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Military Expenditures And Inequality: Empirical Evidence From Global Data

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Abstract

A substantial body of literature has uncovered a robust relationship between institutions including unionization and political democracy and economic inequality. This paper examines the effect of military spending on inequality, controlling for the size of the armed forces, GDP growth, per capita income, and other possible determinants. Using a panel regression with country level observations from 1987-1997, we obtained consistent estimates that there is a positive effect of military expenditure on pay inequality. This relationship is robust across variable definitions and model specifications. Given the close relationship between pay and income, this result suggests that a country's increases in military spending could increase income inequality.

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  • Hamid Ali, 2007. "Military Expenditures And Inequality: Empirical Evidence From Global Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(6), pages 519-535.
    • Handle: RePEc:taf:defpea:v:18:y:2007:i:6:p:519-535
    DOI: 10.1080/10242690701331501
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    1. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
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    3. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
    4. Mr. Daniel P. Hewitt, 1991. "Military Expenditure: Econometric Testing of Economic and Political Influences," IMF Working Papers 1991/053, International Monetary Fund.
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    Military spending; Inequality;

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