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The Defense-Growth Relationship: An Economic Investigation into Post-Soviet States

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Listed:
  • McDonald Bruce D

    (Indiana University – South Bend)

  • Eger Robert J

    (Florida State University)

Abstract

An important question stemming from the collapse of the Soviet Union is how defense spending has influenced the economic performance of the 15 member states since their establishment as market economies. This study furthers the understanding of the relationship between defense spending and economic growth using data from the states of the former Soviet Union from 1992 to 2007. A nonlinear production function was used for direct effects, and models of investment and employment were employed for indirect effects. Contrary to expectations, the findings show that continued reliance on the defense sector in post-Soviet states has helped overall economic growth. Similarly, the growth effect of defense spending has remained nearly constant since the collapse of the Soviet Union.

Suggested Citation

  • McDonald Bruce D & Eger Robert J, 2010. "The Defense-Growth Relationship: An Economic Investigation into Post-Soviet States," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(1), pages 1-28, September.
    • Handle: RePEc:bpj:pepspp:v:16:y:2010:i:1:n:5
    DOI: 10.2202/1554-8597.1191
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    Cited by:

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    2. Ali Hamid E., 2011. "Military Expenditures and Human Development: Guns and Butter Arguments Revisited: A Case Study from Egypt," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 17(1), pages 1-21, September.
    3. Hou Na & Chen Bo, 2014. "Military Expenditure and Investment in OECD Countries: Revisited," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(4), pages 1-10, December.
    4. Tsangyao Chang & Chien-Chiang Lee & Hsiao-Ping Chu, 2015. "Revisiting the Defense-Growth nexus in European countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(3), pages 341-356, June.
    5. Hou Na & Chen Bo, 2014. "Military Spending and Economic Growth in An Augmented Solow Model: A Panel Data Investigation for OECD Countries," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(3), pages 1-15, August.
    6. Bellos Sotirios K., 2016. "IMF programs and policies assessment in the transition economies during the transition and the post-transition period," Journal of Heterodox Economics, Sciendo, vol. 3(2), pages 102-127, December.
    7. Sotirios K. Bellos, 2017. "The Relationship between Military Expenditure and Certain Growth and Development Related Variables in Transition Economies: A Panel Data Analysis," Applied Economics and Finance, Redfame publishing, vol. 4(5), pages 31-44, September.

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