Country Survey: Military Expenditure And Its Impact On Productivity In Italy, 1988--2008

Raul Caruso () and Francesco Addesa

Defence and Peace Economics, 2012, vol. 23, issue 5, 471-484

Abstract: This paper analyses the military expenditures in Italy over the period 1988--2008. The estimation of a conventional model of military expenditure shows that the choices of military expenditure by Italian governments are influenced by US and, to a lesser extent, the other NATO countries' defence spending. In particular, the negative association between the US and NATO average military expenditure on the Italian one suggests a free-rider behaviour of Italy. Eventually, we focus on the relationship between productivity and military expenditure. The results suggest that there is a negative association between productivity and military expenditures in the long run. Namely, if military expenditures were substituted by civilian expenditures, the Italian overall productivity would be expected to improve.

Date: 2012
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DOI: 10.1080/10242694.2011.608964

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