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The impact of oil rents on military spending: Does corruption matter?

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  • Farzanegan, Mohammad Reza

Abstract

This study shows that the level of corruption matters in how oil rents affect the military spending within countries. Using panel data covering the 1984–2014 period for the Middle East and North Africa countries, we find that the effect of oil rents on military budget depends on the extent of political corruption. Oil wealth boosts military spending when corruption (measured by the re-scaled ICRG index) exceeds a critical score of 5 (out of 6) in the MENA region.

Suggested Citation

  • Farzanegan, Mohammad Reza, 2017. "The impact of oil rents on military spending: Does corruption matter?," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168157, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168157
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    Cited by:

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    2. Sajjad. F. Dizaji & Mohammad Reza Farzanegan, 2018. "Do sanctions reduce the military spending in Iran?," MAGKS Papers on Economics 201831, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. repec:diw:diwwpp:dp1959 is not listed on IDEAS

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    More about this item

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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