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Military Spending, Armed Conflict and Economic Growth in Developing Countries in the Post-Cold War Era

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  • M Nusrate Aziz
  • M Niaz Asadullah

Abstract

This study empirically examines a connection between non-tariff measures (NTMs) and trade response at a micro level. It investigates the mechanism, drivers and speed of adjustment to a battery of sanitary and phytosanitary measures and technical barriers to trade. It uses an administrative dataset of Pakistan’s mango-exporting firms at an eight-digit level of disaggregation and exploits a natural experiment in the identification strategy. The research finds the NTMs appear to have increased the volume of exports but through one specific channel and after some time lag. The intensive margins (IM) of trade have improved whereas the extensive margins (EM) have contracted. The increase in IM is, however, registered after a gap of four years and appears to be driven by larger quantities as well as higher prices. The contraction in the EM seems to operate mainly through a reduction in the number of customers in export markets.

Suggested Citation

  • M Nusrate Aziz & M Niaz Asadullah, 2016. "Military Spending, Armed Conflict and Economic Growth in Developing Countries in the Post-Cold War Era," Discussion Papers 2016-03, University of Nottingham, CREDIT.
    • Handle: RePEc:not:notcre:16/03
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    3. Kyriakos Emmanouilidis & Christos Karpetis, 2022. "Cross–Country Dependence, Heterogeneity and the Growth Effects of Military Spending," Defence and Peace Economics, Taylor & Francis Journals, vol. 33(7), pages 842-856, October.
    4. Nusrate Aziz & Usman Khalid, 2019. "Armed Conflict, Military Expenses and FDI Inflow to Developing Countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(2), pages 238-251, February.
    5. Sampson Agyapong Atuahene & Kong Yusheng & Geoffrey Bentum-Micah & Evans Garti & Alexender Baah, 2020. "Military Expenditure and Economic Growth in China," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(2), pages 3-16.
    6. Luke Emeka Okafor & Usman Khalid, 2021. "Regaining international tourism attractiveness after an armed conflict: the role of security spending," Current Issues in Tourism, Taylor & Francis Journals, vol. 24(3), pages 385-402, February.
    7. Ramazan ErdaÄŸ, 2021. "Security Environment and Military Spending of Turkey in the 2000s," Contemporary Review of the Middle East, , vol. 8(1), pages 120-139, March.
    8. Ahad, Muhammad & Dar, Adeel Ahmad, 2017. "Modeling the Asymmetric Impact of Defense Spending on Economic Growth: An Evidence from Nonlinear ARDL and Multipliers," MPRA Paper 80085, University Library of Munich, Germany, revised 2017.
    9. Christos Kollias & Suzanna-Maria Paleologou, 2019. "Military spending, economic growth and investment: a disaggregated analysis by income group," Empirical Economics, Springer, vol. 56(3), pages 935-958, March.
    10. Usman Khalid & Luke Emeka Okafor & Nusrate Aziz, 2020. "Armed conflict, military expenditure and international tourism," Tourism Economics, , vol. 26(4), pages 555-577, June.
    11. Abdul Rehman & Hengyun Ma & Rafael Alvarado & Fayyaz Ahmad, 2023. "The nexus of military, final consumption expenditures, total reserves, and economic development of Pakistan," Economic Change and Restructuring, Springer, vol. 56(3), pages 1753-1776, June.
    12. Khaldoon A. Mourad & Helen Avery, 2019. "The Sustainability of Post-Conflict Development: The Case of Algeria," Sustainability, MDPI, vol. 11(11), pages 1-18, May.

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    More about this item

    Keywords

    Internal and external armed conflict; military expenditure; economic growth.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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