Military Spending, the Peace Dividend, and Fiscal Adjustment

By Davoodi, Benedict Clements, Jerald Schiff and Peter Debaere
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By Davoodi: International Monetary Fund
Benedict Clements: International Monetary Fund
Jerald Schiff: International Monetary Fund
Peter Debaere: International Monetary Fund

IMF Staff Papers, 2001, vol. 48, issue 2, 4

Abstract: This paper decomposes the sources of the peace dividend into global, regional, and country-specific factors, and analyzes their relative importance. It finds that the easing of international and regional tensions and the existence of IMF-supported adjustment programs are systematically related to lower military spending and a higher share of nonmilitary spending in total government outlays. The easing of international tensions and of regional tensions since the end of the Cold War and the existence of IMF-supported adjustment programs account for 66 percent, 26 percent, and 11 percent of the decline in military spending, respectively. Furthermore, fiscal adjustment has implied a larger cut in military spending of countries with IMF-supported programs. Copyright 2001, International Monetary Fund

JEL-codes: H10 H50 H56 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (15)

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