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Military Expenditures and Political Regimes: An Analysis Using Global Data, 1963-2001

  • Unal Tongur

    ()

    (Department of Economics, METU)

  • Sara Hsu

    ()

    (State University of New York at New Paltz, USA)

  • Adem Yavuz Elveren

    ()

    (Department of Economics, METU and Sutcu Imam University)

This paper examines the determinants of military expenditures with a special focus on political regimes for more than 130 countries for the period of 1963-2001 by employing a dynamic panel data analysis. The paper aims at contributing to the literature by utilizing a recently constructed political regimes data set and considering income inequality, a key variable that has not received substantial attention in the context of political regimes, growth and military expenditures. Covering a large set of countries and an extended time period, the paper reveals further evidence on the linkage between democracy and military expenditures. Our results yield two crucial facts. First, social democratic political regimes have a tendency to spend less on armaments as a share of the national income; compared to social democracy all other political regimes are likely to have higher military burdens, confirming previous findings of the negative relationship between level of democracy and military burden. Second, the analysis shows that higher income inequality, regardless of the model specification and inequality measure, is associated with lower military burden.

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File URL: http://www.erc.metu.edu.tr/menu/series13/1307.pdf
File Function: First version, 2013
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Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 1307.

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Length: 44 pages
Date of creation: Jul 2013
Date of revision: Jul 2013
Handle: RePEc:met:wpaper:1307
Contact details of provider: Postal: Ankara 06531
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Web page: http://www.erc.metu.edu.tr
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  1. Garfinkel, Michelle R, 1994. "Domestic Politics and International Conflict," American Economic Review, American Economic Association, vol. 84(5), pages 1294-1309, December.
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  3. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  4. Albalate, Daniel & Bel, Germà & Elias, Ferran, 2012. "Institutional determinants of military spending," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 279-290.
  5. J. Paul Dunne & Ron Smith & Dirk Willenbockel, 2005. "Models Of Military Expenditure And Growth: A Critical Review," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(6), pages 449-461.
  6. J. Paul Dunne & Nan Tian, 2013. "Military expenditure and economic growth: A survey," Economics of Peace and Security Journal, Economists for Peace and Security, vol. 8(1), pages 5-11, April.
  7. Sandeep Baliga & David Lucca & Tomas Sjostrom, 2009. "Domestic Political Survival and International Conflict: Is Democracy Good for Peace?," Departmental Working Papers 200907, Rutgers University, Department of Economics.
  8. Alesina, Alberto & Spolaore, Enrico, 2005. "War, peace, and the size of countries," Journal of Public Economics, Elsevier, vol. 89(7), pages 1333-1354, July.
  9. Hamid Ali, 2007. "Military Expenditures And Inequality: Empirical Evidence From Global Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(6), pages 519-535.
  10. J Paul Dunne & Sam Perlo-Freeman & Ron P Smith, 2009. "Determining Military Expenditures: Arms Races and Spill-Over Effects in Cross-Section and Panel Data," Working Papers 0901, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  11. J Paul Dunne & Samuel Perlo-Freeman & Ron P Smith, 2007. "The Demand for Military Expenditure in Developing Countries: Hostility versus Capability," Working Papers 0707, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  12. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
  13. Paul Dunne & Sam Perlo-Freeman, 2003. "The Demand for Military Spending in Developing Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 23-48.
  14. Casey B. Mulligan & Xavier Sala-i-Martin & Ricard Gil, 2003. "Do Democracies Have Different Public Policies than Nondemocracies?," NBER Working Papers 10040, National Bureau of Economic Research, Inc.
  15. Rota, Mauro, 2011. "Military Burden and the Democracy Puzzle," MPRA Paper 35254, University Library of Munich, Germany.
  16. Alesina, Alberto & Spolaore, Enrico, 2006. "Conflict, defense spending, and the number of nations," European Economic Review, Elsevier, vol. 50(1), pages 91-120, January.
  17. Eric S. Lin & Hamid E. Ali, 2009. "Military Spending and Inequality: Panel Granger Causality Test," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(5), pages 671-685, September.
  18. Carlos Seiglie, 1997. "Deficits, Defense, and Income Redistribution," Cato Journal, Cato Journal, Cato Institute, vol. 17(1), pages 11-21, Spring/Su.
  19. Leonard Dudley & Claude Montmarquette, 1981. "The demand for military expenditures: An international comparison," Public Choice, Springer, vol. 37(1), pages 5-31, January.
  20. Mark Harrison & Nikolaus Wolf, 2012. "The frequency of wars," Economic History Review, Economic History Society, vol. 65(3), pages 1055-1076, 08.
  21. Hamid E. Ali, 2012. "Military Expenditures And Inequality In The Middle East And North Africa: A Panel Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(6), pages 575-589, December.
  22. Vincenzo Bove & Jennifer Brauner, 2011. "The Demand for Military Expenditure in Authoritarian Regimes," Birkbeck Working Papers in Economics and Finance 1106, Birkbeck, Department of Economics, Mathematics & Statistics.
  23. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  24. repec:cup:cbooks:9780521447287 is not listed on IDEAS
  25. Kemp-Benedict, Eric, 2011. "Political regimes and income inequality," Economics Letters, Elsevier, vol. 113(3), pages 266-268.
  26. Unal Tongur & Adem Yavuz Elveren, 2012. "Military Expenditures, Inequality, and Welfare and Political Regimes: A Dynamic Panel Data Analysis," ERC Working Papers 1210, ERC - Economic Research Center, Middle East Technical University, revised Dec 2012.
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