The world stands at a crossroads, with more than 50 state-based armed conflicts currently raging worldwide — a distressingly high record in the post-World War II era.
While some conflicts dominate headlines, others remain largely overlooked. Some are recent, others have persisted for decades, and some are now at the very doorstep of the European Union.
Effective peace-building in any country depends not only on domestic factors, such as robust institutions and sound economic policies, but also — and most critically — on international factors, with multidimensional global collaborations and a rules-based international order becoming increasingly vital for ensuring peace.
I argue that the promotion of peace can be fostered across three key levels: multinational firms, states, and the international community. The coordination at all three of these levels is of paramount importance to reduce the risk of war.
In this context, Europe plays a pivotal role, not only as the host of numerous multinational headquarters, but also as a powerhouse in international trade. And last, but not least, it remains a global epicenter of democracy and of a rule-based international order.
Although multinational firms lack a formal political mandate, their impact on political matters should not be underestimated. Numerous studies have shown that multinationals’ activities in the primary sector, such as fossil fuel extraction and mining, can pose significant risks to peace and political stability.
For example, estimates suggest that over a fifth of recent armed conflicts in Africa are either motivated or funded by mining resources, a phenomenon often referred to as the 'resource curse'.
However, effective regulation of multinationals’ activities can make a substantial difference.
For instance, despite its flaws and loopholes, the international regulations established by the Kimberley Process — aimed at uniting governments, civil society, and industry to curb the flow of conflict diamonds (rough diamonds used to finance wars) — has led to a significant reduction in violence in diamond-producing areas. This example should be followed and extended beyond other minerals and regions, and it demonstrates the urgent need for robust global regulation of multinational firms.
The trade policies of states play an important role in peace-building. A classic argument is that economic interdependence between countries makes war prohibitively expensive, and therefore, less likely.
For instance, a conflict between the US and Canada or South Korea would be economically devastating due to their deep high-tech trade ties. This idea has underpinned initiatives like the European Coal and Steel Community, which helped prevent a new conflict in post-war Europe and eventually led to the creation of the EU.
However, while the general principle (and supporting statistics) suggests that international trade fosters peace, the reality is often more nuanced.
Different types of trade and potentially asymmetrical dependencies must be considered. Put simply, while international trade is preferable to economic isolationism, its pacifying effects weakens when one trade partner is significantly more dependent on the bilateral relationship than the other.
Such an imbalance has been claimed for the West’s relationship with China, as much of the Western world is heavily reliant on that country for consumer goods, electronics, and machinery.
Another significant caveat is the international trade in fossil fuels.
Recent studies have shown that revenues from fossil fuels not only sustain petro-states but also fuel civil wars and interstate conflicts. Accelerating the energy transition through international coordination is therefore essential — to foster and preserve peace as much as to protect the planet.
Finally, beyond multinational firms and states, some key policy issues are inherently global and cannot be determined by any single country.
One such issue is whether the international system is predominantly led by democratic states that uphold a rules-based order or by autocratic governments.
This fundamental aspect of the international system is perhaps most evident in the so-called 'Democratic Peace' theory. The idea that democracy fosters peace can be traced back to Immanuel Kant’s 1795 work Perpetual Peace and is strongly supported by modern statistical evidence.
While conflicts frequently occur between autocracies or between autocracies and democracies, wars between democracies are extraordinarily rare. One of the reasons is that democracies rarely go to war with one another because citizens who ultimately bear the costs are less inclined to support such conflicts.
This pattern suggests that strengthening democratic rights globally can help reduce wars in the long term, a crucial message when democracy worldwide faces significant challenges.
As we step into 2025, a year certain to bring its share of upheavals and challenges, here is a message for EU decision-makers and leaders: “There is no Plan B because there is no Planet B,” in the words of former UN secretary-general Ban Ki-moon.
Stopping and resolving armed conflicts while promoting peace must remain at the forefront of the global agenda.
Trade, a robust regulatory framework for multinationals, and the advancement of democracies are all powerful tools to achieve this goal.
This is a defining moment, and Europe has a unique responsibility to take the lead in this crucial effort, paving the way to a safer and more peaceful world for future generations.
Dominic Rohner is professor of economics at HEC Lausanne, University of Lausanne and the Geneva Graduate Institute. He recently published The Peace Formula (Cambridge University Press, 2024).
Dominic Rohner is professor of economics at HEC Lausanne, University of Lausanne and the Geneva Graduate Institute. He recently published The Peace Formula (Cambridge University Press, 2024).