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Does Nation Building Spur Economic Growth?

  • 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
Date of revision:
Handle: RePEc:usn:usnawp:36
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  1. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  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. 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.
  4. 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.
  5. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
  6. Caplan, B., 2002. "How does war shock the economy?," Journal of International Money and Finance, Elsevier, vol. 21(2), pages 145-162, April.
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