scholarly journals War and military spending in developing countries and their consequences for development

2006 ◽  
Vol 1 (1) ◽  
Author(s):  
Paul Collier
Keyword(s):  
Developing Countries ◽  
Growth Rates ◽  
Military Spending ◽  
Military Expenditure ◽  
Internal Conflict ◽  
Effective Deterrent ◽  
Policy Challenge

That military expenditure and conflict have adverse consequences for development is unsurprising but important. The policy challenge is to reduce them. I have suggested that substantial components of military expenditure could be reduced without jeopardizing security interests. Military expenditure does not appear to be an effective deterrent of rebellion, and, if it is reduced in a coordinated manner across a region then external security interests would be unaffected. The resources released by reduced military expenditure could be used to increase growth rates, and this in turn would gradually but effectively reduce the risk of internal conflict. Development, not military deterrence, is the best strategy for a safer society.

scholarly journals Military spending, armed conflict and economic growth in developing countries in the post-Cold War era

2017 ◽  
Vol 44 (1) ◽  
pp. 47-68 ◽  
Author(s):  
Nusrate Aziz ◽  
M. Niaz Asadullah
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Cold War ◽  
Military Spending ◽  
Military Expenditure ◽  
Internal Conflict ◽  
Content Type ◽  
Post Cold War ◽  
Fixed And Random Effects ◽  
The Relationship

Purpose While the relationship between military expenditure and economic growth during the Cold War period is well-researched, relatively less is known on the issue for the post-Cold War era. Equally how the relationship varies with respect to exposure to conflict is also not fully examined. Therefore, the purpose of this paper is to investigate the causal impact of military expenditure on growth in the presence of internal and external threats for the period 1990-2013 using data from 70 developing countries. Design/methodology/approach The main estimates are based on the generalized method of moments (GMM) regression model. But for comparison purposes, the authors also report estimates using fixed and random effects as well as pooled cross-section regressions. The regression specification accounts for non-linear effect of military expenditure allowing for interaction with conflict variable (where distinction is made between external and internal conflict). Findings The analysis indicates that methods as well as model specification matter in studying the effect of military spending on growth. Full sample estimates based on GMM, fixed, and random effects models suggest a negative and statistically significant effect of military expenditure. However, fixed effects estimate becomes insignificant for low-income countries. The effect of military spending is also insignificant in the cross-sectional OLS model if conflict is not considered. When the regression model additionally controls for conflict, the effect of military spending conditional upon (internal) conflict exposure is significant and positive. No such effect is present conditional upon external threat. Research limitations/implications One important limitation of the analysis is the small sample size – the authors had to restrict analysis to 70 low and middle-income countries for which the authors could construct post-Cold War panel data on military expenditure along with information on armed conflict exposure (the later from the Uppsala Conflict Data Program, 2015). Originality/value To the best of the author’s knowledge, this is the first paper to examine the joint impact of military expenditure and conflict on economic growth in post-Cold War period in a sample of developing countries. Moreover, an attempt is made to review and revisit the large Cold War literature where studies vary considerably in terms findings. A key reason for this is the somewhat ad hoc choice of econometric methods – most rely on cross-section data and rarely conduct sensitivity analysis. The authors instead rely on panel data estimates but also report results based on naïve models for comparison purposes.

scholarly journals Investment, growth, and defense expenditure in the EU15: Revisiting the nexus using SIPRI’s new consistent dataset

2016 ◽  
Vol 11 (2) ◽  
Author(s):  
Christos Kollias ◽  
Suzanna-Maria Paleologou
Keyword(s):  
Growth Rates ◽  
Vector Autoregression ◽  
Military Spending ◽  
Military Expenditure ◽  
Macroeconomic Variables ◽  
Previous Version ◽  
Defense Expenditure ◽  
Investment Spending ◽  
Investment Growth ◽  
Panel Vector Autoregression

Using SIPRI’s new consistent database on military expenditure and employing a panel vector autoregression (PVAR) methodology, the article investigates the nexus between military expenditure and two key macroeconomic variables, namely growth rates and investment spending for the case of the EU15 countries over the period 1961–2014. The findings reported herein do not support the effective demand stimulation argument for military spending. Thus, they broadly confirm the results of earlier studies for the EU15 that used the previous version of the SIPRI dataset.

scholarly journals How Do Budget Deficits and Economic Growth Affect Reelection Prospects? Evidence from a Large Panel of Countries

2008 ◽  
Vol 98 (5) ◽  
pp. 2203-2220 ◽  
Author(s):  
Adi Brender ◽  
Allan Drazen
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Fiscal Policy ◽  
Growth Rates ◽  
Electoral System ◽  
Developed Countries ◽  
Economic Conditions ◽  
New Democracies ◽  
Budget Deficits ◽  
Large Panel

We test whether good economic conditions and expansionary fiscal policy help incumbents get reelected in a large panel of democracies. We find no evidence that deficits help reelection in any group of countries independent of income level, level of democracy, or government or electoral system. In developed countries and old democracies, deficits in election years or over the term of office reduce reelection probabilities. Higher growth rates over the term raise reelection probabilities only in developing countries and new democracies. Low inflation is rewarded by voters only in developed countries. These effects are both statistically significant and quite substantial quantitatively. (JEL D72, E62, H62, O47)

Turkey in Crisis: Some Contradictions in the Kemalist Development Strategy

1983 ◽  
Vol 15 (1) ◽  
pp. 47-66 ◽  
Author(s):  
Özay Mehmet
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic System ◽  
Development Strategy ◽  
Growth Rates ◽  
Political System ◽  
Political Crisis ◽  
Half Century ◽  
The Right

The recent crisis in Turkey has been described primarily as a political crisis caused by an unworkable political system under attack from organized terrorism from both the right and the left. While this may be valid as an immediate cause, there are some structural and ideological contradictions in the Turkish economic system which must also be highlighted. These contradictions have evolved gradually over the last half century in the course of Turkey's efforts to achieve industrial and economic growth. They have been exacerbated in particular by a process of lopsided industrialization after 1960 which, as in most other developing countries, has resulted in increased poverty and unemployment while achieving overall growth rates of 6 percent or better.

The Impact of Military Spending on Economic Development

2018 ◽  
pp. 182-191
Author(s):  
Saptarshi Chakraborty
Keyword(s):  
Economic Growth ◽  
Causal Effect ◽  
Large Fraction ◽  
Military Spending ◽  
Military Expenditure ◽  
Policy Debate ◽  
External Threats ◽  
The Cost ◽  
The Military ◽  
The Impact

Some countries spend a relatively large percentage of GDP on their militaries in order to preserve or secure their status as global powers. Others do so because they are ruled by military governments or aggressive regimes that pose a military threat to their neighbors or their own populations. It is debatable whether there is a causal relationship between military spending and economic growth in the economy. It is again a policy debate how much to allocate funds for civilian and how much for military expenditure. Under these puzzling results of the impact of military expenditure on economic growth which is frequently found to be non-significant or negative, yet most countries spend a large fraction of their GDP on defense and the military. The chapter tries to investigate the relationship between military spending and economic growth in India. It also sees whether external threats, corruption, and other relevant controls have any causal effect. This chapter obtains that additional expenditure on Indian military in the presence of additional threat is significantly detrimental to growth implying that India cannot afford to fight or demonstrate power at the cost of its development.

scholarly journals New Evidence for Romania Regarding Dynamic Causality between Military Expenditure and Sustainable Economic Growth

2020 ◽  
Vol 12 (12) ◽  
pp. 5053 ◽  
Author(s):  
Ran Tao ◽  
Oana Ramona Glonț ◽  
Zheng-Zheng Li ◽  
Oana Ramona Lobonț ◽  
Adina Alexandra Guzun
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Structural Changes ◽  
Private Investment ◽  
Military Spending ◽  
Military Expenditure ◽  
Crowding Out ◽  
Annual Growth Rate ◽  
Sustainable Economic Development ◽  
Sustainable Economic Growth

Military spending and sustainable economic development have been widely discussed in recent decades. Especially in Romania, the defense budget is valued at $4.8 billion, registering a compound annual growth rate (CAGR) of 23.57%. It is also expected to reach $7.6 billion in 2023, according to a report by Strategic Defense Intelligence. There is no consensus in current research and less attention is paid to Eastern European countries. Considering the significant increase in military spending in Romania in recent years, as well as the occurrence of political events, this paper focuses on the dynamic causal relationship between military spending and sustainable economic growth in Romania. The bootstrap rolling window causality test takes into account the structural changes, and therefore, provides more convincing results. The results indicate negative effects of military expenditure on sustainable economic growth between 1996–1999 and 2002–2004. It can be attributed to the crowding-out effect of public expenditure on private investment. The positive effect between the two variables analyzed is noticed with the accession of Romania to the North Atlantic Treaty Organization. Conversely, it is found that economic growth does not have a significant effect on military spending in Romania. Policymakers should guard against the crowding out of private consumption and investment due to excessive military spending and ensure to increase military expenditure on the premise of sustainable economic development.

The Demand for Military Spending in Developing Countries

2003 ◽  
Vol 17 (1) ◽  
pp. 23-48 ◽  
Author(s):  
Paul Dunne ◽  
Sam Perlo-Freeman
Keyword(s):  
Developing Countries ◽  
Military Spending
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