Do Military Expenditures Crowd-out Health Expenditures? Evidence from around the World, 2000–2013

Abstract

The paper examines the relationship between health and military expenditures using pooled cross-sectional (197 countries) and time series (2000–2013) data. Simultaneous equation models were employed to estimate the relationship between an array of public sector expenditures in order to address potential endogeneity. Our empirical findings strongly support the crowding-out hypothesis whereby increased military expenditures reduce the capacity of government to direct expenditures to health expenditures. These findings were robust to alternative specifications explored in the sensitivity analyses. Compared with upper-middle-income countries, the crowding-out effect became more pronounced among lower-middle-income countries. Consequently, this study shows that increased military expenditures negatively impacts health expenditures, and therefore poses as an important risk factor for population health and individual well-being. Moreover, it is the poorest of nations that are most sensitive to the negative effects of increased military expenditures.     

The Demand for Military Expenditure in Europe: The Role of Fiscal Space in the Context of a Resurgent Russia

A variant of established work on the demand for military expenditure is developed based on a practical concept of fiscal space from the perspective of short-term government choices concerning public expenditures. A new indicator, referred to as fiscal capacity, is defined and used as a candidate explanatory variable in an empirical model of European defence spending over the 2007–2016 period. Fiscal capacity is found to outperform simpler measurements of economic conditions, notably GDP growth forecasts, in explaining changes in defence spending efforts as a share of GDP. Regarding security environment variables, the results suggest that Russia has recently come to be seen as a potential military threat by European nations, leading to defence spending increases, the more so the shorter the distance to stationed or deployed Russian forces, and particularly so by those European nations that have a land border with Russia. A prospective exercise is then carried out in order to assess the capacity of EU member states that are also members of NATO to reach NATO’s 2% goal for defence spending over a mid-term horizon.     

Allies with Benefits: US Effect on European Demand for Military Expenditures

This paper examines the security relationship between the US and Europe, focusing on potential spillin effects of US military expenditures on European demand for military expenditures during the early twenty-first century. The goal is to test whether or not European states view US expenditures as a complement or as a substitute to their own military expenditures. Past work in this area has found mixed results concerning the effect of US military expenditures, but focus strictly on the spillins within a formal alliance, specifically NATO, and use a time series dominated by Cold War dynamics. This study differentiates itself by accounting for both US total military expenditures and its regional expenditures through incorporation of US military base and personnel deployments across Europe. Additionally, this paper uses government revenue in its estimation to mitigate potential endogeneity. Findings using Arellano–Bond dynamic panel analysis suggest that there is a strong probability of substitution among European states.     

Civil Wars,International Conflicts and Other Determinants of Paramilitary Strength in Sub-Saharan Africa

Previous research on African military spending suggests the existence of civil strife as the best predictor of high levels of military spending. However, little is known about why some African nations maintain strong ‘auxiliary’ or paramilitary organizations while others do not. This study finds that the presence of civil or interstate war does not strengthen reserve or irregular forces. Civilian governments promote strong paramilitary organizations to counter any threat the regular military might pose to regime survivability as a form of clientelist politics.     

The Persistent Military Security Dilemma between China and India

This paper evaluates to what extent the improving Sino-Indian relations coincide with a mitigation of military threat perceptions. A critical review of the demilitarisation of the border, the military strategies with respect to the Indian Ocean and nuclear arms programmes, reveals that the two countries are still locked in a military security dilemma. Distrust still results in military balancing. The outcome is a complex and multi-level military balance of power that might not bring about peace but enhances stability.     

Military Expenditures,Income Inequality,Welfare and Political Regimes: A Dynamic Panel Data Analysis

The goal of this paper is to investigate the relationship between type of welfare regimes and military expenditures. There is a sizeable empirical literature on the development of the welfare state and on the typology of the welfare regimes. There appear to be, however, no empirical studies that examine welfare regimes with special attention to military spending. This study aims at providing a comprehensive analysis on the topic by considering several different welfare regime typologies. To do so, we use dynamic panel data analysis for 37 countries for the period of 1988–2003 by considering a wide range of control variables such as inequality measures, number of terrorist events, and size of the armed forces. We also replicate the same analyses for the political regimes. Our findings, in line with the literature, show that there is a positive relationship between income inequality and share of military expenditures in the central government budget, and that the number of terrorist events is a significant factor that affects both the level of military expenditure and inequality. Also, the paper reveals a significant negative relationship between social democratic welfare regimes and military expenditures.     

MILITARY EXPENDITURE AND ECONOMIC GROWTH IN MIDDLE EASTERN COUNTRIES: A DYNAMIC PANEL DATA ANALYSIS

Defence expenditures have both costs and benefits to the economy. The costs of defence expenditures are mainly emphasized as opportunity costs. On the other hand, defence spending may have growth‐promoting potential benefits: a rise in defence spending may result in a higher aggregate demand, production and employment. This paper examines empirically the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time‐period 1989–1999. The relationship between military expenditure and economic growth is investigated by using cross‐section and dynamic panel estimation techniques. Empirical analysis indicates that military expenditure enhances economic growth in the Middle Eastern countries and Turkey as a whole.     

Does military spending promote social welfare? A comparative analysis of the BRICS and G7 countries

Whether military spending is capable of promoting social welfare is currently a controversial issue. The aim of this paper is to investigate how military spending affects the input and output of social welfare (i.e. social welfare expenditures and social welfare index). A panel cointegration analysis and an impulse response function are conducted with multi-country panel data, over two time periods, 1998–2011 and 1993–2007. In addition, to extend a comparative analysis over different economies, BRICS (i.e. Brazil, Russia, India, China, South Africa) and G7 (i.e. the US, Japan, Germany, the UK, France, Italy, Canada) countries are selected as representatives of emerging economies and developed countries, respectively. The empirical results show that military spending enhances social welfare expenditures in developed countries, while the effect is ambiguous in emerging economies. Also, military spending is capable of promoting the social welfare index based on the FMOLS estimation. The comparative analyses indicate that unlike in the G7, the effect of the growth of military spending on the growth of social welfare expenditures is negative and shorter in the BRICS.     

Military expenditure and the profit rate in Greece

This paper examines the effect of military expenditure on the profitability of the Greek economy for the 1962-1994 period. In the theoretical debate on the role of military expenditures they have alternatively been viewed either as a "burden on growth" (i.e. an unproductive drain of resources) or as a stimulating factor for demand, profitability and economic performance. This distinction is reflected in the Marxist tradition as well where in different theories of crisis, military expenditures have been treated either as an unproductive burden or as a savior of the capitalist system, mainly through their effect on the rate of profit. Our empirical tests for the relationship between military expenditure, the general Marxian rate of profit and the net rate of profit indicate that those expenditures have had a contradictory effect on profitability, stimulating effective demand in the short run, but affecting negatively both rates of profit over the long run.     

Drone usage by militant groups: exploring variation in adoption

Judging by recent media reporting and pronouncements by senior US military and security officials, the use of drones by militant groups is both reshaping conflict between armed non-state actors and state parties and now presents a grave and direct threat to nations in the West and elsewhere. But does this threat warrant the attention it is currently receiving? To answer this question, this article surveys how various militant groups have used drones both tactically on the battlefield and for wider strategic purposes. Closely examining how drones have been employed and by whom provides a basis for understanding variation in adoption. The article shows how drone usage or non-usage is highly contingent on the setting of the conflict, the aims of different groups, and the capacity of groups to adopt the technology. Though advances in drone technology could make the use-case more appealing for militant groups, drones will be subject to the same back-and-forth, techno-tactical adaptation dynamic between adversaries that have accompanied prior military innovations.     

The impact of defence expenditures on Arab industrial development

The purpose of this paper is to examine the role of military expenditures in affecting the pattern of Arab industrial development. In doing so, it attempts to determine whether military expenditures have stimulated increased levels of industrial output, or whether, through diverting resources away from industrial activity, they have depressed the expansion of the region's industrial diversification.

By the use of factor and regression analysis, the main finding of the study is that defence expenditures in the Arab world have been somewhat neutral in impacting on industrial output. In contrast, the study found that non‐defence expenditures have tended to retard the region's industrial diversification efforts.

These findings suggest that analysis of the relative skill intensities of civilian and defence expenditures might be a fruitful area for further research into the process of Arab industrialization.     

What Goes Up Must Come Down: Military Expenditure and Civil Wars

Abstract

This paper examines the impact of civil war on military expenditure. We employ two measures of military expenditure: the share of military expenditure in general government expenditure and the logarithm of military expenditures. We would reasonably expect a priori that military expenditure as a share of general government expenditure increases during a civil war and that such increases would taper off over the duration of a civil war. We also explore whether the termination of a civil war induces a decline in the share of military expenditure as a share of the general government expenditure in the short-run. We find evidence the of share of military expenditure increases during a civil war and falls in the year succeeding the end of a civil war, and, in particular, if a war ends in a peace treaty. The level of military expenditures, however, rises during civil wars and does not appear to decline in the short-term after the end of a civil war.     

TIME-VARYING CHARACTERISTICS OF SOUTH KOREA-UNITED STATES AND JAPAN-UNITED STATES MILITARY ALLIANCES UNDER CHINESE THREAT: A PUBLIC GOOD APPROACH

This paper investigates the nature of two military alliances under Chinese threat. The findings are as follows: First, South Korea does not consider China a significant threat while Japan and the United States have recognized China as a serious threat since the 1990s and the 2000s, respectively. Second, the relationship between South Korea and the United States is a true military alliance for all time periods, but the nature of the alliance has changed since the 1970s. Third, although Japan began to form an alliance relationship with the United States in the 1990s, Japan is considered a more significant ally by the United States. This paper implies that, should China provoke a military confrontation, it might be difficult to deduce a common solution among the three countries because of the different response to military threats from China.     

美军航天力量发展走势分析

美军一直奉行全球战略极度依赖天基信息支援。美军航天力量在夺取制天权,确保战时进入、利用太空自由,为海外军事行动提供信息支撑方面发挥决定性作用。美军认为航天领域颠覆性技术的应用将会迅速而深刻地颠覆传统战争规则,是应对新兴国家军事威胁,实施第三次"抵消战略"的核心技术。美军高度重视航天力量装备规划、体制编制、理论研究和人才培养的创新发展。研究近年来美军航天力量的建设发展重点,可以透过其一系列的航天力量发展规划,得出美军航天力量发展战略和走势,具有强的启示性。     

The nexus between military expenditures and economic growth in the BRICS and the US: an empirical note

This empirical note re-examines the causal linkages between military expenditures and economic growth for the BRICS countries (Brazil, Russia, India, China, and South Africa) and that for the USA during the period 1988–2012. Results of Granger causality tests show that military expenditures influence economic growth in the USA, economic growth influences military expenditures in both Brazil and India, a feedback between military expenditures and economic growth in Russia, and no causal relation exists between military expenditures and economic growth in China and South Africa. The findings of this study can provide important policy implications for the BRICS countries and also for the USA.     

Research communication security in the 90s: A view from the UK

This paper develops a methodology for measuring the capital value of military assets in monetary terms. We distinguish between two military capital measures. One measure, called the value of military capital (services) summarizes the value of military defense assets during a particular year. A comparison of the capital‐services value of U.S. and Soviet tactical combat aircraft is provided for the period 1970–1984.

One feature of the capital‐services measure that makes it particularly interesting is that its size can be compared with such military expenditures as operating and support. While these latter expenditures reflect the readiness of a defense establishment, the relevant capital‐services measure reflects force structure and modernization.

A second measure, called the value of military capital (wealth), summarizes the military benefits obtained from defense assets over the remainder of their service lives. This measure depreciates the capital as it ages, and is useful for comparing military wealth with other types of wealth in the economy. We provide this measure for the U.S. military capital stock for 1925–1984.     

The rising unit cost of defence equipment — The reasons and the results

This paper constructs a conceptual model for the selection of defence equipment providing best value for money. It then shows how the unit cost of the chosen equipment increases between one generation of equipment and its successor because of developments in the perceived threat, the available technology and industrial productivity, and demonstrates that unit cost increases can arise from a logical and rational procurement policy and are not necessarily caused by technological chimeras and military vainglory. The resulting persistent rise in unit cost is unlikely to be significantly slowed by any of the counter‐measures yet proposed.

The paper then discusses the policies which nations have adopted to accommodate past increases in unit cost, and the options which confront any nation at the point when it can no longer afford to re‐equip a particular element of its armed forces.     

The impact of military spending and income inequality on economic growth in Turkey

An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963–2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.     

Boko Haram’s increasingly sophisticated military threat

ABSTRACT

This paper evaluates Boko Haram’s military capabilities and details the process of how its standing army, driven by these capabilities, came to pose a phased threat between 2013 and 2015 in particular. This was a period when military fighting dominated the insurgency in north-east Nigeria. Whereas there is an abundance of literature on Boko Haram’s histories and the impact of its insurgency on north-east Nigeria, analysis of Boko Haram’s military campaigning is still deficient. Attempting to fill this gap, this paper uses field findings and battlefield case studies from north-east Nigeria to highlight how Boko Haram’s overt front – its standing army – came to supplant its guerrilla operations as the main security threat to the frontier area.

This pivot towards military fighting, for a group initially composed of a few ragtag combatants, on the surface might seem surprising. Yet, whereas Boko Haram may lack the popular support required for ‘people’s war’, classic insurgency theories nevertheless hold some explanatory power for this deliberate shift: away from guerrilla warfare as the expedient of the weaker side, and towards the use of a large standing army of locals to swarm, and sometimes successfully overrun, state forces.     

空天防御效能指标及其标准值的确定方法

空天领域的对抗决定了未来军事行动的进程和战争的胜败,空天威胁也已经成为各国国家军事安全的主要威胁。军事强国的全球打击系统、快速打击系统和弹道导弹的迅猛发展使得未来空天防御作战环境越来越复杂,也对空天防御作战提出了更高要求。空天防御是信息化空天时代的主要作战样式之一,是维护国家安全的重要屏障。本文提出了空天防御的充分性准则以及保证空天防御充分性的主要途径,分析了拟制空天防御力量行动方案的一般流程。文中所提出的空天防御效能指标以及确定和保证标准值指标的方法,能够从经济学视角较为合理、充分地构建和实施空天防御,对空天防御作战规划理论建议有一定参考价值,也能为发展空天防御作战规划系统提供研究思路和技术支撑。