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U.S. Assistance, Israeli Allocation, and the Arms Race in the Middle East

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  • Martin C. McGuire

    (Department of Economics, University of Maryland)

Abstract

This paper constructs an econometric model of Israel's allocation of resources as between defense, public nondefense, and private consumption goods. Because these allocations are influenced by and simultaneously influence U.S. assistance and Arab military outlays, equations for U.S. and Arab allocations are also constructed. This entire multiequation system represents a multicountry allocation and arms race process in the Middle East. A comprehensive body of data on Israeli expenditures, surrounding Arab states expenditures, and U.S. assistance has been assembled for the period 1960 to 1979, and the multiequation model has been estimated. Several conclusions of both theoretical and policy importance emerge from the analysis.

Suggested Citation

  • Martin C. McGuire, 1982. "U.S. Assistance, Israeli Allocation, and the Arms Race in the Middle East," Journal of Conflict Resolution, Peace Science Society (International), vol. 26(2), pages 199-235, June.
    • Handle: RePEc:sae:jocore:v:26:y:1982:i:2:p:199-235
    DOI: 10.1177/0022002782026002002
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    References listed on IDEAS

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    4. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:

    1. Langlotz, Sarah & Potrafke, Niklas, 2019. "Does development aid increase military expenditure?," Journal of Comparative Economics, Elsevier, vol. 47(3), pages 735-757.
    2. Aamer S. Abu-Qarn, 2008. "Six decades of the Israeli-Arab conflict: An assessment of the economic aspects," Economics of Peace and Security Journal, EPS Publishing, vol. 3(2), pages 8-15, July.
    3. Nicolas Van de Sijpe, 2013. "Is Foreign Aid Fungible? Evidence from the Education and Health Sectors," World Bank Economic Review, World Bank Group, vol. 27(2), pages 320-356.

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