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The Demand for Military Spending in Egypt

Author

Listed:
  • Aamer S. Abu-Qarn

    (Economics Department,Ben-Gurion University, Israel)

  • J Paul Dunne

    () (Department of Economics, University of the West of England)

  • Yasmine M. Abdelfattah

    (Department of Economics, British University in Egypt)

  • Shadwa Zaher

    (Department of Economics, British University in Egypt)

Abstract

Egypt plays a pivotal role in the security of the Middle East as the doorway to Europe and its military expenditure reflects its involvement in the machinations of such an unstable region, showing considerable variation over the last forty years. These characteristics make it a particularly interesting case study of the determinants of military spending. This paper presents such a study, estimating an econometric model of the Egyptian demand for military spending, taking into account important strategic and political factors. Both economic and strategic factors are found to play a role in determining military burden, with clear positive effects of lagged military burden, suggesting some sort of institutional inertia, plus negative output and net imports effects. The main strategic effect is the impact of Israel’s military burden, with no effect for that of the Jordanian and Syrian allies, but the results also suggest that simple arms race relationships are not an adequate representation of the relevant strategic factors.

Suggested Citation

  • Aamer S. Abu-Qarn & J Paul Dunne & Yasmine M. Abdelfattah & Shadwa Zaher, 2010. "The Demand for Military Spending in Egypt," Working Papers 1001, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  • Handle: RePEc:uwe:wpaper:1001
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    File URL: http://carecon.org.uk/DPs/1001.pdf
    File Function: First version, 2010
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    References listed on IDEAS

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    1. Christos Kollias & Suzanna-Maria Paleologou, 2003. "Domestic political and external security determinants of the demand for greek military expenditure," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 437-445.
    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. Abu-Qarn, Aamer S. & Abu-Bader, Suleiman, 2009. "On the dynamics of the Israeli-Arab arms race," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 931-943, August.
    4. Eftychia Nikolaidou, 2008. "The Demand For Military Expenditure: Evidence From The Eu15 (1961-2005)," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(4), pages 273-292.
    5. Smith, R P, 1989. "Models of Military Expenditure," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(4), pages 345-359, Oct.-Dec..
    6. Smith, R P, 1980. "The Demand for Military Expenditure," Economic Journal, Royal Economic Society, vol. 90(363), pages 811-820, December.
    7. Smith, Ron, 1995. "The demand for military expenditure," Handbook of Defense Economics,in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 4, pages 69-87 Elsevier.
    8. J. Paul Dunne & Sam Perlo-Freeman, 2003. "The demand for military spending in developing countries: A dynamic panel analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 461-474.
    9. J. Paul Dunne & Eftychia Nikolaidou & Nikolaos Mylonidis, 2003. "The demand for military spending in the peripheral economies of Europe," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 447-460.
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    Cited by:

    1. Yasmine M. Abdelfattah & Aamer S. Abu-Qarn & J. Paul Dunne & Shadwa Zaher, 2014. "The Demand for Military Spending in Egypt," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(3), pages 231-245, June.
    2. J. Paul Dunne & Sam Perlo-Freeman & Ron Smith, 2008. "The Demand For Military Expenditure In Developing Countries: Hostility Versus Capability," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(4), pages 293-302.
    3. 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.

    More about this item

    Keywords

    Egypt; demand for military expenditure; political determinants; strategic determinants;

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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