Defense Expenditures and Economic Growth in Israel: The Indirect Link

Jordin S. Cohen, Randolph Stevenson, Alex Mintz and Michael D. Ward
Additional contact information
Jordin S. Cohen: Institute of Behavioral Science, University of Colorado at Boulder
Randolph Stevenson: Department of Political Science, University of Rochester
Alex Mintz: Department of Political Science, Texas A&M University and University of Haifa
Michael D. Ward: Institute of Behavioral Science, University of Colorado at Boulder

Journal of Peace Research, 1996, vol. 33, issue 3, 341-352

Abstract: Evidence from Israel suggests that economic growth may benefit from increased investment rates and cuts in defense spending - in other words, an economic `peace dividend'. Recent scholarly work, however, focusing on short-term, direct impacts, has provided little evidence for the existence of such a peace dividend in other parts of the world or in Israel itself. In this article, we address these competing views by exploring some important indirect, longer-term effects of defense spending on the Israeli macroeconomy. Our results indicate that a short-term focus fails to reveal the process through which a small, positive economic peace dividend appears to be operating in Israel. Rather, the main features of this process are indirect, long-term, and nuanced, operating through investment, delayed several years, with non-military government spending acting as a crucial intervening variable in the process. Whether the decline of defense spending will continue to be associated with rapid economic growth in Israel is problematic. However, like the defense-economy linkage in Israel, so too may the peace dividend operate indirectly and only in the long term. Our analysis shows that these linkages are not static, but change in important and dramatic ways over time.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://jpr.sagepub.com/content/33/3/341.abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:joupea:v:33:y:1996:i:3:p:341-352

Access Statistics for this article

More articles in Journal of Peace Research from Peace Research Institute Oslo
Bibliographic data for series maintained by SAGE Publications ().