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.