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Does military spending promote social welfare? A comparative analysis of the BRICS and G7 countries

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  • Ying Zhang
  • Xiaoxing Liu
  • Jiaxin Xu
  • Rui Wang

Abstract

Whether military spending is capable of promoting social welfare is currently a controversial issue. The aim of this paper is to investigate how military spending affects the input and output of social welfare (i.e. social welfare expenditures and social welfare index). A panel cointegration analysis and an impulse response function are conducted with multi-country panel data, over two time periods, 1998–2011 and 1993–2007. In addition, to extend a comparative analysis over different economies, BRICS (i.e. Brazil, Russia, India, China, South Africa) and G7 (i.e. the US, Japan, Germany, the UK, France, Italy, Canada) countries are selected as representatives of emerging economies and developed countries, respectively. The empirical results show that military spending enhances social welfare expenditures in developed countries, while the effect is ambiguous in emerging economies. Also, military spending is capable of promoting the social welfare index based on the FMOLS estimation. The comparative analyses indicate that unlike in the G7, the effect of the growth of military spending on the growth of social welfare expenditures is negative and shorter in the BRICS.

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  • Ying Zhang & Xiaoxing Liu & Jiaxin Xu & Rui Wang, 2017. "Does military spending promote social welfare? A comparative analysis of the BRICS and G7 countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(6), pages 686-702, November.
    • Handle: RePEc:taf:defpea:v:28:y:2017:i:6:p:686-702
    DOI: 10.1080/10242694.2016.1144899
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    2. Ologbenla Patrick, 2020. "Military Expenditure and Macroeconomic Perfromance – The Case of an Emerging Country," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 65(1), pages 67-83, April.
    3. Seemab Gillani & Muhammad Nouman Shafiq & Tusawar Iftikhar Ahmad, 2019. "Military Expenditures and Health Outcomes: A Global Perspective," iRASD Journal of Energy and Environment, International Research Association for Sustainable Development (iRASD), vol. 1(1), pages 1-20, June.
    4. Chiung-Ju Huang & Yuan-Hong Ho, 2018. "Does Taiwan's Defense Spending Crowd out Education and Social Welfare Expenditures?," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 14(1), pages 67-82, February.
    5. MAÏ ASSAN CHEDI, Maman, 2022. "Does Defence Expenditure Affect Education and Health expenditures in Saharan Africa?," African Journal of Economic Review, African Journal of Economic Review, vol. 10(4), September.
    6. Korhan K. Gokmenoglu & Nigar Taspinar & Mohammad Mafizur Rahman, 2021. "Military expenditure, financial development and environmental degradation in Turkey: A comparison of CO2 emissions and ecological footprint," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 986-997, January.
    7. Khalid Zaman, 2019. "Does higher military spending affect business regulatory and growth specific measures? Evidence from the group of seven (G-7) countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 323-348, April.
    8. Ceyhun Elgin & Adem Y. Elveren & Gökçer Özgür & Gül Dertli, 2022. "Military spending and sustainable development," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1466-1490, August.
    9. Michael A. Akume & Gylych Jelilov & Benedict Akanegbu, 2019. "The Impact of Military Spending on Economic Wellbeing in Nigeria," International Journal of Business, Economics and Management, Conscientia Beam, vol. 6(4), pages 186-200.
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    11. Dada James Temitope & Awoleye Emmanuel Olayemi & Arnaut Marina & Al-Faryan Mamdouh Abdulaziz Saleh, 2023. "Revisiting the Military Expenditure-Growth Nexus: Does Institutional Quality Moderate the Effect?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 29(1), pages 19-42, February.

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