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Military Expenditures and Natural Resources: Evidence from Rentier States in the Middle East and North Africa

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  • Hamid E. Ali
  • Omnia A. Abdellatif

Abstract

It has been argued that the discovery of a new natural resource greatly increases the risk of conflict. This research aims to study the effect of natural resources on military spending, using the data from rentier states in the Middle East and North Africa (MENA) countries from 1987 to 2012. In considering the 'resource curse,' the types of natural resources matter. Our empirical results demonstrate that the 'resource curse' arising from the abundance of certain natural resources, particularly oil and forest resources, leads to increases in military spending. In contrast, the rent from coal and natural gas has a negative impact on military spending, while the rent from minerals has no impact on military spending, controlling for GDP growth and per capita income.

Suggested Citation

  • Hamid E. Ali & Omnia A. Abdellatif, 2015. "Military Expenditures and Natural Resources: Evidence from Rentier States in the Middle East and North Africa," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(1), pages 5-13, February.
    • Handle: RePEc:taf:defpea:v:26:y:2015:i:1:p:5-13
    DOI: 10.1080/10242694.2013.848574
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    References listed on IDEAS

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    1. Ricky Lam & Leonard Wantchekon, 1999. "Dictatorships as a Political Dutch Disease," Working Papers 795, Economic Growth Center, Yale University.
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    Cited by:

    1. Keisuke Okada & Sovannroeun Samreth, 2021. "Oil bonanza and the composition of government expenditure," Economics of Governance, Springer, vol. 22(1), pages 23-46, March.
    2. Douch Mohamed & Solomon Binyam, 2018. "Status or Security: The Case of the Middle East and North Africa Region," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 24(3), pages 1-12, September.
    3. Giacomo Battiston & Matteo Bizzarri & Riccardo Franceschin, 2021. "Third-Party Interest, Resource Value, and the Likelihood of Conflict," CSEF Working Papers 631, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 20 Jun 2022.
    4. Kyriakos Emmanouilidis & Christos Karpetis, 2022. "Cross–Country Dependence, Heterogeneity and the Growth Effects of Military Spending," Defence and Peace Economics, Taylor & Francis Journals, vol. 33(7), pages 842-856, October.
    5. Adam Coutts & Adel Daoud & Ali Fakih & Walid Marrouch & Bernhard Reinsberg, 2019. "Guns and butter? Military expenditure and health spending on the eve of the Arab Spring," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(2), pages 227-237, February.
    6. Jia, Zeng & Alharthi, Majed & Haijun, Tian & Mehmood, Sumera & Hanif, Imran, 2024. "Relationship between natural resources, economic growth, and carbon emissions: The role of fintech, information technology and corruption to achieve the targets of COP-27," Resources Policy, Elsevier, vol. 90(C).
    7. Dawud Ansari & Mariza Montes de Oca Leon & Helen Schlüter, 2021. "What Drives Saudi Airstrikes in Yemen? An Empirical Analysis of the Dynamics of Coalition Airstrikes, Houthi Attacks, and the Oil Market," Discussion Papers of DIW Berlin 1959, DIW Berlin, German Institute for Economic Research.
    8. Wang, Kai-Hua & Su, Chi-Wei & Lobonţ, Oana-Ramona & Umar, Muhammad, 2021. "Whether crude oil dependence and CO2 emissions influence military expenditure in net oil importing countries?," Energy Policy, Elsevier, vol. 153(C).
    9. Wukki Kim & Todd Sandler, 2020. "Middle East and North Africa: Terrorism and Conflicts," Global Policy, London School of Economics and Political Science, vol. 11(4), pages 424-438, September.
    10. Dizaji, S.F., 2019. "The potential impact of oil sanctions on military spending and democracy in the Middle East," ISS Working Papers - General Series 644, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    11. Vusal Musayev, 2016. "Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 378-391, June.
    12. Douch, Mohamed & Solomon, Binyam, 2017. "Demand for Military Spending: The case of the MENA Region," MPRA Paper 88689, University Library of Munich, Germany.
    13. de Soysa, Indra & Gizelis, Ismene Theodora, 2016. "More heat, less light! The resource curse & HIV/AIDS: A reply to Olivier Sterck," Social Science & Medicine, Elsevier, vol. 150(C), pages 268-270.
    14. Bakirtas, Tahsin & Akpolat, Ahmet Gökçe, 2020. "The relationship between crude oil exports, crude oil prices and military expenditures in some OPEC countries," Resources Policy, Elsevier, vol. 67(C).
    15. Do, Trung K., 2021. "Resource curse or rentier peace? The impact of natural resource rents on military expenditure," Resources Policy, Elsevier, vol. 71(C).

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