Military Expenditure : Threats, Aid, and Arms Races
Using global data for the period 1960-99, the authors estimate neighborhood arms races. They find that the level of military expenditure is strongly influenced by the expenditure of neighbors. The authors estimate an "arms race multiplier," finding that an initial exogenous increase in military expenditure by one country is more than doubled in both the originating country and its neighbor. An implication is that military expenditure is, to an extent, a "regional public bad." Potentially, there is an offsetting public good effect if rebellions are deterred by military expenditure. However, instrumenting for military expenditure, the authors find no deterrence effect of military spending on the risk of internal conflict. So there appears to be no regional public good effect offsetting the public bad arising from a neighborhood arms race.
Summary: | Using global data for the period
1960-99, the authors estimate neighborhood arms races. They
find that the level of military expenditure is strongly
influenced by the expenditure of neighbors. The authors
estimate an "arms race multiplier," finding that
an initial exogenous increase in military expenditure by one
country is more than doubled in both the originating country
and its neighbor. An implication is that military
expenditure is, to an extent, a "regional public
bad." Potentially, there is an offsetting public good
effect if rebellions are deterred by military expenditure.
However, instrumenting for military expenditure, the authors
find no deterrence effect of military spending on the risk
of internal conflict. So there appears to be no regional
public good effect offsetting the public bad arising from a
neighborhood arms race. |
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