Effect Of Military Expenditure Research Articles

The Effect of Military Expenditure on Economic Prosperity in Croatia

The objective of this study was to empirically evaluate the impact of military spending on the economic well-being of the Croatian economy. The objective of the study was as well to find out if military expenditure could bolster the economic growth. Croatia has been among the European nations with significant military expenditures over the past three decades. However, these expenses have substantially decreased due to successful peace initiatives and the country's accession to the European Union. Reflecting on Croatia's history, notably during the Croatian War of Independence, the government significantly augmented its military expenditures. The sample period of the study was for 40 years from 1981 to 2020. An applied econometrics methodology called the 2-Stage Least Squares with Instrumental Variables was utilised in the study. In the first stage, instrumental variables were used to instrument for the endogenous regressors. In the second stage, the predicted values obtained from the first stage were used as explanatory variables in the main regression equation. The study found that the effect of military expenditure on the economic prosperity of Croatia was positive and highly statistically significant. The study addressed an empirical gap in the literature by integrating distinctive characteristics into the model concerning the long-term relationship between Croatia's military expenditure and economic growth. These factors enhanced empirical accuracy and instilled confidence in the broader and diverse literature concerning military expenditure and economic growth. The implication of this study is that investing in the military provides an enabling environment for economic growth to increase.

The effects of military expenditure and inflation on the unemployment in Pakistan

This study examines the effect of inflation and military expenditure on unemployment in the case of Pakistan. This study used the data set from 1972-2021 and, based on the behaviour of the data, employed the ARDL procedure for assessment. This study found that FDI, GDP, inflation, military expenditure, gross capital formation, and human capital have adverse and noteworthy effects on unemployment over a long period. However, the FDI, GDP, military expenditure, gross capital formation, and human capital have an inconsequential impact on the unemployment rate. However, inflation has an adverse and noteworthy effect on unemployment in a short period. Furthermore, there exists a bi-directional causality between military expenditure and unemployment, while there exists no causality between inflation and unemployment, and military expenditure and inflation. This study concluded that the rise in military expenditure and inflation inversely influence unemployment in Pakistan. This study supported the Philips theory in Pakistan that inflation and unemployment have an adverse link. Based on these findings, this study recommended that the government increase military expenditure to maintain peace in Pakistan and minimise inflation and unemployment.

The Symmetric and Asymmetric Effect of Defense Expenditures, Financial Liberalization, Health Expenditures on Sustainable Development

This study examines the short run, long run, and causal relationships among financial liberalization, healthcare expenditures, and defense expenditures on sustainable development in Pakistan covering the period from 1971 to 2017. The paper also explored the asymmetric relationships among the target variables. To explore these relationships, ARDL and NARDL Models are utilized. Additionally, advanced econometric techniques such as Maki cointegration and quasi-GLS unit root are used to take multiple structural breaks into account. Maki cointegration results show a stable long run relationship between the underlying variables. The findings of ARDL suggest a positive effect of financial liberalization and health expenditures while the negative effect of military expenditures on sustainable development. NARDL estimates suggest strong asymmetry as sustainability responds to positive (negative) shocks in militarization, health expenditures, and financial liberalization differently. The Toda-Yamamoto causality test shows that any policy to target health expenditures and financial liberalization significantly alters sustainable development and vice versa. For robustness checks, FMOLS and alternative proxy of sustainable development are used. The key findings posited the need to shift military expenditures to health expenditures and financial markets to achieve sustainable development goals in Pakistan.

The effect of Military expenditure on economic growth in the World

The effect of Military expenditure on economic growth in the World

Terrorism and economic growth in Africa: understanding the role of military expenditure

ABSTRACT Across African countries, terrorism has become a major challenge to socioeconomic development. While there are studies that have examined the influence of terrorism on economic growth, this study adds to the existing literature by investigating the role of military expenditure on the relationship between terrorism and economic growth in Africa. The study utilised a dataset comprising 24 African countries for which terrorism activities have increased substantially in the last decades. Utilising an instrumental variable Fixed Effects model with standard errors that account for cross-sectional dependence, serial correlation and group-wise heteroskedasticity, the study revealed that, (1) terrorism has a detrimental effect on economic growth in the selected African countries, (2) the interactive effect of military expenditure and terrorism on economic growth is significantly positive, (3) the net effect of military expenditure on the relationship between terrorism and economic growth is positive when the number of terrorism incidents act as a proxy for terrorism but negative when the number of terrorism fatalities acts as a proxy for terrorism. However, this negative effect is substantially lower when compared to the unconditional effect of terrorism on economic growth in Africa. Policy recommendations based on these findings are discussed.

Conflict heterogeneity in Africa

AbstractThe economic development literature widely concurs that conflicts have adverse economic consequences that contribute to poverty, disinvestment and lower human capital leading to widespread inequality and lower economic growth. As such, understanding the nature of conflict has been an important focus for political leaders, policymakers and researchers alike. However, the existing literature does not typically distinguish between the effects of conflict determinants on conflicts by type of actor or aggressor (i.e. state, group and civilian‐based). Using panel data analysis for 46 African countries from 1997 to 2017, and a comprehensive geo‐referenced Armed Conflict Location and Event Data (ACLED) conflict dataset, we find evidence of variation in the determinants' effects on conflicts by actor types. For the full sample of countries, we find that military expenditure decreases civilian‐based conflicts; globalisation increases both state‐ and civilian‐based conflicts while state fragility increases group‐based conflicts. On the other hand, income per capita increases all three types of conflicts. At regional level, we find variation in the effects of military expenditure and globalisation on state‐ and civilian‐based conflicts. However, we find little variation in the effects of the determinants on group‐based conflicts across the regions. The findings highlight the nuances in conflicts by actor types and their causes which need to be accounted for when formulating conflict resolution policies.

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

Abstract 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.

Soft Modeling of Military Expenditure, Income Inequality, and Profit Rate, 1988–2008

Abstract This paper investigates the nexus of military expenditure, income inequality, and profit rate, applying the non-parametric technique of Partial Least Squares Path Modeling (PLS-PM) to 21 countries for 1988–2008. The findings suggest that military expenditure has a positive effect on income inequality while income inequality has a positive impact on profit rate. In contrast, military expenditure has a (relatively small) positive effect on profit rate. However, these results change significantly once unobserved heterogeneity is considered. Accordingly, based on four segments, although the positive effect of income inequality on profit rate remains the same for each segment, for some segments, the effect of military expenditure on income inequality and profit rate become negative.

New Evidence for Romania Regarding Dynamic Causality between Military Expenditure and 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 Impact of Military Expenditure on External Debt: The Case of 35 Arms Importing Countries

ABSTRACT This study aims to empirically test the effects of military expenditure on external debt of 35 arms importing countries by using the annual panel data from the year 1995 to 2016. The panel was divided into two income classes (upper-middle and lower-middle), and the basic sample was also divided into five different regions (Middle-East and North Africa, South and East Asia, Latin America, Europe and Central Asia, and Sub-Saharan Africa) to achieve further robustness in the study. The empirical results of pooled mean group estimators suggest that military expenditure generally increases the external debt burden in the studied countries. More specifically, it was noted that military expenditure decreases external debt in Europe and Central Asia. Moreover, it was found that the interaction term of military expenditure and growth rate is positive and significant in all of the sub-samples, except upper-middle class, the Middle East and North Africa, and Latin American regions. Thus, it may be concluded that military expenditure often increases external debt burden in countries where the debt management system is weak. Countries with weaker debt management systems need to devise economic policies that curtail their military expenditure, reduce their external debt and improve their economic condition.

Don’t just click 'download': The case of U.S. military expenditure data

With a view toward two purposes, the article examines measures of United States military expenditure. It first discusses what types of data would be most suitable for the analysis of the economic burden of such expenditure and it explains, second, why existing databases with U.S. (and global) military expenditure coverage have limited validity, and therefore utility, for the first purpose. The article advances the concepts of minimal and maximal augmented military expenditure measures to better capture the full economic resource burden imposed on an economy than do the presently available measures. The difference of current measures to the proposed augmented measures is not primarily one of an intercept change but mostly of a slope change. The article claims that, by fiscal year 2018, the economic burden imposed by military expenditure on the U.S. economy when using the augmented measures is about double the size of the burden as measured by all of the currently available measures. Since, to date, most empirical work on the effects of military expenditure on economies tends to rely on inappropriate measures, misleading findings may have resulted.

Effect of military expenditure on economic growth: evidences from India Pakistan and China using cointegration and causality analysis

The study revisited the existing evidences of India Pakistan and China with updated data on the effect of military expenditure on economic growth. Econometric approaches analyzed the short and long run relationship between GDP growth and Military expenditure. Empirical studies have been done using cointegration analysis and causality test to justify the relationship and causality of the variables. Interestingly, study obtained positive log-run relation, no short run relationship and unidirectional long run causality in every cases, but for different degrees of relationship. Obtained results are robust and passed necessary diagnostic tests significantly.

A cross-regional analysis of military expenditure, state fragility and economic growth in Africa

This study investigates the relationship between military expenditure, state fragility and economic growth at regional economic communities of African countries. With a balanced panel of 34 African countries spanning 1990–2015. The variables of interest for this study include military expenditure, state fragility and economic growth. To measure economic growth, real gross domestic product per capita serves as the proxy, while state fragility is measured by the state fragility index, and military expenditure by military expenditure as a percentage share of GDP. We utilise: panel causality and cointegration test; and the generalised method of moments (GMM) estimation techniques. The causality results suggest a feedback relationship among our variables of interest and this justified the use of GMM. Our analysis suggests that the effect of military expenditure on growth is negative at Africa level with significant regional economic level differences, and this effect is influenced in the presence of state fragility. This imply that there exist complementary effects between military expenditure and state fragility on growth. A cut in military expenditure and a consideration of other means of dealing with fragility issues as an alternative to joint regional militarised intervention of regional governments of African countries is recommended.

Effect of Military Expenditure on Health Status in Developing Countries

Effect of Military Expenditure on Health Status in Developing Countries

Contemporary drivers of global tourism: evidence from terrorism and peace factors

ABSTRACTThis study examines the effect of terrorism and peace on tourist destination arrivals using a panel of 163 countries with data for the period 2010–2015. The empirical evidence is based on Generalised Method of Moments and Negative Binomial (NB) regressions. Our best estimators are from NB regressions from which the following main findings are established. First, political instability, violent demonstrations, and number of homicides negatively affect tourist arrivals, while the number of incarcerations positively influences the outcome variable. Second, the effects of military expenditure, “armed service personnel,” and “security officers and polices” are not positively significant. Managerial implications are discussed.

The Effects of Military Occupation on Growth

SummaryA substantial literature exists on the effects of military expenditures on economic growth, yet no study has analyzed the effects of military occupation other than in anecdotal cases. This paper uses a panel of 214 countries from 1950 to 2013 to study how economic growth is impacted by different forms of military occupation. Transformative occupations aim to establish institutions to promote stability once the occupation ends, while subdual occupations are more malevolent in their objectives. Our results show that transformative occupations produce positive growth in occupied countries after the occupation period concludes. Separating these effects into the short run and long run, we find that while countries subject to a subdual occupation experience a short‐run increase in growth at the end of the occupation, countries with transformative occupation experience long‐run increases in growth. These findings are robust to the inclusion of traditional drivers of growth. Policy implications suggest that regional conflicts that are solved using military intervention may have lasting effects on growth as long as the intentions of the occupying force are transformative in nature.

Armed Conflict, Military Expenses and FDI Inflow to Developing Countries

This paper investigates the relationship between military expenditure and FDI inflow conditioning on the exposure of a country to armed conflict in the long run. We apply the band spectrum regression estimator, and the maximal overlap discrete wavelet transform, to a panel of 60 developing countries, for the years 1990 to 2013. The estimated results indicate that military expenditure, in the absence of armed conflict, reduces FDI inflow. However, the negative effect is mitigated by increased military expenditure, in the presence of armed conflict. We also show that the effect of military expenditure on FDI is time sensitive, in that it takes time for military expenditure to affect FDI inflow. FDI inflow in response to higher military expenditure is higher for the country that faces higher armed conflict than the country that faces lower armed conflict. The findings are robust in the case of overall as well as internal conflict. These results are also robust to the alternative specification, subsample analysis with different armed conflict thresholds, and the estimation using the time variant long-run models.

The temporal stability and developmental differences in the environmental impacts of militarism: the treadmill of destruction and consumption-based carbon emissions

This study examines the relationship between national-level militarism and consumption-based carbon dioxide emissions. We analyze panel data from 1990 to 2010 for 81 nations to determine whether the magnitude of the effects of (1) military expenditures as percent of total gross domestic product and (2) military personnel as percent of total labor force on carbon emissions change over time. Results of two-way fixed effects models highlight the temporal stability of the environmental impacts of both national-level military characteristics. The findings also reveal that the effect of military expenditures on emissions is larger in the more developed OECD nations than in the developing non-OECD nations. Overall, the results support the treadmill of destruction perspective, which suggests that the nations’ militaries are an important social institution to consider in sustainability science research on the human drivers of global environmental change.

Arms or butter: The economic effect of an increase in military expenditure

This paper analyzes the economic effects of increasing military expenditure, a requirement in the Republic of Korea. The effects of military expenditure are examined with various scenarios concerning financial resources from an endogenous growth perspective. The dynamic Computational General Equilibrium (CGE) model is employed in order to measure the aggregate effect of changes in military expenditure. Raising the indirect tax rate is the best for GDP, but a corporate income tax rate increase is the best for gross output. The differences between short-term and long-term effects are verified by the dynamic change in each indicator.

The impact of military spending and income inequality on economic growth in Turkey

An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963–2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.