The demand for military spending in the peripheral economies of Europe

Research on the factors that determine the level of military expenditure or military burden in countries, suggest that the dynamics of the determinants of military spending will be best understood by case studies of individual countries and studies of groups of relatively homogeneous countries. This paper provides a comparative analysis of three of the EU's peripheral economies - Greece, Portugal and Spain. A simple model based on a general theory of the demand for military spending provides the basis for an investigation of the relative importance of strategic and other social and economic factors for the three countries.     

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.     

DETERMINING THE DEFENCE INDUSTRIAL BASE

This paper models the determination of the defence industrial base – the number of different military systems a country decides to maintain. High R&D costs means that few countries can afford to produce major weapons systems and the producers also import systems. Non‐producers rely on imports and we assume their demand is driven by regional arms races. Military capability is determined by the number of systems and the quantity and quality of each. We examine how the defence industrial base is influenced by military expenditures, R&D costs, export controls, the nature of regional arms races and a variety of other factors.     

REGIONAL EFFECTS OF MILITARY BASE CLOSURES: THE CASE OF SWEDEN

The purpose of this paper is to investigate regional effects of military base closures in Sweden during the last decades. Our analysis is based on a regional growth model, where two equations are estimated; one equation describing the average income growth rate and one equation describing the net migration rate. The data set is a panel of 31 Swedish municipalities covering the period 1983–1998. Our main finding is that a closure of a military base has not had any significant impact on the subsequent average income growth rate nor the net migration rate in the affected municipalities. One potential explanation for these results relates to the labour market and the composition of the labour force.     

MILITARY EXPENDITURE AND UNEMPLOYMENT RATES: GRANGER CAUSALITY TESTS USING GLOBAL PANEL DATA

This paper investigates the empirical relationships between military expenditure and unemployment rates. A set of global panel data on 46 countries is utilized, and a panel data version of the Granger causality test is applied. The results indicate that there is little evidence of the causality running from unemployment to military expenditure regardless of how we measure military spending and determine group countries. In contrast, the causality running from military expenditure to unemployment receives empirical support if military expenditure is measured in terms of its share of GDP and if data are taken from middle‐ and low‐income countries or non‐OECD countries.     

Themes in defence manpower economics and challenges for the future

Raising and maintaining military forces have posed enormous challenges for the United States and its allies. Economists have made significant contributions to understanding of how to recruit and manage such forces. This paper highlights key past contributions and discusses challenges for future research. Rapid changes in the roles and missions of military personnel, technology, and the civilian labor market pose serious challenges for future military manpower policy and will challenge economists to develop new approaches to military recruiting and personnel management. Yet the body of past research can continue to provide insight and guidance in making decisions about defense manpower.     

Determinants of southeast asian military spending in the post-cold war era: a dynamic panel analysis

This study examines the demand of military expenditure among Southeast Asian countries since the end of the Cold War. By using a dynamic panel approach, I find that military spending in the region has been jointly determined by economic, strategic and socio-political factors. In particular, surging foreign debt burdens and the rise of China – two regional issues that gained prominence in the post-Cold War period – show their significance as determinants along with other generalist variables. The results therefore ask for the development of even-handed and region-sensitive approaches to studying military build-up in the region of Southeast Asia.