The Financial Costs of the Portuguese Colonial War, 1961-1974: Analysis and Applied Study

Abstract

This article presents estimates of the financial costs incurred by Portugal with the Colonial War (1961-1974). The results obtained show that, on average, the extraordinary expenses most directly related with the war represented 22% of Portuguese state expenditure, equivalent to 3.1% of GDP. They also show that the total costs incurred by Portugal with the Colonial War amounted to between 21.8 billion euros and 29.8 billion euros, at today's prices and in the present-day currency. By estimating a dynamic model, it was also possible to identify a positive relationship between the extraordinary military expenditure on the defence and security of the overseas provinces—which included the budgetary costs of war—and Portuguese economic growth. The conclusions reached represent a valuable contribution to contemporary economic history.

Testing the Sustainability of Fiscal Policy during the Portuguese First Republic Using Stationary and Cointegration Tests

“…After a short and transitory period of a military dictatorship (1926)(1927)(1928)(1929)(1930)(1931)(1932)(1933), Estado Novo began with the Constitution of 11 April 1933 and ended on 25 April 1974, when it was overthrown by the Armed Forces Movement, an event that opened the doors to democracy. See, for example, Rosas (1994Rosas ( , 2001, Léonard (1998), Torgal (2009) and Ferraz (2017Ferraz ( , 2022a.…”