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Military Spending and Development


  • J Paul Dunne

    () (Department of Economics, British University in Egypt and UWE, Bristol)

  • Mehmet Uye

    () (Department of Economics, UWE, Bristol)


This paper considers the link between arms spending and economic growth for developing countries, in particular whether high spending on arms is likely to have a negative effect on economic growth and what benefits that might be gained by reducing it. The literature is complex and difficult to summarize, with studies differing theoretically, in the empirical methods they use, in the coverage of countries and time series, and in their quality and significance. Nevertheless, the paper argues that the empirical analyses suggests that there is little or no evidence for a positive effect on economic growth and that it is more likely to have a negative effect, or at best no significant impact at all. Thus, reducing arms and military spending need not be costly and can contribute to, or at the very least provide the opportunity for, improved economic performance in developing countries.

Suggested Citation

  • J Paul Dunne & Mehmet Uye, 2009. "Military Spending and Development," Working Papers 0902, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  • Handle: RePEc:uwe:wpaper:0902

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    References listed on IDEAS

    1. Biswas, Basudeb & Ram, Rati, 1986. "Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 34(2), pages 361-372, January.
    2. 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.
    3. Jesús Crespo Cuaresma & Gerhard Reitschuler, 2004. "A non-linear defence-growth nexus? evidence from the US economy," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(1), pages 71-82, February.
    4. Malcolm Knight & Norman Loayza & Delano Villanueva, 1996. "The Peace Dividend: Military Spending Cuts and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 1-37, March.
    5. Luca Pieroni, 2009. "Military Expenditure And Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 327-339.
    6. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, March.
    Full references (including those not matched with items on IDEAS)


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    Cited by:

    1. d'Agostino, G. & Dunne, J.P. & Pieroni, L., 2011. "Optimal military spending in the US: A time series analysis," Economic Modelling, Elsevier, vol. 28(3), pages 1068-1077, May.
    2. J Paul Dunne, 2011. "Military Keynesianism: An Assessment," Working Papers 1106, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    3. G. Idrisov & S. Sinelnikov-Murylev., 2013. "Budget Policy and Economic Growth," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 8.
    4. Kimbambu Tsasa Vangu, Jean - Paul, 2012. "Analyse de la Relation Guerres Civiles et Croissance Économique
      [Civil Wars and Economic Growth in DRC]
      ," MPRA Paper 42424, University Library of Munich, Germany, revised 05 Feb 2012.
    5. Giorgio d'Agostino & J Paul Dunne & Luca Pieroni, 2016. "How much does military spending affect growth? Causal estimates from the World's non-rich countries," SALDRU Working Papers 196, Southern Africa Labour and Development Research Unit, University of Cape Town.
    6. Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2009. "Optimal Military Spending in the US: A Time Series Analysis," Working Papers 0903, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    7. repec:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0360-z is not listed on IDEAS
    8. J Paul Dunne, 2011. "Military Spending, Growth, Development and Conflict," Working Papers 1105, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    9. Muhammad Shahbaz & Talat Afza & Muhammad Shahbaz Shabbir, 2013. "Does Defence Spending Impede Economic Growth? Cointegration And Causality Analysis For Pakistan," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(2), pages 105-120, April.
    10. Dietrich Fischer & Jurgen Brauer, 2003. "Twenty questions for peace economics: A research agenda," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(3), pages 223-236.

    More about this item


    Military Spending; Development; growth;

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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