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Military Expenditures, Inequality, and Welfare and Political Regimes: A Dynamic Panel Data Analysis

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Author Info

  • Unal Tongur

    ()
    (Department of Economics, METU)

  • Adem Yavuz Elveren

    ()
    (Department of Economics, METU and Sutcu Imam University)

Abstract

The goal of this paper is to investigate the relationship between type of welfare regimes and military expenditures. There is a sizeable empirical literature on the development of the welfare state and on the typology of the welfare regimes. There appear to be, however, no empirical studies that examine welfare regimes with special attention to military spending. This study aims at providing a comprehensive analysis on the topic by considering several different welfare regime typologies. To do so, we use dynamic panel data analysis for 37 countries for the period of 1988-2003 by considering a wide range of control variables such as type of political regimes, inequality measures, number of terrorist events, and size of the armed forces. Our findings, in line with the literature, show that there is a positive relationship between income inequality and share of military expenditures in the central government budget, and that the number of terrorist events is a significant factor that affects both the level of military expenditure and inequality. Also, the paper reveals a significant negative relationship between social democratic welfare regimes and military expenditures.

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File URL: http://www.erc.metu.edu.tr/menu/series12/1210.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 1210.

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Length: 38 pages
Date of creation: Dec 2012
Date of revision: Dec 2012
Handle: RePEc:met:wpaper:1210

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Keywords: Military spending; welfare regimes; political regimes; income inequality;

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References

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  1. David Roodman, 2006. "How to Do xtabond2: An Introduction to "Difference" and "System" GMM in Stata," Working Papers 103, Center for Global Development.
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  3. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
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  10. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  11. Kemp-Benedict, Eric, 2011. "Political regimes and income inequality," Economics Letters, Elsevier, vol. 113(3), pages 266-268.
  12. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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  15. Lin, Eric S. & Ali, Hamid E., 2009. "Military Spending and Inequality: Panel Granger Causality Test," MPRA Paper 40159, University Library of Munich, Germany.
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Cited by:
  1. Unal Tongur & Sara Hsu & Adem Yavuz Elveren, 2013. "Military Expenditures and Political Regimes: An Analysis Using Global Data, 1963-2001," ERC Working Papers 1307, ERC - Economic Research Center, Middle East Technical University, revised Jul 2013.

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