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The demand for military spending in developing countries: A dynamic panel analysis

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  • J. Paul Dunne
  • Sam Perlo-Freeman

Abstract

Estimating demand functions for developing countries before and after the end of the Cold War, Dunne and Perlo-Freeman (2003) found little evidence of any change in the underlying relationship. One concern with their analysis was that the use of cross-section averages might have obscured important time series effects. This paper deals with this issue by analysing their data using static and dynamic panel data methods. This produces evidence of a change in relationship and suggests that the focus in the literature on cross-section analyses has indeed limited our understanding of important dynamic processes at work within countries.

Suggested Citation

  • J. Paul Dunne & Sam Perlo-Freeman, 2003. "The demand for military spending in developing countries: A dynamic panel analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 461-474.
  • Handle: RePEc:taf:defpea:v:14:y:2003:i:6:p:461-474
    DOI: 10.1080/1024269032000085224
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    References listed on IDEAS

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    1. Dunne, John Paul & Pashardes, Panos & Smith, Ronald P, 1984. "Needs, Costs and Bureaucracy: The Allocation of Public Consumption in the UK," Economic Journal, Royal Economic Society, vol. 94(373), pages 1-15, March.
    2. Daniel P. Hewitt, 1991. "Military Expenditure; Econometric Testing of Economic and Political Influences," IMF Working Papers 91/53, International Monetary Fund.
    3. Julide Yildirim & Selami Sezgin, 2005. "Democracy and Military Expenditure: A Cross-Country Evidence," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 12(1), pages 93-100, July.
    4. Jordi Molas-Gallart, 1997. "Country survey IX: Spain," Defence and Peace Economics, Taylor & Francis Journals, vol. 8(3), pages 267-306.
    5. Smith, R P, 1989. "Models of Military Expenditure," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(4), pages 345-359, Oct.-Dec..
    6. Smith, R P, 1980. "The Demand for Military Expenditure," Economic Journal, Royal Economic Society, vol. 90(363), pages 811-820, December.
    7. 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.
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    Keywords

    Military Spending; Developing Countries; Demand;

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