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In their chapter, ‘A method to compute a peace gross world product by country and by economic sector’, Jurgen Brauer and John Tepper Marlin present a novel method to assess the economic value of peace, in both the domestic and international realms. This is not only a tool for assessing and forecasting the potential benefits of reduced violence, but it is an example of best social science practice in that by design it incorporates the best existing knowledge on the effects of peace. This approach combining meta-analysis with a novel integrating framework is quite promising. For the purposes of the book, it sets the stage nicely for the subsequent chapters by highlighting the big picture of expected welfare gains from peace, within a rigorous scientific context, rather than one of advocacy. Estimating the potential economic benefits of internal and international peace is also fundamental in understanding the potential economic incentives which might drive political and business leaders to avoid deadly conflict, and pursue peace.

Purpose – The main purpose is to provide ideas about an intellectual framework for considering the role of “economic factors” in conflict and to suggest some potentially useful future areas of research. I selectively reference some relevant findings from the other chapters in this volume.

Methodology/approach – This chapter is speculative, but raises important issues. It might seem that economic factors should be considered “hard” constraints on the dynamics of large-scale conflict and peace, whereas political factors are “soft.” I propose the opposite. I argue that we should consider political factors as causally primary and economic factors as contingent on them. I present statistical analyses that call into question some recent research on the apparent primacy of economic factors in international conflict.

Findings – These models challenge a strong belief in the primacy of a “capitalist peace” or “economic peace” over political factors such as democracy. But my purpose here is no more than to suggest that this is a promising area for further inquiry. Economic factors are of course hugely important, but they are filtered through norms and institutions, which are political creations. If the basic logic of my thinking holds, similar results would be obtained for studies of civil conflict initiation and escalation.

Originality/value of paper – This chapter raises the issue of the appropriate place of economic and political factors in understanding organized conflict at various levels of analysis. It suggests how the chapters in this volume help advance thinking about the relationship between economic factors and conflict in this context and provides some novel empirical results to suggest the plausibility of the argument that economic factors may be less theoretically fundamental than political ones.

The book includes a set of chapters primarily to investigate the link between economics and conflicts. Although the subject matter has been presented in some other volumes in this series, this book spans a wider area covering cross fertilisation of disciplines and the role of law and institutions. The cross-disciplinary approach is necessary because some pure economists are presenting their findings in the area of politics and international relations. Some contributors are asking the questions about the economic value of peace. For that purpose they are using sophisticated scientific methods to analyze domestic and international conflicts. A related specific question is asked about the cost saving by privatising military prisons rather than contracting. This substitution has implications in other areas such as contracting military operations at the time of war. Of course, this cost savings should be weighed against motivation of the soldiers to fight. The question of comparative cost also arises in the technology transfer of military goods without giving out sensitive information and at the same time, concerned about competition from indigenous capabilities of substitutions. This alternative will induce proliferation of arms capabilities of other countries.

Aditya Agrawal is a scholarship graduate from Bond University (2006, first class honors in Management Science) and the 2007–2008 summer scholar at the Strategic and Defence Studies Centre, Australian National University. He commenced work at the University College, Australian Defence Force Academy in June 2008 and is currently reading for his doctorate in military outsourcing. Previously he has worked with both the corporate sector and the government departments. He has published in scholarly journals and peer-reviewed conferences and was awarded the Best Paper Prize at the national Australian Conference on Information Systems (ACIS 2007).