Democracy, Democratic Consolidation and Military Spending

Ibrahim Elbadawi () and Philip Keefer
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Ibrahim Elbadawi: Dubai Economic Council, UAE

No 848, Working Papers from Economic Research Forum

Abstract: We introduce two considerations into the debate about democracy and military spending. First, greater government accountability to citizens should have mixed effects on spending: reducing the component related to rent-seeking and inefficiency, but increasing the component that actually purchases the public good of national security. Second, the relationship between government accountability and spending should be contingent. In particular, we predict that higher national security risks and higher lagged military spending should raise current military spending by less when citizens can hold governments accountable. We test for these predictions in an encompassing model of military spending using global data covering more than 140 countries, and using several subjective and objective measures of accountability. Our results suggest that recent shifts towards democracy in the Arab world should not lead to a quick decline in military spending because only deeper forms of democracy seem to have an effect, particularly in view of the high external risks confronting countries in the region.

Pages: 37
Date: 2014-10, Revised 2014-10
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Published by The Economic Research Forum (ERF)

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