Advanced Search
MyIDEAS: Login to save this paper or follow this series

The economic impact of military expenditures


Author Info

  • Landau, Daniel


The author addresses three questions about military spending in developing countries: What are the levels of (and trends in) military spending as a percentage of gross national product? What impact does peacetime military spending have on growth, government spending on social welfare and infrastructure, and other key economic variables? What major factors influence the level of military spending? The author finds that military spending as a share of GNP generally fell in the 1980s, even in the Middle East and North Africa. The mean level of military expenditure as a share of GNP (MES) was 3.9 percent, well below the peak of 5.3 percent in 1976. In 1989, MES averaged only 2.7 percent in Latin America and 2.0 percent in sub-Saharan Africa - the two regions with the most severe economic problems. He finds no evidence of a negative relationship between military spending as a share of GNP and the peacetime growth rate of developing countries - except where military spending is high. He finds that higher shares of MES are not associated with lower shares of government spending on education, health, and infrastructure. As MES increases, government spending as a share of GNP increases, which allows the level of spending on health, education, and infrastructure to be maintained. The author finds some evidence that increased military spending in the developing countries has a weak negative impact on investment and the balance of trade. He finds no evidence of a statistically significant relationship between military spending and inflation. The most important determinant of peacetime military spending is the spending level of neighboring countries - in other words, the potential external threat. Regional conciliation and disarmament may be an important step toward reduced military spending.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1138.

as in new window
Date of creation: 31 May 1993
Date of revision:
Handle: RePEc:wbk:wbrwps:1138

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Web page:
More information through EDIRC

Related research

Keywords: Achieving Shared Growth; Economic Growth; Peace&Peacekeeping; Health Monitoring&Evaluation; Economic Theory&Research;


No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Luca Pieroni, 2007. "Military Spending and Economic Growth," Working Papers 0708, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  2. Malcolm Knight & Norman Loayza & Delano Villanueva, 1996. "The Peace Dividend: Military Spending Cuts and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 1-37, March.
  3. Liutang Gong & Heng-fu Zou, 2001. "Military spending and stochastic growth," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 57, China Economics and Management Academy, Central University of Finance and Economics.
  4. Vincenzo Bove & Roberto Nisticò, 2014. "Coups d'état and Defense Spending: A Counterfactual Analysis," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 366, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  5. Baffes, John & Shah, Anwar, 1998. "Productivity of Public Spending, Sectoral Allocation Choices, and Economic Growth," Economic Development and Cultural Change, University of Chicago Press, vol. 46(2), pages 291-303, January.
  6. Philip R. Gerson, 1998. "The Impact of Fiscal Policy Variableson Output Growth," IMF Working Papers 98/1, International Monetary Fund.
  7. Deng-Shan Wang & Yan Wang & Yifang Liu & Heng-fu Zou, 2009. "Optimal Military Spending, Trade and Stochastic Economic Growth," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 373, China Economics and Management Academy, Central University of Finance and Economics.
  8. Alptekin, Aynur & Levine, Paul, 2012. "Military expenditure and economic growth: A meta-analysis," European Journal of Political Economy, Elsevier, vol. 28(4), pages 636-650.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1138. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.