Political Military Competition and Size and Composition of Government

This paper uses a formal model to analyze the effects of political military competition among states on the size and composition of state. Great economies of scale in warfare, even distribution of military capability among contestants and greater value of contested resources generate higher level of military capacity and growth of government. If there is decreasing return to scale in state revenue generating function and provision of public intermediate inputs, then there will be an increasing size of civilian public sector relative to that of military. The paper finally studies how waves of military revolutions affected international political military competition and the size and composition of government in history.     

The interrelationship between defence spending,public expenditures and economic growth: evidence from China

This study examines the relationship between defence spending, other components of public spending and economic growth for the 1952–2012 period in China using Granger causality tests and generalised impulse response functions based on vector error correction models. The empirical results reveal two long-run equilibrium relationships among the variables and also show that defence spending inversely and unidirectionally Granger impacts economic growth. Furthermore, empirical findings point to a trade-off relationship between defence spending and public expenditures in China. From a policy maker’s perspective, the findings reported herein imply that a decrease in defence spending may stimulate economic growth.     

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.     

The African Standby Force: The African Union’s tool for the maintenance of peace and security

Declared operationally ready in 2016, the African Standby Force (ASF) has not been deployed in its originally designed form. This is not for the lack of opportunities but rather a demonstration of the power of the Regional Economic Communities/Regional Mechanisms (RECs/RMs) – Africa’s sub-regional security structures – over matters of peace and security. Experience gathered from its short existence suggests that the ASF may never be deployed in its current form. It may instead evolve into a robust framework, adaptable mainly by the RECs/RMs, for addressing varied security challenges. Four things are critical to enhancing the utility of the ASF: the political willingness of the RECs/RMs, the strategic interest of the member states, predictable and sustainable financing, and clarity on the role of the African Capability for Immediate Response to Crisis, the temporary battlegroup that was created to provide the African Union with a rapid response capability, pending the ASF’s operationalization.     

Economic Espionage

We explore the efficacy of counterespionage measures in the realm of Economic Espionage. Although it is possible that increasing counterespionage measures has the desired effect of increasing domestic research and development (R&D) and reducing espionage by foreign entities, it is also possible that these increased measures actually do just the opposite: domestic R&D suffers and foreign stealing increases. We identify the appropriate settings for increased counterespionage measures and provide some policy advice.     

A cost–benefit analysis of terrorist attacks

A cost–benefit analysis of terrorist attacks is developed and placed within a systematic theoretical structure. For the target or object of the attack, we consider the lost value of human lives, lost economic value, and lost influence value, counted as benefits for the terrorist. The corresponding losses for the terrorist are counted as costs. The terrorist attacks if benefits outweigh costs. Bounded rationality is enabled where the three kinds of benefits and costs can be weighted differently. We account for two ex ante probabilities of successful planning and attack, and enable the terrorist to assign different weights to its multiple stakeholders. We introduce multiple time periods, time discounting, attitudes towards risk, and subcategories for the benefits and costs. The cost–benefit analysis is illustrated with the 11 September 2001 attack, and 53 incidents in the Global Terrorism Database yielding both positive and negative expected utilities. The paper is intended as a tool for scientists and policy-makers, as a way of thinking about costs and benefits of terrorist attacks.     

Economic impact of the ministry of defence’s budget: methodological design and results for the Spanish economy

This article analyses the economic impact of the expenditure budget of the Spanish Ministry of Defence (MoD) and its Autonomous Agencies (AA), distinguishing direct, indirect and induced effects. The input–output methodology is used to find intersectoral effects on the rest of the economy. The article quantifies the economic impact in terms of production, gross value added (GVA), employed population, tax revenue, and also in terms of its contribution to the gross domestic product (GDP) of Spain in 2010. The results show that the activity of the MoD and AA generates 1.2% of the country’s GDP and 1.7% of total employment in that year.     

Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict

This investigation re-examines the potential sources of positive externalities for the relationship between military spending and economic growth using recent advances in panel estimation methods and a large data-set on military expenditure. The investigation provides a new analysis on the relationship between conflict, corruption, natural resources and military expenditure and their direct and indirect effects on economic growth. The analysis finds that the impact of military expenditure on growth is generally negative as in the literature, but that it is not significantly detrimental for countries facing higher internal threats and for countries with large natural resource wealth once corruption levels are accounted for.