Militarization, Investment and Economic Growth 1995-2019: Initial Global Findings

Abstract

The economic effects of defense spending have attracted considerable attention in the literature. Invariably, the defense burden, i.e., the military spending to GDP (gross domestic product) ratio, is the variable through which these effects are empirically traced. In this article, an alternative measure that captures the burden on the economy and society from allocating resources to the defense sector is used—the Global Militarization Index (GMI), constructed by the Bonn International Centre for Conflict Studies (BICC). The empirical investigation covers a total of 116 countries and spans the period 1995–2019. The results reported herein do not reveal any systematic and statistically significant relation between a country’s militarization levels and two main macroeconomic variables (growth rate of GDP and gross fixed capital formation as a share of GDP).