Economic Growth and Defense Spending in Developing Countries

Abstract

This article investigates the causal relationship between economic growth and defense spending in 77 developing countries. The study employs Granger-causality tests using annual time series data for each of the 77 countries to analyse the presence and direction of causality between the two variables. The results indicate that the relationship between economic growth and defense spending cannot be generalized across countries. It may depend, among other things on the sample period of study and the level of socioeconomic development of the country concerned.

The nexus between military expenditures and economic growth in the BRICS and the US: an empirical note

“…This result is in line with the findings of others (Chowdhury, 1991;Landu, 1993;Kusi, 1994;Al-Yousif, 2002;Chang et al, 2014;Pan et al, 2014), who have concluded that military expenditure depends on a number of factors including: the nature of the expenditure; the prevailing circumstances; and the concurrent government policies.…”

The Long-run Causal Relationship Between Military Expenditure and Economic Growth in China: Revisited

“…26, No. 3, 311-326, http://dx.doi.org/10.1080/10242694.2013.810024 Ó 2013Taylor & Francis 2007, the use of different sample periods (Chowdhury, 1991;Kusi, 1994) or the employment of different assumptions based on different theoretical models (Dunne, Smith, and Willenbockel, 2005); an aspect which is also related to the potential omission of relevant variables (Lai, Huang, and Yang, 2005;Bo and Xing, 2011).…”

The Relationship Between Military Expenditure and Economic Growth in Some Middle Eastern Countries: What Is the Story?

“…Proponents of this school point that higher defense spending causes economic growth, and economic growth leads to higher ME (Cappelen, Gleditsch, & Bjerkholt, 1985) and (Kusi, 1994). This result is also confirmed by Chowdhury (1991) and Looney (1992).…”