A good investment in sustainable development? A literature review on the economic and social effects of military spending

Global military spending reaches record highs every year. Much of the academic debate focusses on the implications for security. Its impact on social and economic development receives less attention. This article conducts a literature review of 140 studies published between 2010 and 2024 on the effects of military spending. It finds that they were not influenced by the theoretical frameworks or methods employed. It further concludes that rising defence expenditures frequently impair economic growth, increase public debt and contribute to income inequality. However, the consequences are context specific. In high-income countries defence investments may generate positive externalities for the economy. Additionally, there is a reduced risk of financing the defence sector through increased public debt or decreased social spending. Still, one generally observes negative effects on employment rates and income equality. In less affluent countries, adverse effects on economic growth and debt are more widespread. There is also a greater risk of military spending crowding out welfare expenditures. Therefore, military spending is usually not a good investment for sustainable development. However, there may be exceptions. In some countries, an investment in the military may be – up to a point – an investment in security, which benefits sustainable development.