The relationship between military expenditure and economic growth has attract ample interest among economists as well as policy makers. The importance of expanding defence expenditure is ...substantially to coincide with national security and defence. The purpose of this study is to explore the impact of military expenditure on economic growth in Malaysia. An econometrics time series analysis is employed using ARDL estimates spanning from the year 1979 to 2017. The empirical findings reveal a negative relationship between military expenditure and Gross Domestic Products (GDP). Despite the inverse relationship between defence expenditure and economic growth, Malaysia should not neglect the investment on efficient military expenditure, as it has proven that in some countries, defence expenditure promotes a long run economic growth by promoting more job opportunities, protecting the nation and thus, achieving sustainable development. It is recommended to add more variables in future study that can relate security and defence for the country like numbers of crime, and numbers of migrants and refugees. Conclusively defence and security are the important factors for the country in generating the world and public’s confidence and to captivate foreign direct investment. Hence, adequate policy making on military expenditure are utmost important to promote economic growth
Using annual data collected from 1988 to 2015, this study provides evidence of a non-linear relationship between military spending, economic growth and other growth determinants for the South African ...economy. The empirical study is based on estimates of a logistic smooth transition regression (LSTR) model and our empirical results point to an inverted U-shaped relationship between military spending and economic growth for the data. Furthermore, our empirical results suggest that the current levels of military spending, as a component of total government expenditure, are too high in the South African economy and need to be transferred towards more productive non-military expenditure in order to improve the performance of economic growth and other growth determinants.
The paper presents evidence on the relationship concerning military spending among Southeast Mediterranean countries (Greece - Turkey, Israel - Egypt, Israel - Turkey) over the period 1962-2020. We ...account for the presence of nonlinearities in the bilateral relationships of defence spending by applying Threshold Autoregressive methodologies and utilize kink regression analysis to detect the existence of a country's military spending threshold that signals a threat to another country of the region. Our empirical results show: First, there is a nonlinear strategic interaction between the countries examined, in the sense that their defence spending policy is cointegrated. Second, there is no arms race among the countries examined, but only unilateral effects. Third, there is consistent evidence of a possible military spending equilibrium, in the absence of friction between the countries involved (peace threshold). Our findings have important policy implications as they indicate, first, that each country in the region should not determine its level of military spending considering only operational factors, but also considering the signaling of its military spending on its neighboring countries and, second, that there is space for peaceful solutions regarding disputes in the Southeast Mediterranean region.
In the post–Cold War period, scholars have considered the Asia Pacific to be ripe for military competition and conflict. Developments over the past decade have deepened these expectations. Across the ...region, rising military spending and efforts of various states to bolster their military capabilities appear to have created an increasingly volatile climate, along with potentially vicious cycles of mutual arming and rearming. In this context, claims that China's rapid economic growth and surging military spending are fomenting destabilizing arms races and security dilemmas are widespread. Such claims make for catchy headlines, yet they are rarely subject to rigorous empirical tests. Whether patterns of military competition in the Asia Pacific are in fact attributable to a security dilemma–based logic has important implications for international relations theory and foreign policy. The answer has direct consequences for how leaders can maximize the likelihood that peace and stability will prevail in this economically and strategically vital region. A systematic empirical test derived from influential theoretical scholarship on the security dilemma concept assesses the drivers of bilateral and multilateral frictions and military competition under way in the Asia Pacific. Security dilemma–driven competition appears to be an important contributor, yet the outcome is not structurally determined. Although this military competition could grow significantly in the near future, there are a number of available measures that could help to ameliorate or manage some of its worst aspects.
•Explore the role of social and military expenditure in generating political cycles.•Incumbents increase social-to-military expenditure ratio at election times.•This electoral tradeoff is larger in ...countries not involved in conflicts.•Some categories of social benefits are higher during left administrations.•Military spending is higher during right administrations.
This paper explores, theoretically and empirically, how governments may use the tradeoff between social and military expenditure to advance their electoral and partisan objectives. Three key results emerge. First, governments tend to bias outlays towards social expenditure and away from military expenditure at election times. Second, the size of this tradeoff is larger when we exclude countries involved in conflict, where national security plays an important role on voter choice. Third, while certain categories of social expenditure are higher during left administrations, military expenditure is higher during right administrations.
The relationship between government defence expenditure and economic growth is a debated topic. This study uses UK data for the period of 1960–2012 and applies two of the most prevailing theories ...used within the literature, the ‘Feder-Ram’ and the ‘augmented Solow’ models, to assess this question. We utilise traditional model specifications, alongside extensively altered versions of both models, enabling a comprehensive comparison between them. The alterations to the models include re-evaluating how core variables are expressed, inclusion of measures of conflict, the impact of recession, etc. The results show that the augmented Solow model outperforms the Feder-Ram model, and we provide some explanations for this result. In addition, our results suggest that military expenditure has a positive effect on economic growth within the UK, implying that the decision to reduce defence spending may have been detrimental to the UK economy.
Abstract The connection between the defence spending and real growth remains a forefront subject of theoretical and empirical research. Nigeria, like many other developing nations, continues to ...devote numerous fiscal resources to military spending in ensuring peaceful coexistence and to attain sustainable economic growth after her independence in 1960. Because the interdependence between them has policy implications, this paper studies whether there exists asymmetric causality between them. The dataset, from World Bank database, includes long‐range historical series for military expenditure/GDP ratio and growth rate of GDP, covering 1960–2021. In exploring the empirical relations, the paper shows evidence for the symmetric Granger causality, from Toda–Yamamoto (1995) and asymmetric causality, from Hatemi‐J (2012). The standard (symmetric) identifies unidirectional causality evidence, from defence spending to the GDP per capital growth, with no retained potential feedback from real growth to defence spending. The Hatemi‐J (asymmetric) causality maintains evidence that positive shocks in the defence spending may cause a positive shock in the GDP per capital, supposing that increase perturbations to defence spending would be productive and growth‐enhancing. This causal impact is not evident for positive growth shocks. The findings support the need for policymakers to consider sustained growth targets when redesigning the military budget.
This study investigates the relationship between military expenditure, state fragility and economic growth at regional economic communities of African countries. With a balanced panel of 34 African ...countries spanning 1990–2015. The variables of interest for this study include military expenditure, state fragility and economic growth. To measure economic growth, real gross domestic product per capita serves as the proxy, while state fragility is measured by the state fragility index, and military expenditure by military expenditure as a percentage share of GDP. We utilise: panel causality and cointegration test; and the generalised method of moments (GMM) estimation techniques. The causality results suggest a feedback relationship among our variables of interest and this justified the use of GMM. Our analysis suggests that the effect of military expenditure on growth is negative at Africa level with significant regional economic level differences, and this effect is influenced in the presence of state fragility. This imply that there exist complementary effects between military expenditure and state fragility on growth. A cut in military expenditure and a consideration of other means of dealing with fragility issues as an alternative to joint regional militarised intervention of regional governments of African countries is recommended.
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