Modernization and the Military in Latin America

In the 1950s modernization began to be an important paradigm for Latin American development. Early modernization theory depicted the economies of Latin America as traditional and underdeveloped. The theme of technological progress runs consistently through the modernization model. The purpose of this article is to assess an important question raised by Latin American development studies: that large allocations for the military sector are conducive to economic growth in Latin America. While this modernization literature is somewhat dated, many recent quantitative studies have also shown positive economic benefits from defence spending in the Third World. The added relevance here is that our model captures technological progress. After controlling for technological progress and externalities, our analysis shows that the military portion of budgets in Latin America have actually hindered modernization. We discuss these findings in terms of regime type and levels of US military aid to the region.