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Guns better than butter in Pakistan? The dilemma of military expenditure, human development, and economic growth

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  • Luqman, Muhammad
  • Antonakakis, Nikolaos

Abstract

The so-called ‘guns and butter’ phenomenon reflects that Pakistan is experiencing a difficult choice to improve defense and welfare sector to achieve sustainable economic growth. However, results remain controversial. Therefore, this paper attempts to explore the long and short-term associations among military expenditure, human development, and economic growth as informed by both urbanization and food deficit from 1965 to 2016. This study applies a newly-developed econometric model of Quantile Autoregressive Distributive Lag that not only takes asymmetries into account but also captures all conditions simultaneously. Our findings indicate that military expenditure has a negative impact on human development and economic growth, while urbanization and food deficit have a positive effect on it. We also confirm this long and short-run equilibrium by applying the Wald test. Possible economic policy implications - such as improving the quality and quantity of education, a true implementation of the National Rural Support Program, and improving gender equity in the Pakistani economy - are also discussed.

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  • Luqman, Muhammad & Antonakakis, Nikolaos, 2021. "Guns better than butter in Pakistan? The dilemma of military expenditure, human development, and economic growth," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    • Handle: RePEc:eee:tefoso:v:173:y:2021:i:c:s004016252100576x
    DOI: 10.1016/j.techfore.2021.121143
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