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Economic Growth and Defense Spending in Developing Countries

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  • Newman Kwadwo Kusi

    (University of Natal, South Africa)

Abstract

This article investigates the causal relationship between economic growth and defense spending in 77 developing countries. The study employs Granger-causality tests using annual time series data for each of the 77 countries to analyse the presence and direction of causality between the two variables. The results indicate that the relationship between economic growth and defense spending cannot be generalized across countries. It may depend, among other things on the sample period of study and the level of socioeconomic development of the country concerned.

Suggested Citation

  • Newman Kwadwo Kusi, 1994. "Economic Growth and Defense Spending in Developing Countries," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(1), pages 152-159, March.
    • Handle: RePEc:sae:jocore:v:38:y:1994:i:1:p:152-159
    DOI: 10.1177/0022002794038001009
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    References listed on IDEAS

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    1. Biswas, Basudeb & Ram, Rati, 1986. "Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 34(2), pages 361-372, January.
    2. Joerding, Wayne, 1986. "Economic growth and defense spending : Granger Causality," Journal of Development Economics, Elsevier, vol. 21(1), pages 35-40, April.
    3. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
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    Cited by:

    1. Christos Kollias & Suzanna‐Maria Paleologou, 2010. "Growth, investment and military expenditure in the European Union‐15," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(2), pages 228-240, May.
    2. Christos Kollias, 1997. "Defence spending and growth in turkey 1954-1993: A causal analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 8(2), pages 189-204.
    3. Walker, Douglas M. & Jackson, John D., 1998. "New Goods and Economic Growth: Evidence from Legalized Gambling," The Review of Regional Studies, Southern Regional Science Association, vol. 28(2), pages 47-70, Fall.
    4. Julien Malizard, 2010. "Causality Between Economic Growth and Military Expenditure: The Case of France," Defense & Security Analysis, Taylor & Francis Journals, vol. 26(4), pages 401-413, December.
    5. Albert Wijeweera & Matthew J. Webb, 2012. "Using the Feder-Ram and Military Keynesian Models to Examine the Link Between Defence Spending and Economic Growth in Sri Lanka," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(3), pages 303-311, May.
    6. W. Robert J. Alexander, 2015. "The Keynesian IS-MR Model and Military Spending," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(2), pages 213-221, April.
    7. Ming Zhong & Tsangyao Chang & Samrat Goswami & Rangan Gupta & Tien-Wei Lou, 2017. "The nexus between military expenditures and economic growth in the BRICS and the US: an empirical note," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(5), pages 609-620, September.
    8. Ourania Dimitraki & Faek Menla Ali, 2015. "The Long-run Causal Relationship Between Military Expenditure and Economic Growth in China: Revisited," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(3), pages 311-326, June.
    9. Christos Kollias & Stelios Makrydakis, 2000. "A note on the causal relationship between defence spending and growth in Greece: 1955-93," Defence and Peace Economics, Taylor & Francis Journals, vol. 11(1), pages 173-184.
    10. Khalid Zaman, 2019. "Does higher military spending affect business regulatory and growth specific measures? Evidence from the group of seven (G-7) countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 323-348, April.
    11. Jeffrey Smith & M. H. Tuttle, 2008. "Does Defense Spending Really Promote Aggregate Output In The United States?," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(6), pages 435-447.
    12. Thomas Bernauer & Vally Koubi & Fabio Ernst, 2009. "National and Regional Economic Consequences of Swiss Defense Spending," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(4), pages 467-484, July.
    13. Paresh Kumar Narayan & Baljeet Singh, 2007. "Modelling The Relationship Between Defense Spending And Economic Growth For The Fiji Islands," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(4), pages 391-401.
    14. Christos Kollias & Nikolaos Mylonidis & Suzanna-Maria Paleologou, 2007. "A Panel Data Analysis Of The Nexus Between Defence Spending And Growth In The European Union: A Reply," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(6), pages 581-583.

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