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Demilitarization and economic growth: Empirical evidence in support of a peace dividend

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  • Mayberry, Anthony A.

Abstract

This paper analyzes the implications of demilitarization on economic growth. I create a new data set of military transitions since 1960 and measure the effect of demilitarization in countries that reduced their military capabilities and subsided aggressive or violent behavior. Semiparametric difference-in-difference estimates predict that on average, demilitarization is associated with a 1% higher annual GDP per capita than if the country had remained militarized. Dynamic analysis shows that on average, GDP per capita is 15%–20% higher 20 years after transition. These findings provide empirical evidence in support of a Peace Dividend.

Suggested Citation

  • Mayberry, Anthony A., 2023. "Demilitarization and economic growth: Empirical evidence in support of a peace dividend," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 960-988.
    • Handle: RePEc:eee:jcecon:v:51:y:2023:i:3:p:960-988
    DOI: 10.1016/j.jce.2023.04.001
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    More about this item

    Keywords

    Demilitarization; Economic growth; Difference-in-differences; Peace dividend;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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