Military Spending, Government Disarray, and Economic Growth: A Cross-Country Empirical Analysis

Recent years have seen a spate of empirical studies that have used cross-country regressions to examine a variety of possible determinants of long-term economic growth. The present study considers an additional, largely overlooked, explanatory variable: military spending. Consistent with Thompson’s...

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Bibliographic Details
Published in:Journal of macroeconomics 1997-10, Vol.19 (4), p.827-838
Main Author: Brumm, Harold J.
Format: Article
Language:English
Subjects:
Bibliographic literature
Consumption
Defense spending
Developing countries
Economic growth
Economic models
Economic theory
Enrollments
Financial services
GDP
Gross Domestic Product
Growth rate
Human capital
Hypotheses
LDCs
Macroeconomics
Military expenditure
Per capita
Political science
Population growth
Property rights
Random variables
Regression analysis
Studies
Citations: Items that cite this one
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Summary:Recent years have seen a spate of empirical studies that have used cross-country regressions to examine a variety of possible determinants of long-term economic growth. The present study considers an additional, largely overlooked, explanatory variable: military spending. Consistent with Thompson’s (1974) hypothesis that enhanced national defense fosters economic growth by increasing the security of property rights, the military expenditures share of GDP is found to have a statistically significant positive impact on the growth rate of per capita GDP. This result is obtained for two alternative model specifications, a Barro-regression and a LISREL variant of that regression. The LISREL variant is motivated by Sala-i-Martin’s (1994) claim that the impact of government economic policies jointly, rather than extant government policies individually and separately, is "the phenomenon that really matters" for long-term economic growth.
ISSN:0164-0704
1873-152X
DOI:10.1016/S0164-0704(97)00044-X