Military Economy and Economic Growth: Bidirectional Effects in Transition Economies of Eurasia

Recently, the worrisome rise of military economy in Eurasian transition economies has raised concerns on what is behind this trend and what are its economic consequences. Based on the evidence from 26 Eurasian countries selected into two subgroups “Russia+10” and “15 Central and Eastern European” (CEE) countries over the period from 1991 to 2019, this article focuses on the military economy overview in this region and demonstrates the result of panel data estimations of bidirectional relation between military economy indicators and economic growth. The study shows that in “Russia+10,” military expenditures to GDP and to government spending have a positive effect on growth, and economic growth has a negative influence on these two indicators. Moreover, armed forces to labor forces have a positive bidirectional relation with economic growth in “Russia+10.” For the samples of “15 CEE” and all Eurasian countries, there are not always statistically significant results to offer clear conclusion on bidirectional effects between military expenditures to GDP and to budget expenses and economic growth. Armed forces to labor forces show a positive effect on growth in Eurasia and “15 CEE” countries.

Macroeconomic Factors Determining the Growth of Pakistan

This study attempts to explore the relation ofExternal Debt, Terms of Trade, Education,Military expenditures, Consumer Price Index, and GrossDomestic Production of Pakistan throughout 1997-2019. Toestimate the targeted objectives of this research AutoRegressive Distributive Lags (ARDL) technique was used. Theresults revealed some facts that Military expenditures andeducation were essential to achieve the goal of the high growthrate of the economy in the form of Gross Domestic Production.So policymakers should adopt strong strategies. Educationshould be as skilled and technical as possible and producemilitary equipment to save foreign exchange. CPI, TOT, andExd should be properly regulated because of their negativeimpact on GDP. CPI affects the people, so fiscal policy shouldbe adopted. Without external debt, governments feel helpless,so breaking this trap is essential for dignity and development.The model has a dampening convergence towards equilibrium

“COVID-19” Pandemic: Rethinking Defence Spending in Bulgaria

This paper investigates defence spending in Bulgaria in the context of the COVID-19 pandemic. It analyses military expenditures on both regional and national scales and tries to compare the post-financial and economic crisis period of the first decade of the 21st century to the current pandemic situation. The paper argues that it is unlikely that the ever evolving threat landscape will lead to a significant decrease in defence spending, while requiring its rethinking in Bulgaria with a focus on investments in technologies and related activities. Due to the ongoing pandemic and the fact that relatively little time has passed since its emergence, part of the conclusions drawn are primarily prospective in nature.

Natural Resources and Civil Conflict: The Role of Military Expenditures

Military expenditures significantly affect the relationship between the risk of civil conflict outbreak and natural resources. We show that a significant positive effect of natural resource rents on the risk of civil conflict outbreak is limited to countries with low military expenditures. In countries with high military expenditures, there is no significant effect of natural resource rents on civil conflict onset. An important message is thus that a conflict resource curse is absent in countries with sufficiently large military expenditures.

Military Economy

Chapter 4 is concerned with economic issues and is divided into three parts. The objective of the first is to comparatively analyze the six GCC states’ military expenditures. It begins with a brief review of contemporary Gulf economies, then compares the six monarchies’ defense outlays. The next section focuses on questions of weapons acquisition: how, from whom, what, and for what reason do they purchase—corresponding to the political-structural explanatory variables outlined above. The absence of substantive oversight engenders corruption in weapons deals and its effects on the militaries. In the last part the attention shifts to the Gulf armies’ arsenals, as I look at the issue of the compatibility of weapons with missions, the curious neglect of naval forces, and offer a brief discussion on maintenance and facilities. Finally, a relatively new development, the build-up of indigenous defense industries in Saudi Arabia and the UAE, is comparatively appraised.

Alliance Participation, Treaty Depth, and Military Spending

How does alliance participation affect military spending? Some argue that alliance membership increases military expenditures, while others contend that it produces spending cuts. I argue that deep formal defense cooperation modifies the impact of alliance participation on military expenditures and can explain increases and decreases in spending by small alliance members. Security-seeking junior members of deep alliances usually decrease military spending because these treaties are more credible. Joining shallow alliances often increases junior alliance member military spending, however. I test the argument by creating a latent measure of alliance treaty depth and using it to predict differences in how alliance participation affects military spending. The research design generates new empirical evidence linking alliance participation and percentage changes in state military spending from 1919 to 2007. I find that deeper alliance treaties tend to decrease military spending by junior alliance members, and shallow alliances often increase military spending. These results help scholars and policymakers better understand a central question about alliance politics that has been debated in scholarship for decades.

Empirical Analysis of Military Expenditures in NATO Nations

The aim of the article is to identify possible “follower” behaviour; it means to reveal countries following the average military burden of North Atlantic Treaty Organization (NATO) member states. To analyse the relationship between military expenditure of NATO member states and selected socio-economic variables (average military burden of NATO member states, gross domestic product, government expenditure (non-military), share of trade balance of gross domestic product and population), the Autoregressive Distributed Lag model has been used. The short-term results demonstrate follower behaviour, especially in the new NATO member states (effort to fulfil the commitment to spend 2% of gross domestic product on defence). The long-term results have revealed a positive relationship between military expenditures and the variable describing the average military burden of NATO member states in the traditional and also new NATO member states. A positive relationship between military expenditure and gross domestic product has also been observed in the majority of evaluated countries in the long-term model. The public good effect has been determined in six member states only, and the crowding out effect in five member states. A positive effect of the balance of trade on military expenditure has been observed in two countries only.

The Effects of Military Expenditures on Economic Growth and Inflation: Evidence from Turkey

The hypothesis that military spending affects economic growth and other aspects of the economy has been under scrutiny over the last decades. However, the macroeconomic impact of defense outlays is still an open question for researchers and policymakers. Aiming to contribute to the existing debate, this paper combines Keynesian with monetary theory and develops a discrete-time model that allows for potential fiscal-monetary coordination for financing the military sector in order to examine the effects of defense outlays on income and inflation. Τhe theoretical analysis suggests that military budget expansions can only have temporary effects on income, as in the long run, their impact on the economy is solely inflationary. However, the empirical findings associated with the economy of Turkey are not fully consistent with the theoretical conclusions of the specified model.