Please use this identifier to cite or link to this item:
Aziz, M. Nusrate
Asadullah, Mohammad Niaz
Year of Publication: 
Series/Report no.: 
CREDIT Research Paper 16/03
This paper re-examines the causal impact of military expenditure on growth in the presence of internal and external threats for the period 1990-2013 using data from 70 developing countries. We find that differences in methods, model specifications, and the underlying estimation sample partly explain why past studies have differed in terms of the true effect of military spending. Estimates based on both cross-sectional and panel methods indicate that military expenditure negatively affects economic growth during the post-Cold War era. However, the effect is insignificant in the cross-sectional OLS method and fixed effects model for the full sample and the low-income country sub-sample, respectively. Moreover, the effect of military spending on growth conditional upon conflict exposure is positive and significant across all specifications, albeit the result is specific to internal instead of external conflict.
internal and external armed conflict
military expenditure
economic growth
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
701.67 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.