Trade-Offs between Military Spending, Quality of Life and Economic Growth

Abstract

To analyze the effect of military spending on the quality of life and economic growth, 101 countries are grouped by political system and economic conditions. Trade-offs between military spending and quality of life are correlated to peace, as manifested with the inception of the post-Cold War era, and tension, as featured by the Cold War period. Trade-offs between military spending and economic growth are absent for both the Cold War and post-Cold War periods, under any conditions of ethnic diversity, urbanization and population growth. Overall, regardless of the amount of defense burden countries shoulder, excessive population growth and ethnic heterogeneity were found detrimental to the quality of life and economic growth in both authoritarian and democratic countries during the time of tension or peace.