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Military expenditure and debt in small industrialised economies: A panel analysis

Author

Listed:
  • J. Paul Dunne †
  • Sam Perlo-Freeman ‡
  • Aylin Soydan §

Abstract

This paper considers the impact of military spending on debt in a panel of 11 small industrialising economies using panel data methods. It provide estimates for fixed effects and random effects models and then moves on to consider dynamic models. The dynamics are found to be important and the results suggest that military burden does indeed have a positive impact on the share of external debt in GDP.

Suggested Citation

  • J. Paul Dunne † & Sam Perlo-Freeman ‡ & Aylin Soydan §, 2004. "Military expenditure and debt in small industrialised economies: A panel analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 125-132, April.
  • Handle: RePEc:taf:defpea:v:15:y:2004:i:2:p:125-132
    DOI: 10.1080/1024269032000110504
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    References listed on IDEAS

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    1. Michael Brzoska, 1983. "Research Communication: The Military Related External Debt of Third World Countries," Journal of Peace Research, Peace Research Institute Oslo, vol. 20(3), pages 271-277, September.
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    3. Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, vol. 2(3).
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    5. Rudiger W. Dornbusch, 1987. "International debt and economic instability," Economic Review, Federal Reserve Bank of Kansas City, issue Jan, pages 15-32.
    6. Kevin Ross & R. Brooks & Robert Powell & Ydahlia A. Metzgen Quemarez & Doris C Ross & Mariano Cortes & Saqib Rizavi & Benoit Ketchekmen & Francesca Fornasari, 1998. "External Debt Histories of Ten Low-Income Developing Countries; Lessons from Their Experience," IMF Working Papers 98/72, International Monetary Fund.
    7. Milman, Claudio D., 1998. "The Latin American foreign debt revisited," Global Finance Journal, Elsevier, vol. 9(2), pages 173-180.
    8. Brauer, Jurgen, 2007. "Arms Industries, Arms Trade, and Developing Countries," Handbook of Defense Economics, Elsevier.
    9. Randa Alami, 2002. "Military Debt: Perspectives from the Experience of Arab Countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(1), pages 13-30.
    10. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    Citations

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    Cited by:

    1. J. Paul Dunne a,† & Sam Perlo-Freeman ‡ & Aylin Soydan §, 2004. "Military expenditure and debt in South America," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 173-187, April.
    2. repec:epc:journl:v:12:y:2017:i:2:p:21-31 is not listed on IDEAS
    3. Muhammad Shahbaz & Muhammad shahbaz Shabbir & Muhammad sabihuddin Butt, 2016. "Does Military Spending Explode External Debt in Pakistan?," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(5), pages 718-741, September.
    4. Ilhèm Gargouri & Majdi Ksantini, 2016. "The Determinants Of Public Debt," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 111-124, March.
    5. Paresh Kumar Narayan & Russell Smyth, 2007. "The Military Expenditure-External Debt Nexus: New Evidence From A Panel Of Middle Eastern Countries," Monash Economics Working Papers 17-07, Monash University, Department of Economics.
    6. repec:agr:journl:v:1(614):y:2018:i:1(614):p:183-192 is not listed on IDEAS
    7. Eftychia Nikolaidou, 2016. "The role of military expenditure and arms imports in the Greek debt crisis," Economics of Peace and Security Journal, EPS Publishing, vol. 11(1), pages 18-27, April.
    8. Matthew R DiGiuseppe & Colin M Barry & Richard W Frank, 2012. "Good for the money," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(3), pages 391-405, May.
    9. Yemane Wolde-Rufael, 2009. "The Defence Spending-External Debt Nexus In Ethiopia," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(5), pages 423-436, October.
    10. Zhang, Xiaoyan & Chang, Tsangyao & Su, Chi-Wei & Wolde-Rufael, Yemane, 2016. "Revisit causal nexus between military spending and debt: A panel causality test," Economic Modelling, Elsevier, vol. 52(PB), pages 939-944.
    11. repec:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0360-z is not listed on IDEAS
    12. Oya Erdogdu, 2008. "Political Decisions, Defense And Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(1), pages 27-35.
    13. W. Robert J. Alexander, 2013. "The Defence-Debt Nexus: Evidence From The High-Income Members Of Nato," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(2), pages 133-145, April.
    14. Luca Pieroni, 2007. "How Strong is the Relationship between Defence Expenditure and Private Consumption? Evidence from the United States," Working Papers 0705, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

    More about this item

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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