The Missing Budget in International Relations
JaFaJ STRATEGIC PERSPECTIVE
IN-A-NUTSHELL
If you only have three minutes, here’s the central argument.
Governments spend trillions of dollars every year preparing for war, yet comparatively little preparing for what comes after the fighting stops. Nations maintain standing armies, intelligence agencies, cyber commands, logistics networks, and military reserve forces because they understand that preparation is less expensive than crisis. But when conflicts end, the international community often discovers it has no comparable system for financing, organizing, or implementing peace.
JaFaJ argues that this is one of the most overlooked weaknesses in modern national security policy.
Peace is not simply a humanitarian aspiration. It is a strategic capability and an economic investment. Successful diplomacy restores trade, lowers insurance costs, attracts investment, accelerates reconstruction, reduces refugee flows, and strengthens long-term regional stability. Yet governments rarely budget for mediation, peace implementation, or post-conflict recovery with the same discipline they apply to military preparedness.
This paper introduces several new strategic concepts—including the Peace Deficit, Peace Return on Investment (PROI), and Strategic Peace Capital—to encourage governments to measure peace readiness with the same rigor they measure military readiness. It also proposes a six-pillar JaFaJ Peace Architecture designed to institutionalize diplomacy, reconstruction, mediation, and peace implementation before crises occur rather than after they erupt.
The central question is straightforward:
If governments budget for every stage of war, why do so few budget for peace?
JaFaJ concludes that the defining strategic competition of the twenty-first century may not simply be over military superiority or economic dominance. It may be over which nations possess the institutions, financial capacity, diplomatic readiness, and political vision to transform military victories into lasting peace. Governments that prepare only to fight wars may win battles. Governments that prepare to build peace may shape the international order that follows.
EXECUTIVE SUMMARY
Every year, governments invest trillions of dollars preparing for war. They finance advanced weapons systems, intelligence networks, cyber defense, logistics, force readiness, and military modernization because they understand a fundamental principle of national security: preparation is less expensive than crisis. Yet when wars end, that principle is often abandoned. The international community routinely discovers that it has invested comparatively little in the institutions, personnel, financing, and planning required to secure and sustain the peace.¹
This contradiction represents one of the least recognized vulnerabilities in modern international affairs. Nations meticulously measure military readiness, but few systematically evaluate peace readiness. Standing armed forces are funded years in advance, while mediation teams, reconstruction financing, humanitarian coordination, governance planning, and post-conflict recovery mechanisms are frequently assembled only after violence has erupted.²
JaFaJ argues that this reactive approach is neither strategically sound nor economically efficient. Delayed investments in peacebuilding increase reconstruction costs, prolong humanitarian crises, discourage private investment, disrupt international trade, delay economic recovery, and heighten the risk that fragile ceasefires will collapse into renewed conflict. In economic terms, the world repeatedly pays a premium for preparing too late.
This paper advances a broader proposition. Peace should no longer be viewed solely as a diplomatic aspiration or humanitarian objective. It should be recognized as a strategic national security investment—one that generates measurable political, economic, and security returns for both the countries emerging from conflict and the international community that depends upon global stability.
For generations, governments have built sophisticated institutions to prepare for war.
JaFaJ believes the twenty-first century demands an equally disciplined commitment to preparing for peace.
THE MOST EXPENSIVE GOVERNMENT PROGRAM THAT DOESN’T EXIST
Every responsible government accepts a fundamental principle of national security:
Preparation costs less than crisis.
That principle explains why nations invest heavily in standing armed forces, intelligence agencies, cybersecurity, strategic stockpiles, logistics networks, military education, and long-term procurement programs. These capabilities are financed years—often decades—in advance because governments understand that responding after a crisis begins is almost always more expensive than preparing before one occurs.
Yet when armed conflicts end, that same principle is frequently abandoned.
Governments that meticulously plan for war often discover they have made comparatively little investment in preparing for peace.
Few maintain permanent mediation teams.
Few establish dedicated reconstruction funds.
Few budget for transitional justice, post-conflict governance, economic stabilization, humanitarian coordination, or the long-term diplomatic engagement required to transform fragile ceasefires into durable political settlements. Instead, these capabilities are often assembled only after violence has erupted, relying upon emergency appropriations, donor conferences, multilateral appeals, and ad hoc diplomatic initiatives created under intense political pressure.³
The consequences are both predictable and expensive.
Delays in organizing peace implementation prolong humanitarian crises, discourage private investment, slow the restoration of trade, increase reconstruction costs, weaken public confidence, and raise the likelihood that unresolved disputes will reignite into renewed conflict.
From a public finance perspective, this represents a remarkable contradiction.
Governments routinely budget for every stage of war—from deterrence and mobilization to combat operations and veterans’ care—but comparatively few budget systematically for the equally demanding process of securing the peace.
The international community has institutionalized the business of war.
It has yet to institutionalize the business of peace.
That distinction may represent one of the most significant—and costly—gaps in modern national security planning.
THE ECONOMICS OF PEACE
Peace is most often described as a humanitarian objective or a diplomatic achievement.
It should also be understood as an economic asset.
Wars destroy infrastructure, interrupt trade, displace labor, increase sovereign borrowing, elevate insurance costs, disrupt energy markets, discourage investment, and weaken public institutions. By contrast, durable peace reverses those dynamics. It restores confidence, reduces uncertainty, lowers transaction costs, and creates the conditions necessary for long-term economic growth.⁴
Every successful ceasefire generates measurable economic value.
Reopened shipping lanes reduce transportation costs and improve the reliability of global supply chains.
Secure borders facilitate trade, tourism, and cross-border investment.
Functioning ports restore commercial activity and government revenue.
Returning refugees expand the labor force, increase consumer demand, and reduce the long-term financial burden of humanitarian assistance.
The reconstruction of schools, hospitals, transportation networks, courts, utilities, and communications infrastructure creates employment while laying the foundation for sustained economic development.
The economic benefits extend well beyond the countries directly emerging from conflict.
Stable regions strengthen international supply chains, improve global energy security, reduce maritime insurance premiums, encourage foreign direct investment, stabilize financial markets, and lower the fiscal demands placed upon international humanitarian organizations. The dividends of peace are therefore shared not only by former adversaries, but by trading partners, investors, insurers, and consumers around the world.
Despite these measurable returns, governments rarely evaluate peacebuilding as they would any other strategic investment.
Infrastructure projects are assessed by expected economic growth.
Education is measured by improvements in human capital.
Scientific research is justified by innovation and productivity.
National defense is funded to deter future threats.
Peacebuilding, however, is seldom evaluated according to its long-term economic return.
This represents a significant gap in modern public policy.
JaFaJ argues that diplomacy should no longer be viewed solely as an instrument of foreign policy.
It should also be recognized as economic infrastructure—an investment that generates measurable returns through expanded trade, lower risk, increased investment, stronger institutions, and greater international stability.
The twenty-first century will not simply reward governments capable of financing war.
It will increasingly reward those capable of financing peace.
THE PEACE DEFICIT
Governments routinely measure fiscal deficits, trade imbalances, infrastructure shortfalls, housing shortages, labor market gaps, and investment needs because these indicators help policymakers identify risks before they become national crises.
Curiously, no comparable measure exists for one of the most consequential challenges confronting the international community:
The capacity to build and sustain peace.
JaFaJ describes this gap as the Peace Deficit.
JaFaJ Definition — Peace Deficit
The difference between the diplomatic, financial, institutional, legal, and human resources required to prevent, negotiate, implement, and sustain durable peace, and the resources governments actually commit before conflict occurs.
Unlike military weakness, peace deficits are rarely visible during periods of stability. They accumulate quietly over years as governments underinvest in diplomacy, mediation, reconstruction planning, conflict prevention, peace implementation, and the institutions responsible for transforming ceasefires into lasting political settlements.
The consequences become apparent only after violence erupts.
Governments suddenly discover shortages of experienced mediators, reconstruction specialists, humanitarian coordinators, legal experts, financial resources, governance capacity, and implementation mechanisms precisely when those capabilities are needed most.
By then, the opportunity for inexpensive prevention has largely disappeared.
History repeatedly demonstrates that rebuilding fractured societies costs far more than preserving stable ones. Every delayed investment in diplomacy increases the financial, political, and human costs of recovery. Every underfunded peace process raises the likelihood that fragile settlements will collapse into renewed conflict.
Like deferred maintenance on critical infrastructure, peace deficits compound over time.
Ignoring them does not eliminate the liability.
It simply increases the eventual cost of repayment.
JaFaJ believes governments should begin measuring peace deficits with the same discipline applied to fiscal sustainability, infrastructure resilience, and military readiness.
Because what is not measured is rarely managed.
And what is not managed eventually becomes a crisis.
THE RETURN ON DIPLOMACY
Governments routinely evaluate public investments according to their expected return.
Transportation infrastructure is justified by increased commerce and economic productivity.
Education is funded because it develops human capital and expands long-term economic opportunity.
Scientific research drives innovation, competitiveness, and technological advancement.
National defense is financed to deter aggression and reduce future security risks.
Every major public expenditure is expected to produce measurable strategic, economic, or societal benefits.
Diplomacy should be evaluated according to the same standard.
Successful mediation is not simply a political achievement.
It is an investment capable of generating substantial economic, financial, and strategic returns.
A peace initiative costing tens—or even hundreds—of millions of dollars may prevent conflicts that would otherwise consume tens of billions in military operations, humanitarian assistance, refugee support, infrastructure reconstruction, disrupted trade, higher insurance costs, and prolonged peacekeeping commitments.⁴
The financial implications extend well beyond the immediate parties to a conflict.
Every successful negotiation reduces uncertainty within international markets.
It restores investor confidence.
It strengthens supply chains.
It stabilizes energy markets.
It lowers transportation and maritime insurance costs.
It encourages foreign direct investment.
It accelerates economic recovery while reducing the long-term fiscal burden placed upon governments and international organizations.
From a public finance perspective, these are measurable returns.
Yet governments rarely calculate them.
JaFaJ proposes that diplomacy should be evaluated using a framework comparable to other forms of strategic public investment.
Accordingly, this report introduces the concept of Peace Return on Investment (PROI).
JaFaJ Definition — Peace Return on Investment (PROI)
The long-term economic, political, and security value generated by investments in conflict prevention, mediation, peace implementation, and post-conflict stabilization relative to the financial and diplomatic resources committed.
Under such a framework, governments would evaluate diplomacy not solely by whether negotiations succeed or fail, but by the broader value created through wars avoided, trade restored, infrastructure preserved, refugee movements reduced, investor confidence strengthened, reconstruction costs contained, and regional stability sustained.
The implications extend far beyond foreign policy.
If governments can calculate the return on infrastructure, education, scientific research, and defense spending, they should also be able to evaluate the return generated by successful diplomacy.
Because in the twenty-first century, one of the most valuable investments a nation can make may not be another weapons system.
It may be preventing the next war from occurring.
THE JaFaJ PEACE ARCHITECTURE
A Framework for Twenty-First Century Peace Readiness
For more than a century, governments have invested systematically in the institutions required to deter war, project military power, and defend national interests. Standing armies, intelligence services, logistics networks, reserve forces, and defense industries are now considered essential components of national security.
No comparable architecture exists for building peace.
Instead, mediation teams are assembled after crises erupt, reconstruction financing is sought after infrastructure has been destroyed, and diplomatic coalitions are often created only after violence has escalated beyond political control.
JaFaJ believes this reactive model is no longer sustainable.
If peace is essential to national security, economic stability, and international prosperity, then governments should prepare for peace with the same discipline, permanence, and institutional commitment that they devote to preparing for war.
Accordingly, JaFaJ proposes the development of a comprehensive Peace Readiness Architecture built upon six strategic pillars.
PILLAR I — NATIONAL PEACE BUDGETS
Governments should establish dedicated annual appropriations supporting conflict prevention, mediation, peace implementation, transitional governance, reconstruction planning, and post-conflict stabilization.
Preparing for peace should become a permanent budgetary responsibility rather than an emergency expenditure approved only after violence has erupted.
PILLAR II — DIPLOMATIC READINESS ASSESSMENTS
Military readiness is measured continuously.
Diplomatic readiness should be measured with equal discipline.
Governments should publish annual assessments evaluating their ability to organize negotiations, deploy experienced mediation teams, sustain long-term diplomatic engagement, coordinate coalition partners, and implement complex peace agreements.
What is not measured is rarely managed.
PILLAR III — NATIONAL MEDIATION CORPS
Every nation maintains trained military professionals prepared to respond rapidly during national emergencies.
Governments should develop comparable civilian capabilities.
Permanent National Mediation Corps should integrate diplomats, economists, intelligence analysts, constitutional lawyers, humanitarian specialists, military planners, development experts, financial professionals, and regional specialists capable of immediate deployment during emerging international crises.
Peace should never depend upon assembling expertise after conflict has already begun.
PILLAR IV — RECONSTRUCTION RESERVE FUNDS
History demonstrates that the period immediately following a ceasefire often determines whether peace succeeds or fails.
Governments and international institutions should establish standing reconstruction reserve funds capable of immediate activation following negotiated settlements.
Rapid investments in infrastructure, governance, justice systems, education, healthcare, and economic recovery frequently cost far less than managing renewed violence after fragile agreements collapse.
PILLAR V — COALITION MEDIATION FRAMEWORKS
Twenty-first century conflicts are increasingly too complex for any single government to resolve alone.
Future peace negotiations should rely upon permanent multinational mediation frameworks that combine:
- regional legitimacy;
- diplomatic credibility;
- economic capacity;
- security expertise;
- legal authority;
- humanitarian capability; and
- long-term implementation resources.
The future of peace diplomacy belongs not to individual mediators, but to integrated diplomatic coalitions.
PILLAR VI — INTERNATIONAL PEACE ACCOUNTABILITY
Governments routinely publish defense budgets, military expenditures, foreign assistance programs, and development spending.
Comparable transparency should exist for peace.
JaFaJ recommends annual public reporting measuring national investments in conflict prevention, mediation, reconstruction, peace implementation, and long-term stabilization alongside traditional national security expenditures.
Nations should be evaluated not only by what they spend preparing for war, but also by what they invest in preventing it.
FROM REACTIVE DIPLOMACY TO STRATEGIC PEACE READINESS
Collectively, these six pillars represent more than individual policy recommendations.
They form the foundation of a broader strategic proposition.
The international community has spent generations institutionalizing the business of war.
The twenty-first century should be remembered for institutionalizing the business of peace.
Military superiority will remain an essential component of national security.
Economic competitiveness will continue shaping geopolitical influence.
But the nations that invest systematically in diplomacy, mediation, reconstruction, and peace implementation will possess a strategic capability that many governments have yet to recognize.
The next generation of global leadership may ultimately be defined not by who can wage war most effectively, but by who is best prepared to build a durable peace when the fighting ends.
A NEW MEASURE OF NATIONAL SECURITY
For more than a century, governments have measured national security through familiar indicators: the size of their armed forces, the sophistication of their weapons, the resilience of their economies, the strength of their alliances, and their capacity to deter aggression.
These measures remain indispensable.
They are no longer sufficient.
The defining national security challenge of the twenty-first century may not be determining who can wage war most effectively, but who can prevent conflict from becoming permanent.
Military victories can remove immediate threats.
They cannot, by themselves, rebuild institutions, restore public trust, revive economies, return displaced populations, or transform ceasefires into durable political settlements.
Those responsibilities belong to diplomacy.
They require governments that are prepared not only to fight, but also to finance, organize, negotiate, implement, and sustain the peace that follows.
JaFaJ argues that this capacity constitutes a distinct form of strategic power.
This report defines that capability as Strategic Peace Capital.
JaFaJ Definition — Strategic Peace Capital
The institutional capacity, diplomatic credibility, financial preparedness, international partnerships, and operational experience that enable a nation to prevent conflict, negotiate durable settlements, implement peace agreements, and sustain long-term political stability.
Unlike military power, Strategic Peace Capital cannot be acquired quickly during a crisis.
It is accumulated over years through sustained investments in diplomacy, mediation, reconstruction planning, peace implementation, international partnerships, and the institutions that transform negotiated agreements into lasting stability.
Nations that consistently develop Strategic Peace Capital acquire advantages that extend well beyond traditional measures of national power.
They become trusted conveners during international crises.
They attract diplomatic partnerships.
They influence the design of post-conflict institutions.
They shape reconstruction priorities.
They strengthen international confidence.
And they help write the political architecture that emerges after war.
Military power may determine who prevails on the battlefield.
Economic power may determine who finances recovery.
Strategic Peace Capital may determine who shapes the international order that follows.
That distinction carries profound implications for governments, legislatures, finance ministries, defense planners, and international institutions alike.
If nations routinely budget for deterrence, mobilization, military readiness, veterans’ care, and post-war recovery, should they not also budget systematically for conflict prevention, mediation, reconstruction, and peace implementation?
JaFaJ believes the next evolution in national security policy is not simply stronger defense.
It is balanced preparedness—a national strategy that recognizes security depends upon two complementary capabilities:
The ability to prevail in war.
The ability to build peace.
The governments that master both will not simply respond to the international order.
They will help define it.
JaFaJ STRATEGIC QUESTIONS
Questions That Should Shape the Next Generation of National Security Policy
Every generation of policymakers inherits assumptions that eventually require reexamination.
For much of the twentieth century, governments asked how to deter wars, how to win wars, and how to defend against wars.
The twenty-first century demands a different set of questions.
JaFaJ believes the international community has devoted extraordinary intellectual, political, and financial resources to understanding the economics of war, while giving comparatively little attention to the economics of peace.
If that imbalance continues, governments may discover they have perfected the ability to manage conflict while neglecting the institutions required to end it.
Accordingly, JaFaJ offers the following strategic questions—not as conclusions, but as invitations for policymakers, legislators, economists, military planners, diplomats, and international organizations to reconsider the architecture of modern national security.
Should governments publish annual Peace Budgets alongside defense budgets, allowing taxpayers and legislatures to evaluate investments in conflict prevention, mediation, reconstruction, and long-term stability with the same transparency applied to military spending?
Should ministries of finance calculate the economic return on diplomacy in the same manner they evaluate investments in transportation infrastructure, public health, scientific research, and national defense?
Should every major nation maintain a permanent National Mediation Corps—trained, funded, and prepared for rapid deployment—just as they maintain military reserve forces prepared for national emergencies?
Should international organizations establish measurable standards for Peace Readiness, enabling governments to assess whether they possess the institutional capacity to negotiate, implement, and sustain durable peace agreements before crises emerge?
Should national security strategies include measurable indicators for conflict prevention, diplomatic readiness, reconstruction capacity, and peace implementation alongside traditional assessments of military capability and deterrence?
Should governments begin measuring Strategic Peace Capital with the same discipline used to evaluate military readiness, economic resilience, technological competitiveness, and alliance strength?
Should peace implementation become a permanent national security function rather than an improvised international response assembled after violence has already occurred?
Most importantly, have governments spent the past century preparing to win wars while failing to prepare adequately to win the peace?
That final question may prove to be the most important.
History demonstrates that military victories do not automatically produce political stability.
Conflicts may end on the battlefield, but lasting peace is built through institutions, investment, diplomacy, governance, and sustained political commitment.
JaFaJ believes the next generation of global leadership will be judged not only by the strength of a nation’s armed forces, the size of its economy, or the sophistication of its technology.
It will also be judged by whether it possesses the vision, institutions, financial commitment, and political will to transform military success into enduring peace.
The twenty-first century may ultimately reward those governments that become not only the world’s strongest defenders—
but also its most effective builders of peace.
FOOTNOTES
- Stockholm International Peace Research Institute (SIPRI), Trends in World Military Expenditure, latest annual report; International Institute for Strategic Studies (IISS), The Military Balance (London: Routledge, latest edition).
- United Nations, Secretary-General’s Peacebuilding Fund Strategy; United Nations Peacebuilding Commission, official reports on sustaining peace.
- United Nations Department of Political and Peacebuilding Affairs, Guidance for Mediation; World Bank, Pathways for Peace: Inclusive Approaches to Preventing Violent Conflict (Washington, DC: World Bank, 2018).
- World Bank, Pathways for Peace; Organisation for Economic Co-operation and Development (OECD), reports on the economic impact of conflict and peacebuilding; United Nations Development Programme (UNDP), publications on post-conflict recovery and economic resilience.