Demilitarization and economic growth: Empirical evidence in support of a peace dividend

Anthony A. Mayberry

Journal of Comparative Economics, 2023, vol. 51, issue 3, 960-988

Abstract: This paper analyzes the implications of demilitarization on economic growth. I create a new data set of military transitions since 1960 and measure the effect of demilitarization in countries that reduced their military capabilities and subsided aggressive or violent behavior. Semiparametric difference-in-difference estimates predict that on average, demilitarization is associated with a 1% higher annual GDP per capita than if the country had remained militarized. Dynamic analysis shows that on average, GDP per capita is 15%–20% higher 20 years after transition. These findings provide empirical evidence in support of a Peace Dividend.

Keywords: Demilitarization; Economic growth; Difference-in-differences; Peace dividend (search for similar items in EconPapers)
JEL-codes: O11 P16 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:51:y:2023:i:3:p:960-988

DOI: 10.1016/j.jce.2023.04.001

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