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Military Expenditure in Post-Conflict Societies

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  • Paul Collier
  • Anke Hoeffler

Abstract

Post-conflict situations face a high risk of reversion to conflict. We investigate the effect of military expenditure by the government during the first decade post-conflict on the risk of reversion. We contrast two theories as to the likely effects. In one, military spending deters conflict by reducing the prospects of rebel success. In the other it acts as a signal to the rebels of government intentions. In the signalling model, low military spending signals that the government intends to adhere to the terms of the peace settlement and so reduces the risk of renewed rebellion. We investigate the effects of post-conflict military spending on the risk of conflict, using our existing models of military expenditure and of conflict risk. We find that, consistent with the signalling model, high military spending post-conflict significantly increases the risk of renewed conflict. This effect of military spending is distinctive to post-conflict period, and becomes progressively more pronounced over the decade.

Suggested Citation

  • Paul Collier & Anke Hoeffler, 2004. "Military Expenditure in Post-Conflict Societies," CSAE Working Paper Series 2004-13, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2004-13
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    2. Siyan Chen & Norman V. Loayza & Marta Reynal-Querol, 2008. "The Aftermath of Civil War," The World Bank Economic Review, World Bank, vol. 22(1), pages 63-85, February.
    3. Marie-Ange Véganzonès-Varoudakis & Syed Muhammad All-E-Raza Rizvi, 2019. "Conflict, Growth and Human Development An Empirical Analysis of Pakistan," Post-Print hal-03060036, HAL.
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    5. Stadelmann, David & Portmann, Marco & Eichenberger, Reiner, 2015. "Military careers of politicians matter for national security policy," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 142-156.
    6. Indra de Soysa & Eric Neumayer, 2005. "Disarming Fears of Diversity: Ethnic Heterogeneity and State Militarization, 1988–2002," Public Economics 0503008, University Library of Munich, Germany, revised 01 Sep 2005.
    7. Giorgio d’Agostino & John Paul Dunne & Luca Pieroni, 2019. "Military Expenditure, Endogeneity and Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(5), pages 509-524, July.
    8. Paul Collier & Anke Hoeffler & Anke Hoeffler & Måns Söderbom, 2006. "Post-Conflict Risks," Economics Series Working Papers WPS/2006-12, University of Oxford, Department of Economics.
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    10. Giorgio d'Agostino & J Paul Dunne & Luca Pieroni, 2016. "How much does military spending affect growth? Causal estimates from the World's non-rich countries," SALDRU Working Papers 196, Southern Africa Labour and Development Research Unit, University of Cape Town.
    11. Anna Balestra & Raul Caruso, 2024. "Education and Military Expenditures: Countervailing Forces in Designing Economic Policy. A Contribution to the Empirics of Peace," DISCE - Quaderni del Dipartimento di Politica Economica dipe0035, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    12. Baddeley, M.C., 2008. "Poverty, Armed Conflict and Financial Instability," Cambridge Working Papers in Economics 0857, Faculty of Economics, University of Cambridge.
    13. Hanne Fjelde & Indra De Soysa, 2009. "Coercion, Co-optation, or Cooperation?," Conflict Management and Peace Science, Peace Science Society (International), vol. 26(1), pages 5-25, February.
    14. Byrd, William & Guimbert, Stephane, 2009. "Public Finance, Security, and Development: A Framework and an Application to Afghanistan," Policy Research Working Paper Series 4806, The World Bank.
    15. Albalate, Daniel & Bel, Germà & Elias, Ferran, 2012. "Institutional determinants of military spending," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 279-290.
    16. Halvard Buhaug, 2010. "Dude, Where’s My Conflict?," Conflict Management and Peace Science, Peace Science Society (International), vol. 27(2), pages 107-128, April.
    17. Tilman Brück & Olaf J de Groot & Friedrich Schneider, 2011. "The economic costs of the German participation in the Afghanistan war," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(6), pages 793-805, November.
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    19. Bove, Vincenzo & Nisticò, Roberto, 2014. "Military in politics and budgetary allocations," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1065-1078.
    20. Abdelbaki, Professor Hisham, 2013. "The Arab spring: do we need a new theory?," MPRA Paper 54801, University Library of Munich, Germany, revised 2013.
    21. Mahmoud Al Iriani & Yahsob Al Eriani, 2015. "Fiscal Institutions and Macroeconomic Managment in Resource Rich Economies: the Case of Yemen," Working Papers 935, Economic Research Forum, revised Aug 2015.
    22. Chernor Momodu Bah & Mohamed Ouedraogo, 2022. "The Effect of Natural Resources on Economic Growth in West Africa: The Mediating Role of Human Capital Disaggregation," Journal of Contemporary Research in Business, Economics and Finance, Learning Gate, vol. 4(2), pages 27-42.
    23. Fabrizio Carmignani & Adrian Gauci, 2009. "Does fiscal policy differ between successful and unsuccessful post-conflict transitions? Lessons from African Civil Wars," Discussion Papers Series 402, School of Economics, University of Queensland, Australia.
    24. Olaf J. de Groot, 2012. "Analyzing the costs of military engagement," Economics of Peace and Security Journal, EPS Publishing, vol. 7(2), pages 41-49, July.
    25. Sacit Hadi Akdede & Jinyoung Hwang & Emre Can, 2008. "Cultural Diversity, Domestic Political Violence And Public Expenditures," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(3), pages 235-247.

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    More about this item

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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