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Economic, Security, and Political Determinants of Military Spending in NATO Countries

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  • Jakub Odehnal
  • Jiří Neubauer

Abstract

The article deals with an empirical investigation of the determinants of military expenditures of selected NATO countries. Economic, security, and political determinants were analysed by means of panel models. In order to analyse the economic environment as a determinant of military expenditure, the following variables were applied: Risk of Budget Balance, Risk of Foreign Debt, Risk of Inflation, Risk of GDP per Capita, Risk of GDP Growth, and a control variable, Risk of Current Account as a percentage of GDP. The following variables were employed for the security risk analysis: Terrorism, Cross Border Conflict, Ethnic Tension, and Foreign Pressures. A variable evaluating the Democratic Accountability and a control variable Government Stability were selected to analyse political risks. The results show serious inconsistencies in factors affecting the military expenditures of traditional and new NATO member countries.

Suggested Citation

  • Jakub Odehnal & Jiří Neubauer, 2020. "Economic, Security, and Political Determinants of Military Spending in NATO Countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 31(5), pages 517-531, July.
    • Handle: RePEc:taf:defpea:v:31:y:2020:i:5:p:517-531
    DOI: 10.1080/10242694.2018.1544440
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    References listed on IDEAS

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    Cited by:

    1. Wukki Kim & Todd Sandler & Hirofumi Shimizu, 2024. "An expanded investigation of alliance security free riding," Global Policy, London School of Economics and Political Science, vol. 15(4), pages 570-582, September.
    2. Kyriakos Emmmanouildis, 2025. "Militarization’s effects on fiscal responses to the COVID-19 pandemic: an empirical investigation through a structural equation model," SN Business & Economics, Springer, vol. 5(7), pages 1-25, July.
    3. Gökhan Çobanoğulları, 2026. "Geopolitical Risk, Military Expenditure, and Inflation Linkage in Türkiye: Insights from Wavelet-Partial Coherence Analysis," Computational Economics, Springer;Society for Computational Economics, vol. 68(1), pages 437-455, July.
    4. Njamen Kengdo, Arsène Aurelien & Kitio, Victor, 2025. "The defence sector faces the resource curse: Effect of natural resource rents on defence spending in Sub-Saharan Africa," Resources Policy, Elsevier, vol. 105(C).
    5. Jakub Odehnal & Jiří Neubauer & Lukáš Dyčka & Tereza Ambler, 2020. "Development of Military Spending Determinants in Baltic Countries—Empirical Analysis," Economies, MDPI, vol. 8(3), pages 1-18, August.
    6. Jakub Odehnal & Jiří Neubauer & Aleš Olejníček & Jana Boulaouad & Lenka Brizgalová, 2021. "Empirical Analysis of Military Expenditures in NATO Nations," Economies, MDPI, vol. 9(3), pages 1-15, July.
    7. Justin George & Todd Sandler, 2024. "A spatial analysis of NATO burden sharing at the operational levels," Kyklos, Wiley Blackwell, vol. 77(4), pages 1026-1047, November.
    8. Minh Phuoc‐Bao Tran & Duc Hong Vo, 2024. "Can local and global geopolitical risk predict governments' military spending behaviour? International evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 71(4), pages 588-603, September.
    9. Joseph Keneck‐Massil & Iliassou Nkariepoun‐Njoya & Bernard Clery Nomo‐Beyala, 2024. "Does women's political empowerment matter in military spending?," Kyklos, Wiley Blackwell, vol. 77(2), pages 316-350, May.

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