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Does Nation Building Spur Economic Growth?

Author

Listed:
  • Ellyn Creasey
  • EAcreasey@gmail.com

    (United States Navy)

  • Ahmed S. Rahman

    () (United States Naval Academy)

  • Katherine A. Smith

    () (United States Naval Academy)

Abstract

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.

Suggested Citation

  • Ellyn Creasey & EAcreasey@gmail.com & Ahmed S. Rahman & Katherine A. Smith, 2012. "Does Nation Building Spur Economic Growth?," Departmental Working Papers 36, United States Naval Academy Department of Economics.
  • Handle: RePEc:usn:usnawp:36
    as

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    File URL: http://www.usna.edu/EconDept/RePEc/usn/wp/usnawp36.pdf
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    References listed on IDEAS

    as
    1. Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993. "Good policy or good luck?: Country growth performance and temporary shocks," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 459-483, December.
    2. Tseday Jemaneh Mekasha & Finn Tarp, 2013. "Aid and Growth: What Meta-Analysis Reveals," Journal of Development Studies, Taylor & Francis Journals, vol. 49(4), pages 564-583, April.
    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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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Nation building and economic growth
      by Economic Logician in Economic Logic on 2012-02-28 21:28:00

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    Cited by:

    1. Axel Dreher & Vera Eichenauer & Kai Gehring, 2013. "Geopolitics, Aid and Growth," CESifo Working Paper Series 4299, CESifo Group Munich.
    2. Michael Insler & Bryce McMurrey & Alexander F. McQuoid, 2016. "From Broken Windows to Broken Bonds: Militarized Police and Social Fragmentation," Departmental Working Papers 53, United States Naval Academy Department of Economics.
    3. Dutta, Nabamita & Williamson, Claudia R., 2016. "Aiding economic freedom: Exploring the role of political institutions," European Journal of Political Economy, Elsevier, vol. 45(S), pages 24-38.
    4. Alexander F. McQuoid & J. Britton Haynes Jr., 2017. "The Thin (Red) Blue Line: Police Militarization and Violent Crime," Departmental Working Papers 56, United States Naval Academy Department of Economics.

    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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