A dynamic panel analysis using SIPRI’s extended military expenditure data: The case of Middle Power nations

Authors

  • Mohamed Douch Royal Military College, Kingston, Ontario, Canada.
  • Binyam Solomon Defence Research and Development, Department of National Defence, and Carleton University, Ottawa, Canada.

DOI:

https://doi.org/10.15355/epsj.11.2.45

Keywords:

Threat, nuclear arsenal, demand for military expenditure, Middle Powers nations, ARDL panel data

Abstract

This study employs SIPRI’s extended military expenditure dataset to estimate a dynamic panel analysis of Middle Powers’ defense posture. The dynamic approach, particularly the Auto Regressive Distributed Lag (ARDL) approach, permits simultaneous, but separate, assessment of short- and long-run effects of a particular variable on military expenditure. We verify the robustness of earlier findings on Middle Power nations’ defense posture. In particular, their military expenditure tends to an income elasticity of greater than one indicating that military power is, at least in part, a status good. In addition, Middle Powers react to threat variables that proxy global instability, such as nuclear power proliferation, and they use foreign aid as a complementary policy tool. Competing demands for funds lead to significant tradeoffs between military and nonmilitary government spending.

Author Biographies

Mohamed Douch, Royal Military College, Kingston, Ontario, Canada.

Associate Professor, Department of Management and Economics, Royal Military College, Kingston, Ontario, Canada.

Binyam Solomon, Defence Research and Development, Department of National Defence, and Carleton University, Ottawa, Canada.

Senior Defence Scientist, Defence Research and Development, Department of National Defence, and Adjunct Professor, Carleton University, both in Ottawa, Canada.

References

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Published

2016-10-01

How to Cite

Douch, M., & Solomon, B. (2016). A dynamic panel analysis using SIPRI’s extended military expenditure data: The case of Middle Power nations. The Economics of Peace and Security Journal, 11(2). https://doi.org/10.15355/epsj.11.2.45

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