Military expenditure - threats, aid, and arms races
AbstractUsing global data for the period 1960-99, the authors estimate neighborhood arms races. They find that the level of military expenditure is strongly influenced by the expenditure of neighbors. The authors estimate an"arms race multiplier,"finding that an initial exogenous increase in military expenditure by one country is more than doubled in both the originating country and its neighbor. An implication is that military expenditure is, to an extent, a"regional public bad."Potentially, there is an offsetting public good effect if rebellions are deterred by military expenditure. However, instrumenting for military expenditure, the authors find no deterrence effect of military spending on the risk of internal conflict. So there appears to be no regional public good effect offsetting the public bad arising from a neighborhood arms race.
Download InfoIf 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.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2927.
Date of creation: 30 Nov 2002
Date of revision:
Payment Systems&Infrastructure; Peace&Peacekeeping; Business Environment; Legal Products; Economic Theory&Research; Peace&Peacekeeping; Legal Products; National Governance; Social Conflict and Violence; Business Environment;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Knight, Malcolm & Loayza, Norman & Villanueva, Delano, 1996. "The peace dividend : military spending cuts and economic growth," Policy Research Working Paper Series 1577, The World Bank.
- Manski, C.F., 1991.
"Identification of Endogenous Social Effects: the Reflection Problem,"
9127, Wisconsin Madison - Social Systems.
- Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
- Smith, R P, 1980. "The Demand for Military Expenditure," Economic Journal, Royal Economic Society, vol. 90(363), pages 811-20, December.
- Paul Dunne & Sam Perlo-Freeman, 2003. "The Demand for Military Spending in Developing Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 23-48.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Smith, Ron, 1995. "The demand for military expenditure," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 4, pages 69-87 Elsevier.
- Brito, Dagobert L. & Intriligator, Michael D., 1995. "Arms races and proliferation," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 6, pages 109-164 Elsevier.
- Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," World Bank Economic Review, World Bank Group, vol. 12(1), pages 29-58, January.
- Murshed, S Mansoob & Sen, Somnath, 1995. "Aid Conditionality and Military Expenditure Reduction in Developing Countries: Models of Asymmetric Information," Economic Journal, Royal Economic Society, vol. 105(429), pages 498-509, March.
- Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287.
- Brzoska, Michael, 1995. "World military expenditures," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 3, pages 45-67 Elsevier.
- Indra de Soysa & Eric Neumayer, 2005.
"Disarming Fears of Diversity: Ethnic Heterogeneity and State Militarization, 1988–2002,"
0503008, EconWPA, revised 01 Sep 2005.
- de Soysa, Indra & Neumayer, Eric, 2007. "Disarming fears of diversity : ethnic heterogeneity and state militarization, 1988-2002," Policy Research Working Paper Series 4221, The World Bank.
- Matteo Bobba & Andrew Powell, 2007. "Aid and Growth: Politics Matters," Research Department Publications 4511, Inter-American Development Bank, Research Department.
- Alptekin, Aynur & Levine, Paul, 2010.
"Military Expenditure and Economic Growth: A Meta-Analysis,"
28853, University Library of Munich, Germany.
- 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.
- Matteo Bobba & Andrew Powell, 2007. "Ayuda y crecimiento: La política importa," Research Department Publications 4512, Inter-American Development Bank, Research Department.
- J Paul Dunne & Samuel Perlo-Freeman & Ron P Smith, 2007.
"The Demand for Military Expenditure in Developing Countries: Hostility versus Capability,"
0707, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
- J. Paul Dunne & Sam Perlo-Freeman & Ron Smith, 2008. "The Demand For Military Expenditure In Developing Countries: Hostility Versus Capability," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(4), pages 293-302.
- Gupta, Sanjeev & Clements, Benedict & Bhattacharya, Rina & Chakravarti, Shamit, 2004. "Fiscal consequences of armed conflict and terrorism in low- and middle-income countries," European Journal of Political Economy, Elsevier, vol. 20(2), pages 403-421, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.