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U.S. Troops and Foreign Economic Growth

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  • G. Jones
  • T. Kane

Abstract

Do American troops help or hinder economic growth in other countries? We consider a newly constructed dataset of the deployment of U.S. troops over the years 1950--2000 and discover a positive relationship between deployed troops and host country economic growth, which is robust to multiple control variables. Each tenfold increase in U.S. troops is associated with a one--third percentage point increase in average host country annual growth. We explore three possible causal explanations: a Keynesian aggregate demand boost; the diffusion of institutions; and security. Extensive econometric testing, including the use of panel data, confirms the core relationship.

Suggested Citation

  • G. Jones & T. Kane, 2012. "U.S. Troops and Foreign Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(3), pages 225-249, June.
    • Handle: RePEc:taf:defpea:v:23:y:2012:i:3:p:225-249
    DOI: 10.1080/10242694.2011.585043
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    4. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
    5. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
    6. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, January.
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    Cited by:

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    2. Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2014. "US Security Strategy and the Gains from Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 863-885, November.

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