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How Resilient Are Military Expenditures in the Context of Fund-Supported Programs?

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  • International Monetary Fund

Abstract

This paper examines how military spending has been affected by Fund-supported programs. It looks at the changes in military expenditure as a share of gross domestic product (MIL/GDP) and of total expenditure (MIL/EX) for two subsamples of Fund-supported programs, broadly divided into fiscal tightening and fiscal accommodating. Under fiscal tightening, the evidence suggests that MIL/GDP decreases during Fund-supported programs, but that MIL/EX increases, revealing resilience to budgetary adjustments. Under fiscal accommodation, as total government expenditure tends to increase, so does military expenditure; however, the ratio MIL/EX declines, as fewer additional resources are allocated to the military.

Suggested Citation

  • International Monetary Fund, 1988. "How Resilient Are Military Expenditures in the Context of Fund-Supported Programs?," IMF Working Papers 1988/048, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1988/048
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