Guns better than butter in Pakistan? The dilemma of military expenditure, human development, and economic growth

Muhammad Luqman and Nikolaos Antonakakis

Technological Forecasting and Social Change, 2021, vol. 173, issue C

Abstract: The so-called ‘guns and butter’ phenomenon reflects that Pakistan is experiencing a difficult choice to improve defense and welfare sector to achieve sustainable economic growth. However, results remain controversial. Therefore, this paper attempts to explore the long and short-term associations among military expenditure, human development, and economic growth as informed by both urbanization and food deficit from 1965 to 2016. This study applies a newly-developed econometric model of Quantile Autoregressive Distributive Lag that not only takes asymmetries into account but also captures all conditions simultaneously. Our findings indicate that military expenditure has a negative impact on human development and economic growth, while urbanization and food deficit have a positive effect on it. We also confirm this long and short-run equilibrium by applying the Wald test. Possible economic policy implications - such as improving the quality and quantity of education, a true implementation of the National Rural Support Program, and improving gender equity in the Pakistani economy - are also discussed.

Keywords: Military expenditure; Human development index; Economic growth; Quantile autoregressive distributive lag model; Pakistan (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:173:y:2021:i:c:s004016252100576x

DOI: 10.1016/j.techfore.2021.121143

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