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The Demand For Military Expenditure: Evidence From The Eu15 (1961-2005)


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  • Eftychia Nikolaidou


In recent years, there has been a growing number of studies that investigate the economic effects of military spending using a variety of estimation methods and focusing either on individual countries or on groups of relatively homogeneous countries. The situation is not the same as far as the demand for military expenditure is concerned, where less attention has been given and the majority of empirical studies have focused on individual countries, with only a few focusing on groups of countries and employing cross-sectional or panel data approaches. A region that has not attracted any research interest regarding the determinants of military expenditure is the European Union (EU) with the exception of individual country studies (mainly for the UK, Greece, France, Spain, Portugal). This paper argues that understanding the determinants of military spending in these countries is very important, especially given the discussions in recent years towards the development of a Common European Security and Defence Policy (CESDP). It then follows Dunne et al. (2003) and employs the Autoregressive Distributed Lag (ARDL) approach to cointegration to estimate a general model of aggregate defence spending for each of the 15 core EU countries over the period 1961-2005. The findings indicate that there is very little uniformity in the factors that determine each country's demand for military expenditure, something that needs to be borne in mind by policy makers when burden-sharing issues are considered in the development of the CESDP.

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Article provided by Taylor & Francis Journals in its journal Defence and Peace Economics.

Volume (Year): 19 (2008)
Issue (Month): 4 ()
Pages: 273-292

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Handle: RePEc:taf:defpea:v:19:y:2008:i:4:p:273-292

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Keywords: Military expenditure; Demand; European Union; Autoregressive Distributed; Lag (ARDL);


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Cited by:
  1. Albalate, Daniel & Bel, Germà & Elias, Ferran, 2012. "Institutional determinants of military spending," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 279-290.
  2. Aamer S. Abu-Qarn & J Paul Dunne & Yasmine M. Abdelfattah & Shadwa Zaher, 2010. "The Demand for Military Spending in Egypt," Working Papers 1001, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  3. Bove, Vincenzo & Efthyvoulou, Georgios, 2013. "Political Cycles in Public Expenditure: Butter vs Guns," NEPS Working Papers 7/2013, Network of European Peace Scientists.
  4. Mary Michail & Nicholas Papasyriopoulos, 2012. "Investigation of the Greek – Turkish Military Spending Relation," International Advances in Economic Research, Springer, vol. 18(3), pages 259-270, August.
  5. Shahbaz Muhammad & Carlos Leitao Nuno & Salah Uddin Ghazi & Mohamed Arouri & Frederic Teulon, 2014. "Should Portuguese Economy Invest in Defense Spending? A Revisit," Working Papers 2014-380, Department of Research, Ipag Business School.


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