Natural resources and military expenditure: The case of Algeria


  • Sam Perlo-Freeman
  • Jennifer Brauner



Natural resources, petroleum, military expenditure


With world military expenditure rising rapidly since 2000, one of the possible drivers that has drawn less attention has been the role of natural resource revenues, especially oil. Countries as diverse as Angola, Azerbaijan, Chad, Iraq, Kazakhstan, Nigeria, and Timor-Leste have seen huge rises in military expenditure on the back of rapidly increasing oil revenues. Natural resource extraction can generate conflict and create an imperative to protect resource infrastructure from internal or external threats. At the same time it provides a ready source of government revenue, and in particular foreign currency. The lack of transparency often associated with such revenues may facilitate off-budget spending or large, and possibly corrupt, arms purchases. Up to now, most econometric research has not considered the role of resource revenues as a determinant of military expenditure. We provide a preliminary analysis for the case of Algeria, estimating military expenditure as a function of oil revenues and other economic and security factors from 1975 to 2008. We find some evidence that oil revenues have had a statistically significant positive effect on Algerian military expenditure.


Addi, L. 1998. “Algeria’s Army, Algeria’s Agony.” Foreign Affairs. Vol. 77, No. 4, pp. 44-53.

Bannon, I. and P. Collier, eds. 2003. Natural Resources and Violent Conflict: Options and Actions. Washington, D.C.: World Bank.

Central Intelligence Agency. 2010. “Algeria,” in The World Factbook. [accessed 7 April 2010].

Collier, P. and A. Hoeffler. 2004. “Greed and Grievance in Civil Wars.” Oxford Economic Papers. Vol. 56, pp. 663-695.

Cook, S.A. 2007. Ruling But Not Governing: The Military in Political Development in Egypt, Algeria, and Turkey. Baltimore, MD: The John Hopkins University Press.

Courtney, C. 2002. “Corruption in the Official Arms Trade.” Transparency International Policy Research Paper 001. London: Transparency International.

Deger, S. 1986. “Economic Development and Defense Expenditure.” Economic Development and Cultural Change. Vol. 35, No. 1, pp. 179-196.

Deger, S. and R. Smith. 1983. “Military Expenditure and Growth in Less-developed Countries.” Journal of Conflict Resolution. Vol. 27, No. 2, pp. 335-353.

[EIA] Energy Information Administration. 2010. “Country Analysis Briefs: Algeria.” Updated May 2009. [accessed 7 April 2010].

Entelis, J.P. 1999. “Sonatrach: The Political Economy of an Algerian State Institution.” Middle East Journal. Vol. 53, No. 1, pp. 9-27.

Gelfand, L. 2009. “Spending to Thrive.” Jane’s Defence Weekly. Vol. 46, No. 4, pp. 22-27.

Hendrickson, D. and N. Ball. 2002. Off-Budget Military Expenditure and Revenue: Issues and Policy Perspectives for Donors. CSDG Policy Studies #2. Conflict, Development, and Security Group. London: Department of War Studies, King’s College London.

Hodler, R. 2006. “The Curse of Natural Resources in Fractionalised Countries.” European Economic Review. Vol. 50, pp. 1367-1386.

Kaldor, M., T.L. Karl, and Y. Said, eds. 2007. Oil Wars. London: Pluto Press.

Karl, T. 1997. The Paradox of Plenty: Oil Booms and Petro-States. Berkeley, CA: University of California Press.

LeBillon, P. 2005. Geopolitics of Resource Wars: Natural Resources and Armed Conflicts. London: Routledge.

Leigh, D. and R. Evans. 2007. “The Al Yamamah Deal.” The Guardian. 7 June 2007.

Oyefusi, A. 2007. “Oil-Dependence and Civil Conflict in Nigeria.” Working Paper WPS/2007-09. Centre for the Study of African Economies. Oxford University.

Perlo-Freeman, S., C. Perdomo, E. Sköns, and P. Stålenheim. 2009. “Military Expenditure.” Chapter 5 in SIPRI Yearbook 2009. Oxford: Oxford University Press.

Perlo-Freeman, S., O. Ismail, and C. Solmirano. 2010. “Military Expenditure.” Chapter 5 in SIPRI Yearbook 2010. Oxford: Oxford University Press.

Perlo-Freeman, S., C. Cooper, O. Ismail,, E. Sköns, and C. Solmirano. 2011. “Military Expenditure.” Chapter 4 in SIPRI Yearbook 2011. Oxford: Oxford University Press.

Ross, M.L. 2001. Extractive Sectors and the Poor. New York: Oxfam America Report.

Ross, M.L. 2004. “What Do We Know About Natural Resources and Civil War?” Journal of Peace Research. Vol. 41, No. 3, pp. 337-356.

Sorenson, D.S. 2007. “Civil-Military Relations in North Africa.” Middle East Policy. Vol. 14, No. 4, pp. 99-114.

Stone, M. 1997. The Agony of Algeria. London: Hurst.

Vatanka, A. and R. Weitz. 2007. “Russian Roulette.” Jane’s Intelligence Review. Vol. 19, No. 1, pp. 36-41.




How to Cite

Perlo-Freeman, S., & Brauner, J. (2012). Natural resources and military expenditure: The case of Algeria. The Economics of Peace and Security Journal, 7(1).




Similar Articles

1 2 3 4 5 6 7 8 9 10 > >> 

You may also start an advanced similarity search for this article.