Military expenditure and economic growth: A survey

J. Paul Dunne, Nan Tian

Abstract


Until recently, a long-standing, impressively large, and growing literature on the effects of military expenditure on economic growth appeared to have failed to result in a scholarly consensus. But the availability of 20 more years of data since the thawing of the cold war has helped researchers to make progress in identifying any relation of military expenditure with economic factors. The literature is complex and difficult to summarize, with studies differing in their theoretical approach, in the empirical methods used, in the coverage of countries and time periods employed, and in their quality and statistical significance. This article extends and updates an earlier survey, now covering almost 170 studies. It finds that more recent studies provide stronger evidence of a negative effect of military expenditure on economic growth.

Keywords


Military expenditure; economic growth

Full Text:

PDF

References


D’Agostini, G., J.P. Dunne, and L. Pieroni. 2012. “Corruption, Military Spending and Growth.” Defence and Peace Economics. Vol. 23, No. 2, pp. 591-604.

Baran, P. and P. Sweezy. 1966. Monopoly Capital. Monthly Review Press: London.

Benoit, E. 1973. Defense and Growth in Developing Countries. Boston, MA: Heath, Lexington Books.

Benoit, E. 1978. “Growth and Defense in Developing Countries.” Economic Development and Cultural Change. Vol. 26, No. 2, pp. 271-280.

Brauer, J. 1990. “Reviving or Revamping the 'Disarmament-for-Development' Thesis?” Bulletin of Peace Proposals. Vol. 21, No. 3, pp. 307-319.

Brauer, J. 2002. “The Arms Industry in Developing Nations: History and Post-Cold War Assessment,” pp. 101-127 in J. Brauer and J.P. Dunne, eds. Arming the South: The Economics of Military Expenditures, Arms Production and Trade in Developing Countries. London: Palgrave.

Brauer, J. and J.P. Dunne, eds. 2002. Arming the South: The Economics of Military Expenditures, Arms Production and Trade in Developing Countries. London: Palgrave.

Brauer, J. and J.P. Dunne, eds. 2004. Arms Trade and Economic Development: Theory, Policy, and Cases in Arms Trade Offsets. Routledge: London.

Brauer, J. 2002. “Survey and Review of the Defense Economics Literature on Greece and Turkey: What Have We Learned?” Defence and Peace Economics. Vol. 13, No. 2, pp. 85-107.

Brzoska, M. 2006. “Analysis of Recommendations for Covering Security Expenditures Within and Outside of Official Development Assistance.” Bonn, Germany: Bonn International Centre for Conversion, Research Paper No. 53.

Chan, S. 1987. “Military Expenditures and Economic Performance,” in World Military Expenditures and Arms Transfers. Washington, D.C.: U.S. Arms Control and Disarmament Agency.

Collier, P. 2007. The Bottom Billion. Oxford, UK: Oxford University Press.

Cuaresma, J.C. and G. Reitschuler. 2004. “A Non-linear Defence Growth Nexus? Evidence from the U.S. Economy.” Defence and Peace Economics. Vol. 15, No. 1, pp. 71-82.

Dunne, J.P. 1996. “Economic Effects of Military Expenditure in Developing Countries: A Survey,” chapter 23 in N.P. Gleditsch, ed. The Peace Dividend. Amsterdam: Elsevier.

Dunne, J.P., S. Perlo-Freeman, and A. Soydan. 2004. “Military Expenditure and Debt in Small Industrialized Economies: A Panel Analysis.” Defence and Peace Economics. Vol. 15, No. 2, pp. 125-132.

Dunne, J.P. and F. Coloumb. 2008. “Peace, War and International Security: Economic Theories,” pp. 13-36 in J. Fontanel and M. Chatterji, eds. War, Peace, and Security. Bingley, UK: Emerald.

Dunne, J.P., S. Perlo-Freeman, and R.P. Smith. 2008. “The Demand for Military Spending: Hostility versus Capability.” Defence and Peace Economics. Vol. 19, No. 2, pp 293-302.

Dunne, J.P. and E. Sköns. 2010. “Military Industrial Complex,” pp. 281-292 in in A. Tan, ed. The Global Arms Trade: A Handbook. London: Routledge London.

Dunne, J.P and R.P. Smith. 2010. “Military Expenditure and Granger Causality: A Critical Review.” Defence and Peace Economics. Vol. 21, No. 5-6, pp 427-441.

Dunne, J.P. and M. Uye. 2010. “Military Spending and Development,” pp. 293-305 in A. Tan, ed. The Global Arms Trade: A Handbook. London: Routledge.

Dunne, J.P. and N. Tian. 2013 (forthcoming).”Military Expenditure and Economic Growth: A Panel Analysis, 1988-2010.” Defence and Peace Economics.

Frederiksen, P. and R.E. Looney. 1983. “Defense Expenditures and Economic Growth in Developing Countries.” Armed Forces and Society. Vol. 9, No. 4, pp. 633-645.

Gleditsch, N.P,. et al. eds. 1996. The Peace Dividend. Amsterdam: Elsevier.

Gleditsch, N.P., A. Cappelen, and O. Bjerkholt. 1994. The Wages of Peace: Disarmament in a Small Industrialized Economy. Oslo: PRIO and Thousand Oaks, CA: Sage.

Joerding, W. 1986. “Economic Growth and Defense Spending; Granger Causality.” Journal of Development Economics. Vol. 21, pp. 35-40.

Knight, M., N. Loayza, and D. Villanueva. 1996. “The Peace Dividend: Military Spending Cuts and Economic Growth.” Washington, D.C.: World Bank Policy Research Working Paper No 1577.

Luca P. 2009. “Military Expenditure And Economic Growth.” Defence and Peace Economics. Vol. 20, No. 4, pp. 327-339.

Ram, R. 1995. “Defense Expenditure and Economic Growth,” pp. 251-274 in K. Hartley and T. Sandler, eds. Handbook of Defense Economics. Volume 1. Amsterdam: Elsevier.

[SIPRI] Stockholm International Peace Research Institute. Various years. Yearbook: World Armament and Disarmament. Oxford: Oxford University Press.

Smaldone, J.P. 2006. “African Military Spending: Defence versus Development?” African Security Review. Vol 15, No. 4, pp. 18-32.

Smith, D. and R.P. Smith. 1980. “Military Expenditure, Resources and Development.” University of London, Birkbeck College. Discussion Paper, No. 87 (November).

Smith, R.P. 2000. “Defence Expenditure and Economic Growth,” pp. 15-24 in N.P. Gleditsch, G. Lindgren, N. Mouhleb, S. Smit, and I. de Soysa, eds. Making Peace Pay: A Bibliography on Disarmament and Conversion. Claremont, CA: Regina Books.

Westley, C., W.L. Anderson, and S.A. Kjar. 2011. “War and the Austrian School: Ludwig von Mises and Friedrich von Hayek.” The Economics of Peace and Security Journal. Vol. 6, No. 1, pp. 28-33.




DOI: http://dx.doi.org/10.15355/epsj.8.1.5

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.