act has to be: “an intentional act of violence or threat of violence by a non-state actor.”
National Peace Indices
In April 2011, IEP released the United States Peace Index, ranking the 50 states according to five internal indicators. The second edition of the US Peace Index was released in April 2012.
In April 2013 the United Kingdom Peace Index (UKPI) was released.
The first Mexico Peace Index was released in 2013. The second edition was published in early 2015.
Economics of Peace
While the GPI links peace to prosperity, it also links peace to other factors. Economics and peace are not always in tandem — all the countries at the top of the GPI have high GDP per capita levels, however so do some near the bottom of the index. What has been clearly established is that a sound business environment is closely linked to a country’s peacefulness.
The GPI provides a framework to understand the relationship between peace, markets, costs, and profits, enabling companies to better understand their ‘risk and opportunity profile’ and business development opportunities.
While the GPI and related research shows that there is a tremendous economic opportunity with peace, the GPI can be used for policy, research, advocacy, and investment.
The GPI is not a forecasting tool as the majority of indicators are backward looking indicators which provide data on the existence of direct violence in countries. By understanding the prevalence of direct violence and conflict, it is possible to then measure the common structures and institutions which characterise peaceful societies.
Positive Peace is defined as the attitudes, institutions and structures which create and sustain peaceful societies. These same factors also lead to many other positive outcomes that support the optimum environment for human potential to flourish.
The distinguishing feature of IEP’s work on Positive Peace is that it has been empirically derived through statistical analysis. There are few known empirical frameworks available to analyse Positive Peace; historically it has largely been understood qualitatively and largely subject to value judgment.
In order to address this gap, IEP utilised several years of GPI data in combination with analysis from the existing literature in peace and development studies to statistically analyse what can be learnt from the most peaceful countries in the GPI. The practical starting point for this research is simply, ‘what do the most peaceful countries in the GPI have that those at the bottom don’t have?’ An important aspect of this approach is to derive these factors not through value judgement but by letting the statistical analysis, as best as possible, explain the key drivers of peace.
The “Pillars of Peace” represent a new conceptual framework for understanding and describing the factors that create a peaceful society. This framework has been derived from an empirical and statistical analysis of the GPI. Over 3000 cross- country datasets were used to define the key economic, political, and cultural determinants that foster the creation of a more peaceful society. The eight interdependent pillars are:
- Well functioning government
- Sound business environment
- Equitable distribution of resources
- Acceptance of the rights of others
- Good relations with neighbours
- Free flow of information
- High levels of human capital
- Low levels of corruption