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Coups d'état and Defense Spending: A Counterfactual Analysis

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  • Vincenzo Bove

    (University of Essex)

  • Roberto Nisticò

    (University of Essex, Università di Napoli Federico II and CSEF)

Abstract

We present a case study analysis of the impact of coups d'état on defence spending. We use the synthetic control method and compare the evolution of the defence burden for countries affected by coups with the evolution of an artificial control group. We find that successful coups determine a large increase in defence burden, as they directly affect the bargaining power of the military. When no effects or a decrease in the defence burden is found, it is often the consequence of a democratisation process triggered by the coup. Failed coups, instead, produce a smaller, and mostly positive, effect on military burden, possibly a result of coup-proofing strategies. The presence of country-specific dynamics calls for in-depth analyses of single units, to detect particular mechanisms that are averaged out in the aggregate.

Suggested Citation

  • Vincenzo Bove & Roberto Nisticò, 2014. "Coups d'état and Defense Spending: A Counterfactual Analysis," CSEF Working Papers 366, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:366
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    Cited by:

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    2. Martin Gassebner & Jerg Gutmann & Stefan Voigt, 2016. "When to expect a coup d’état? An extreme bounds analysis of coup determinants," Public Choice, Springer, vol. 169(3), pages 293-313, December.
    3. Oliver Pamp & Florian Dendorfer & Paul W. Thurner, 2018. "Arm your friends and save on defense? The impact of arms exports on military expenditures," Public Choice, Springer, vol. 177(1), pages 165-187, October.
    4. Katarzyna Metelska-Szaniawska, 2016. "Reassessing the Economic Effects of Post-Socialist Constitutions Using the Synthetic Control Method," Working Papers 2016-18, Faculty of Economic Sciences, University of Warsaw.
    5. Aney, Madhav S. & Ko, Giovanni, 2015. "Expropriation risk and competition within the military," European Journal of Political Economy, Elsevier, vol. 39(C), pages 125-149.
    6. Kawaura, Akihiko, 2018. "Generals in defense of allocation: Coups and military budgets in Thailand," Journal of Asian Economics, Elsevier, vol. 58(C), pages 72-78.

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    More about this item

    Keywords

    Military Expenditure; Coups d'état; Synthetic Control Method;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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