PNG asked the World Bank to assess the social and economic costs of crime and violence as they related to business, citizens, government and civil society.
Eight out of 10 businesses surveyed in PNG said they suffered substantial losses and security costs as a result of high rates of crime and violence, slowing business expansion and hampering the country's economic development.
More than 80% of 135 companies surveyed said their business decisions are negatively influenced by the country's law and order issues, with crime increasing the cost of doing business.
The expense of avoiding criminal damage limits firms' ability to grow, deters start-ups, and imposes long-term social costs on the country, the report states.
Prime Minister Peter O'Neill said the report would be reviewed by the government as part of ongoing planning and policy development to continue to improve law and order in PNG.
"The World Bank statement makes note that crime has stabilised, while at the same time more work needs to be done," O'Neill said.
"We have made a commitment to the people and businesses of Papua New Guinea to improve law and order and we are meeting this challenge.
"There has been a decline in major crime over the past three years due to strong government policy on law and order that is supported through increased funding.
"This has seen the number of inmates at several prisons decrease by more than half, such as in Bomana where the inmates have been reduced from over 1,000 to around 450.
"The reduction in crime and decreased prison population clearly shows our youth are being given opportunity to engage meaningfully in education and employment opportunities.
"We will continue to build on this success."
O'Neill said action was underway in line with the report recommendations relating to central police engagement alongside improvements in social and community infrastructure, and the report will aid in the review of progress and to set future direction.
"At the policing level, improvements include enhanced training and additional resources used in core law enforcement duties, and better data collation and analysis for strategic and operational planning," he added.
"Through decentralisation initiatives, the government is better using local community knowledge and delivering programs around the nation to confront conditions and situations that can lead to crimes being committed.
"This includes activities to empower youth to gain skills and access employment, to strengthen community intervention, and undertaking dialogue to address the factors that contribute to criminal activity."