Economic, political, and social determinants of peace

Although quite a lot is known about the economics of war and conflict, rather less is known about the economics of peace. In this article we address the question: What are the major factors likely to lead countries toward peacefulness? We categorize these factors in three groups: economic, political, and socio-demographic, and test a set of hypotheses as to their influence using data for 2007 and 2008 covering more than 100 countries. Our results show that all three groups of factors play some part in contributing toward peacefulness in a country. In particular, among the economic factors we find that the most important influence is exerted by the openness of the economy. Political factors also emerge as significant, indicating that a properly constituted well-functioning democratic system of governance free of political corruption is an important requirement for the achievement of a peaceful society.