Economic theory and existing empirical studies do not unambiguously indicate whether higher military expenditures retard or promote economic growth, nor have there been systematic attempts to discern the sources of military spending to help determine how much of that spending can realistically be reduced. This article examines the theoretical link between military spending and economic growth, explores the domestic and regional causes of this spending, and tests a model incorporating a simultaneous relationship between military spending and economic growth in a pooled time-series cross-sectional analysis on various groupings of Middle Eastern states. While the analysis is shown sensitive to assumptions about causality and the numerous problems of pooled data, the results indicate that higher military spending has suppressed economic growth in the Middle East region even when alternative measures of the military burden are used.
Get full access to this article
View all access options for this article.
References
1.
Askari, H. and V. Corbo (1974) “Economic implications of military expenditures in the Middle East.”J. of Peace Research11, 4: 341-343.
2.
Ball, N. (1983) “Defense and development: a critique of the Benoit study.”Econ. Development and Cultural Change3, 3: 507-524.
3.
Ball, N. (1984a) Third-World Security Expenditure: A Statistical Compendium Stock-holm: Swedish National Defense Research Institute.
4.
Ball, N. (1984b) “Measuring Third World security expenditure: a research note.”World Development12, 2: 157-164.
5.
Benoit, E. (1973) Defense and Economic Growth in Developing Countries. Boston: D. C. Heath
6.
Benoit, E. (1978) “Growth and defense in developing countries.”Econ. Development and Cultural Change26, 2: 271-280.
7.
Boulding, K. (1962) Conflict and Defense: A General Theory. New York: Harper and Row.
8.
Bueno de Mesquita, B. (1983) The War Trap. New Haven, CT: Yale.
9.
Cappelen, A. , N. P. Gleditsch, and O. Bjerkholt (1984) “Military spending and economic growth in the OECD countries.”J. of Peace Research21, 4: 361-373.
10.
Deger, S. and S. Sen (1983) “Military expenditure, spin-off and economic development.”J. of Development Economics13, 1-2: 67-83.
11.
Deger, S. and R. Smith (1983) “Military expenditure and growth in less developed countries.”J. of Conflict Resolution27, 2: 335-353.
12.
Dixon, W. J. and B. E. Moon (1985) “Military effects on the provision of basic human needs.” Presented at the annual meeting of the International Studies Association, Washington, D.C., March 1985.
13.
Dominguez, J. E. (1971) “Mice that do not roar: some aspects of international politics in the world's peripheries.”Int. Organization25, 2: 175-208.
14.
Domke, W. K. , R. C. Eichenberg, and C. M. Kelleher (1983) “The illusion of choice: defense and welfare in advanced industrial democracies, 1948-1978.”Amer. Pol. Sci. Rev.77, 1: 19-35.
15.
Faini, R. , P. Arnez and L. Taylor (1984) “Defense spending, economic structure, and growth: evidence among countries and overtime”Econ. Development and Cultural Change32, 3: 487-498.
16.
Galtung, J. (1980) “International relations and international conflicts: a sociological approach,” in Peace and World Structure. Copenhagen: Christian Ejlers.
17.
Garnham, D. (1976) “Dyadic international war, 1816-1965: the role of power parity and geographical proximity”Western Pol. Q.29, 2: 231-242.
18.
Gleditsch, N. P. and J. D. Singer (1975) “Distance and international war, 1816-1915” in Proceedings of the International Peace Reaserch Association Fifth General Conference. Oslo: IPRA.
19.
Griffen, K. B. and J. L. Enos (1970) “Foreign assistance: objectives and consequences.”Econ. Development and Cultural Change18, 3: 313-327.
20.
Hagen, E. E. (1972) “An observation on the Benoit and Dorfman analyses.”Int. Development Rev.14, 1: 14-15.
21.
Hollist, L. (1977) “An analysis of arms processes in the United States and the Soviet Union.”Int. Studies Q.21, 3: 503-528.
22.
Hopple, G. W. , P.J. Rossa, and J. Wilkenfeld (1980) “Threat in foreign policy: the overt behavior of states in conflict,” in P. J. McGowan and C. W. Kegley (eds.) Threat, Weapons, and Foreign Policy. Beverly Hills, CA: Sage.
23.
Huntington, S. (1972) Political Order in Changing Societies. New Haven, CT: Yale.
24.
International Institute for Strategic Studies (n.d.) The Military Balance.
25.
International Monetary Fund (1984) Government Financial Statistics Yearbook.
26.
International Monetary Fund (n.d.) International Financial Statistics.
27.
Kennedy, G. (1974) The Military in the Third World. Duckworth.
28.
Kmenta, J. (1971) Elements of Econometrics. New York: Macmillan.
29.
Lebovic, J. (1985) “Capabilities in context: national attributes and foreign policy in the Middle East.”J. of Peace Research22, 1: 47-67.
30.
Levy, J. (1984) “The offensive/defensive balance of military technology: theoretical and historical analysis.”Int. Studies Q.28, 2: 219-238.
31.
Lewis, J. P. and V. Kallab (1983) U.S. Foreign Policy and the Third World, Agenda 1983. New York: Praeger.
32.
Lim, D. (1983) “Another look at growth and defense in less developed countries.”Econ. Development and Cultural Change31, 2: 377-384.
33.
Lindgren, G. (1984) “Review essay: armaments and economic performance in industrialized market economies.”J. of Peace Research21, 4: 375-387.
34.
McCormick, J. M. (1973) “Evaluating models of crisis behavior: some evidence from the Middle East.”Int. Studies Q.19, 1: 17-45.
35.
Morris, M. D. (1979) Measuring the Condition of the World's Poor. New York: Pergamon.
36.
Nawaz, S. (1984) “Economic impact of defense expenditures.”Finance and Development20 (March): 34-35.
37.
Neuman, S. (1978) “Security, military expenditure and socio-economic development: reflections on Iran.”Orbis22, 3: 569-594.
38.
Neuman, S. (1985) “Offsets in the International Arms Market,” pp. 35-40 in World Military Expenditures and Arms Transfers. U.S. Arms Control and Disarmament Agency.
39.
Nincic, M. and T. R. Cusack (1979) “The political economy of U.S. military spending.”J. of Peace Research16, 2: 101-115.
40.
Pierre, A. (1981-1982) “Arms sales: the new diplomacy.”Foreign Affairs60, 2: 266-286.
41.
Richardson, L. F. (1960) Arms and insecurity: A Mathematical Study of the Causes and Origins of War. Pittsburgh: Boxwood.
42.
Rummel, R. J. (1977) Field Theory Evolving. Beverly Hills, CA: Sage.
43.
Smith, D. and R. Smith (1979) “Reflections on Neuman.”Orbis23, 2: 471-477.
44.
Smith, R. P. (1980) “Military expenditures and investment in OECD countries, 1954-1973.”J. of Comparative Economics4, 1: 19-32.
45.
Starr, H. and B. Most (1976) “The study and substance of borders in international relations research.”Int. Studies Q.20, 4: 581-620.
46.
Stimson, J. A. (1985) “Regression in space and time: a statistical essay.”Amer. J. of Pol. Sci.29, 4: 914-947.
47.
Stockholm International Peace Research Institute (1983) The SIPRI Yearbook of World Armaments and Disarmament. London: Taylor and Francis.
48.
U.S. Arms Control and Disarmament Agency (1984) World Military Expenditures and Arms Transfers. Washington, D.C.
49.
Vayrynen, R. (1979) “Power centers.”J. of Peace Research16, 4: 349-369.
50.
Vayrynen, R. (1984) “Regional conflict formations: an intractable problem of international relations.”J. of Peace Research21, 4: 337-359.
51.
Ward, M. (1982) “Cooperation and conflict in foreign policy behavior.”Int. Studies Q.26, 1: 87-126.
52.
Weisskopf, T. E. (1972) “The impact of foreign capital inflow on domestic savings in underdeveloped countries.”J. of Int. Economics2 (February): 25-38.
53.
Whynes, D. K. (1979) The Economics of Third World Military Expenditure. London: Macmillan.
54.
Wilkenfeld, J. , V. L. Lussier and D. Tahtinen (1972) “Conflict interactions in the Middle East, 1949-1967.”J. of Conflict Resolution16, 2: 135-154.
55.
Wolpin, M. D. (1983) “Sociopolitical radicalism and military professionalism in the Third World.”Comparative Politics15, 2: 203-221.
56.
World Bank (1983) World Tables. Baltimore: John Hopkins Univ. Press.
57.
World Bank (1984) World Development Report. New York: Oxford Univ. Press.
58.
Zinnes, D. (1976) Contemporary Research in International Relations: A Perspective and Critical Approach. New York: Free Press.
