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Military Expenditures and Income Inequality Evidence from a Panel of Transition Countries (1990-2015)

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Listed:
  • Antonella Biscione
  • Raul Caruso

Abstract

This paper contributes to the literature on military spending by analyzing the relationship between military spending and income inequality in a panel of transition economies over the period 1990–2015. In particular, we exploit three different measures of military expenditures: (i) military spending in absolute terms; (ii) military expenditures per capita; (iii) military burden, namely the ratio between military expenditure and GDP. Findings highlight a positive relationship between military expenditures and income inequality captured by means of three different measures of inequality. Results are also confirmed after we performed a variety of robustness tests. Other results are worth noting and somehow puzzling. For example, military conscription appears to have a redistributional effect and when considering a non-linearity the results show that there could be a concave relationship between military spending and income inequality. In addition, when testing for the ‘crowding-out argument’ results show that expenditures for subsidies are negatively influenced by military spending so confirming the crowding-out argument but there is no significant evidence when considering education and health expenditures.

Suggested Citation

  • Antonella Biscione & Raul Caruso, 2021. "Military Expenditures and Income Inequality Evidence from a Panel of Transition Countries (1990-2015)," Defence and Peace Economics, Taylor & Francis Journals, vol. 32(1), pages 46-67, January.
    • Handle: RePEc:taf:defpea:v:32:y:2021:i:1:p:46-67
    DOI: 10.1080/10242694.2019.1661218
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    Citations

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    Cited by:

    1. Chletsos Michael & Roupakias Stelios, 2020. "The effect of military spending on income inequality: evidence from NATO countries," Empirical Economics, Springer, vol. 58(3), pages 1305-1337, March.
    2. Luqman, Muhammad & Antonakakis, Nikolaos, 2021. "Guns better than butter in Pakistan? The dilemma of military expenditure, human development, and economic growth," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    3. Idrys Fransmel Okombi & Fernand Owonda & Michel Okiemy, 2026. "Military spending and income inequality in Africa: effects and transmission channels," SN Business & Economics, Springer, vol. 6(4), pages 1-24, April.
    4. Meierrieks, Daniel, 2025. "The effect of terrorism on economic inequality in democracies and non-democracies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 86, pages 1-18.
    5. Kiryl Rudy, 2022. "Military Economy and Economic Growth: Bidirectional Effects in Transition Economies of Eurasia," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 14(3), pages 285-300, September.
    6. Antonella Biscione & Annunziata de Felice & Teodoro Gallucci, 2022. "Energy Saving in Transition Economies: Environmental Activities in Manufacturing Firms," Sustainability, MDPI, vol. 14(7), pages 1-17, March.
    7. Mduduzi Biyase & Hinaunye Eita & Thomas Bilaliib Udimal & Talent Thebe Zwane, 2024. "Does military spending affect inequality in South Africa? A revisit," Cogent Economics & Finance, Taylor & Francis Journals, vol. 12(1), pages 2421698-242, December.
    8. Caruso Raul & Antonella Biscione, 2022. "Militarization and Income Inequality in European Countries (2000–2017)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(3), pages 267-285, September.
    9. Dimitraki Ourania & Emmanouilidis Kyriakos, 2025. "Nonlinear Dynamics of Militarization and Income Inequality Nexus in Post-Socialist Eastern Europe: A Panel Kink Regression Analysis (1990–2023)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 31(3), pages 323-335.
    10. Masako Ikegami & Zijian Wang, 2023. "Does military expenditure crowd out health-care spending? Cross-country empirics," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(2), pages 1657-1672, April.
    11. Mduduzi Biyase & Hinaunye Eita & Thomas Udimal & Talent Zwane, 2022. "Military Spending and Inequality in South Africa: An ARDL Bound Testing Approach to Cointegration," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 75(2), pages 241-268.
    12. Adem Yavuz Elveren & Ünal Töngür & Tristian Myers, 2023. "Military spending and economic growth: A post-Keynesian model," Economics of Peace and Security Journal, EPS Publishing, vol. 18(2), pages 51-65, October.
    13. Caruso Raul & Antonella Biscione, 2022. "Militarization and Income Inequality in European Countries (2000–2017)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(3), pages 267-285, September.
    14. Eman Elish & Hossam Eldien Ahmed & Mostafa E. AboElsoud, 2023. "Military spending crowding out health and education spending: which views are valid in Egypt?," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-9, December.
    15. Ghouse, Ghulam & Iqbal, Mubasher, 2024. "Resource extraction, FinTech, and social equal access: A quantitative analysis of resource-rich countries," Resources Policy, Elsevier, vol. 99(C).

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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