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Does Nation Building Spur Economic Growth?

Listed author(s):
  • Ellyn Creasey
  • EAcreasey@gmail.com

    (United States Navy)

  • Ahmed S. Rahman

    ()

    (United States Naval Academy)

  • Katherine A. Smith

    ()

    (United States Naval Academy)

Nation building, the simultaneous allocation of economic and military aid in con- ict environments, has cost the world trillions of dollars over the last half century. Yet few attempts have been made to quantify the potential growth eects for the recip- ient country from the provision of this aid. Using a forty-ve year panel dataset, we construct a measure of nation building using a three-way interaction term between military assistance, economic aid, and conict regime. We nd that spending on na- tion building has a positive eect on economic growth. Once conict ceases, however, continued military operations coupled with economic aid harms growth.

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File URL: http://www.usna.edu/EconDept/RePEc/usn/wp/usnawp36.pdf
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Paper provided by United States Naval Academy Department of Economics in its series Departmental Working Papers with number 36.

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Length: 45 pages
Date of creation: Jan 2012
Handle: RePEc:usn:usnawp:36
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  1. William Easterly & Michael Kremer & Lant Pritchett & Lawrence H. Summers, 1993. "Good Policy or Good Luck? Country Growth Performance and Temporary Shocks," NBER Working Papers 4474, National Bureau of Economic Research, Inc.
  2. Tseday Jemaneh Mekasha & Finn Tarp, 2011. "Aid and Growth What Meta-Analysis Reveals," WIDER Working Paper Series 022, World Institute for Development Economic Research (UNU-WIDER).
  3. Kosuke Imai & Jeremy Weinstein, 2000. "Measuring the Economic Impact of Civil War," CID Working Papers 51A, Center for International Development at Harvard University.
  4. Yamarik Steven J & Johnson Noel D & Compton Ryan A, 2010. "War! What Is It Good For? A Deep Determinants Analysis of the Cost of Interstate Conflict," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(1), pages 1-35, September.
  5. Caplan, B., 2002. "How does war shock the economy?," Journal of International Money and Finance, Elsevier, vol. 21(2), pages 145-162, April.
  6. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  7. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
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