Is defence expenditure a guarantee of human development? A panel data approach in the group of twenty

María Concepción Pérez-Cárceles

Applied Economics, 2025, vol. 57, issue 20, 2569-2580

Abstract: One of the strategic objectives of many countries is to increase the military expenditure level in an uncertain environment due to the recent pandemic and the current Russian invasion of Ukraine. Nevertheless, the multiple effects of defence and security on human development, whose enhancement characterizes the more prosperous countries, should be considered. A depth of controversy about this relationship can be found in the literature. The main aim of this paper is to analyse the effect of military expenditure on the Human Development Index (HDI) using panel data of the G20 countries from 1990–2021. This research is based on dynamic panel data models, where HDI is given as a function of defence expenditure with a two-year lag, among other control variables. The results of the empirical analysis show a positive effect of military expenditure on the present human development that continues the first lag and is moderated in the second lag. The conclusions propose considering human security as a complementary indicator of the HDI. Finally, it is of global interest to maintain a certain and stable environment with the final objective of expanding higher guarantees of continuous human development.

Date: 2025
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DOI: 10.1080/00036846.2024.2326531

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