Military Spending and IMF Surveillance: An Assessment, 2008-2023

This paper examines how the International Monetary Fund (IMF) has addressed military spending in its multilateral and bilateral surveillance during 2008–2023. Using a comprehensive text review of IMF flagship publications, Regional Economic Outlooks, Article IV consultation reports, and program documents, the analysis assesses the scope, depth, and evenhandedness of Fund advice on military expenditure. The paper finds that military spending received limited and uneven coverage for much of the period. Of the 63 countries in which military spending was discussed in bilateral surveillance, fewer than 30 percent featured analysis of macroeconomic trade-offs, with most references limited to brief mentions or factual descriptions. The paper finds notable inconsistencies in treatment across countries with similar fiscal conditions and defense burdens, raising questions about evenhandedness in surveillance. Where military pending was analyzed, IMF advice focused appropriately on fiscal and balance of payments implications, in line with the IMF’s mandate and its Board guidance, while avoiding judgments on national security priorities.