Military Expenditure and Development in Latin America

Thomas Scheetz

Chapter 3 in Arming the South, 2002, pp 51-71 from Palgrave Macmillan

Abstract: Abstract Often, there is an unwritten presupposition present in econometric studies dealing with the relation between a country’s military expenditure and its economic growth. When military expenditure is found to have a negative effect on the economy, as I find in my experience in Latin America, it is taken as confirmation that the military per se are always deleterious to growth. Mutatis mutandis, the same could be said for researchers who have found a positive relation between military expenditure and the economy. In this chapter, I offer a nuanced interpretation of research findings, one that relates to the correctness of a government’s policy. I suggest that if models are appropriately specified, military expenditure’s positive (or negative) correlation with growth depends on policy-makers’ “getting defense right” (or wrong) in terms of the military’s mission and the resultant force deployment. These are what really cause a positive or negative effect of military spending on the economy.

Keywords: Latin American Country; Military Expenditure; Current Account Balance; Democratic Transition; Military Spending (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50125-6_4

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DOI: 10.1057/9780230501256_4

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