The Impact of Military Expenditure on External Debt: The Case of 35 Arms Importing Countries

Khan, Lubna; Arif, Imtiaz; Waqar, Sundus

doi:10.1080/10242694.2020.1723239

Cited by 16 publications

(14 citation statements)

References 33 publications

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“…The results of this research in some sense converge with findings by Looney and The results of this research in some sense converge with findings by Looney and Frederiksen [45], and Khan et al [50], stating that the relationship between defence expenditure and government debt may be positive in some cases and negative in others. Looney and Frederiksen [45] detected a negative relationship in relatively resource-constrained countries and a positive one in relatively resource-unconstrained countries.…”

Section: Discussionsupporting

confidence: 88%

“…Statistically insignificant relationships were found in Luxembourg, Denmark and Lithuania. Moreover, the investigation into the government debt-defence expenditure nexus in Estonia has supported the results of previous studies by Ahmed [47], and Khan et al [50]. The results of the research to an extent reflect the finding by Shahbaz et al [18] who indicated the existence of an interrelationship between defence expenditure and government debt.…”

Section: Discussionsupporting

confidence: 86%

“…Looney and Frederiksen [45] detected a negative relationship in relatively resource-constrained countries and a positive one in relatively resource-unconstrained countries. Khan et al [50] suggested that defence expenditure generally increases the external debt in those countries, which have been studied. However, in the case of Europe and Central Asia, the relationships turned out to be the opposite.…”

Section: Discussionmentioning

confidence: 99%

“…The results indicated that the external debt of those selected South Asian countries is positively determined by their military spending, and negatively explained by their domestic investment activities. Khan et al [50] tested the effects of military spending on the external debt of thirty-five arms-importing countries between 1995 and 2016. The empirical results suggested that military spending generally increases external debt in the studied countries.…”

Section: Literature Reviewmentioning

confidence: 99%

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Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries

Česnuitytè¹

2021

Sustainability

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This paper explores the relationship between defence expenditure and government debt in small European Union countries that are members of NATO, such as Luxembourg, Lithuania, Latvia, Estonia, DRenmark, Slovakia, and Slovenia. The investigation used Eurostat data in relation to gross government debt, as well as NATO information regarding defence expenditure as a share of GDP and its distribution by main category for the period between 2005 and 2019. The authors applied descriptive statistics and methods of multivariate statistics: Spearman’s correlation, the ANOVA test, and Life tables. Taking into consideration the tendencies of variables in all examined countries, the results show that the share of defence expenditure in GDP correlates statistically significantly and negatively with government gross debt. Latvia, Slovakia, and Slovenia revealed statistically significant relationships between variables, while Luxembourg, Denmark and Lithuania insignificant. In Estonia, the relationship between variables is strong and positive. Additionally, the investigation shows that, whether for increasing defence expenditure or for stable or decreasing defence expenditure, the trajectories of government debt have no clear interrelation in explored countries. Therefore, the cause of government debt by means of defence expenditure alone can only be partially explained. The insights that were drawn from this study could be applied to government finance management processes, as well as to ensure both national security and the achievement of the Sustainable Development Goals 2030.

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Section: Discussionsupporting

confidence: 88%

Section: Discussionsupporting

confidence: 86%

Section: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries

Česnuitytè¹

2021

Sustainability

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“…Likewise, Azam and Feng (2017), using a sample of ten Asian countries for the period 1990 to 2011, examined the impact of military spending on foreign debt and found that this impact is positive. Focusing on the issue of the debt-management system of 35 arms importing countries, Khan et al (2021) test the effects of military expenditure on external debt by using annual panel data for the period 1995 to 2016. Their results suggest that defence expenditures increase the external debt burden in the countries included in the study.…”

Section: Literature Reviewmentioning

confidence: 99%

Defence expenditure and public debt in Greece: A non-linear relationship

Bardakas¹,

Doulos²,

Zombanakis³

2022

Security and Defence Quarterly

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The aim of this paper is to consider and evaluate the widely–used argument attributing the growth of the public debt of Greece in recent decades to the country’s defence expenditure. We employ a two-equation model that focuses on the determinants of the military debt and how this has affected the public debt. The source of our military debt data is the Hellenic General Accounting Office, an option taken to cope with confidentiality issues. Finally, we insist on focusing on the expenditure on defence equipment imports rather than the total defence spending that the literature mostly covers, for reasons extensively analysed. Our methodology firstly assumes a linear relationship between military debt and public debt. We solve the system using 3SLS to obtain consistent and efficient estimates to derive interesting policy implications. The employment of a non-linear quadratic form not previously adopted proves to be superior in terms of performance and reveals the complexity of the above relationship. These point to the conclusion that the defence equipment purchases made since the beginning of the eighties have not had a decisive impact on the public debt of Greece. The defence equipment purchases made since the beginning of the eighties represent a very low percentage of the total public debt of Greece. Moreover, these are considered to be an investment activity rather than consumer spending, which has been acknowledged in the literature as the primary cause of Greece’s high indebtedness and the ensuing economic crisis.

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An Asymmetric Analysis of Public Debt and Defence Expenditure in Fiji

Makun

2024

J Knowl Econ

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The Impact of Military Expenditure on External Debt: The Case of 35 Arms Importing Countries

Cited by 16 publications

References 33 publications

Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries

Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries

Defence expenditure and public debt in Greece: A non-linear relationship

An Asymmetric Analysis of Public Debt and Defence Expenditure in Fiji

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