Military expenditure and economic growth in Middle Eastern countries and Turkey: a non-linear panel data approach

The economic growth effects of military expenditure have been the subject of a large literature in defence economics. Theories on the economic impacts of military expenditure greatly differ and include arguments that they either enhance economic growth or crowd out productive investments. Empirical literature on defence expenditure and economic growth nexus generally employs linear specifications to investigate the impact of defence expenditures on economic growth. Although it is now well established that many economic variables may have a non-linear data-generating mechanism, it seems that this reality has long been neglected in empirical work on defence–growth nexus. This paper attempts to fill this gap by employing non-linear panel data models to examine the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time period 1988–2012. Results show that the effect of military expenditure on economic growth is nonlinear such that the state of the economy actually determines the effect of the former on the latter. This is important not only in showing asymmetric relationship between these variables but also in revealing the reasons of mixed results of earlier literature.     

Quality risk in outsourcing: Noncontractible product quality and private quality cost information

This article addresses the concept of quality risk in outsourcing. Recent trends in outsourcing extend a contract manufacturer's (CM's) responsibility to several functional areas, such as research and development and design in addition to manufacturing. This trend enables an original equipment manufacturer (OEM) to focus on sales and pricing of its product. However, increasing CM responsibilities also suggest that the OEM's product quality is mainly determined by its CM. We identify two factors that cause quality risk in this outsourcing relationship. First, the CM and the OEM may not be able to contract on quality; second, the OEM may not know the cost of quality to the CM. We characterize the effects of these two quality risk factors on the firms' profits and on the resulting product quality. We determine how the OEM's pricing strategy affects quality risk. We show, for example, that the effect of noncontractible quality is higher than the effect of private quality cost information when the OEM sets the sales price after observing the product's quality. We also show that committing to a sales price mitigates the adverse effect of quality risk. To obtain these results, we develop and analyze a three‐stage decision model. This model is also used to understand the impact of recent information technologies on profits and product quality. For example, we provide a decision tree that an OEM can use in deciding whether to invest in an enterprise‐wide quality management system that enables accounting of quality‐related activities across the supply chain. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009     

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.     

周恩来建设人民海军的理论和实践

周恩来协助毛泽东开创了中国人民海军事业。他高瞻远瞩,为人民海军的创建发展做好顶层设计;他呕心沥血,制定新中国海军建设的战略规划;他事必躬亲,操劳着海军建设方方面面的具体事项;他英明善断,指挥部署人民海军重要战役和重大行动。他对创建和发展年轻的共和国海军,作出了不可磨灭的贡献。周恩来建设人民海军的理论和实践,对今天的海军建设仍具有重要的理论价值和实践意义。     

Budgetary trade-offs of security expenditures in Turkey

This paper investigates the budgetary trade-off structure of security (defence+internal security) expenditures in Turkey for the period 1983-1998. A modified version of Todaro's distributive share index of social welfare is used to quantify the impacts on the growth of primary budget expenditures of Security, Education, Health, General Administration, Infrastructure, and Social Services. We find that defence expenditures dominate overall security expenditures and are less affected in times of bottlenecks in the economy. A systematic pattern of negative budgetary trade-offs of security expenditures in terms of other components is not identified. We also analyse the expenditures of the Defence Industry Support Fund in an attempt to find the cost of the modernisation program to the economy.     

AN ECONOMIC ANALYSIS OF SECURITY POLICIES

This paper analyses public policy choices in the security economy from an economic perspective. It discusses the role of public goods for national and global security and identifies the importance of the first‐ and second‐order indirect effects of insecurity on economic activity, which include the behavioural responses of agents and the government to security measures, akin to such effects in insurance economics. Furthermore, key public policy trade‐offs are outlined, in particular between security and efficiency, globalisation, equity and freedom. The analysis identifies suitable policy options for raising security in the national and international contexts and in view of these trade‐offs. A balance between market and non‐market instruments in achieving security should be aimed for in order to minimise the adverse effects of aiming for higher security. In addition, the public good nature of security implies that international coordination of security policies is important, despite this process being fraught with enforcement problems.     

CRISIS RESPONSE CAPABILITY

As the leading economic and political power in the region, South Africa cannot afford to neglect its responsibility toward its regional neighbours. If South Africa does not accept the role, an outside power may step in to fill the vacuum. The creation of peace, security and stability will not be created without action and it will not be maintained by goodwill. Developing a crisis response force is clearly required of South Africa. The force should be able to work co-operatively or autonomously in a range of missions n land and on rivers and lakes. Air-and sea-landed operations and air-support for ground operations should also be planned for. The SANDF does not have this ability at the moment but it should modify its structure and equipment to perform this important role in the region.