How Resilient Are Military Expenditures in the Context of Fund-Supported Programs?

International Monetary Fund

No 1988/048, IMF Working Papers from International Monetary Fund

Abstract: This paper examines how military spending has been affected by Fund-supported programs. It looks at the changes in military expenditure as a share of gross domestic product (MIL/GDP) and of total expenditure (MIL/EX) for two subsamples of Fund-supported programs, broadly divided into fiscal tightening and fiscal accommodating. Under fiscal tightening, the evidence suggests that MIL/GDP decreases during Fund-supported programs, but that MIL/EX increases, revealing resilience to budgetary adjustments. Under fiscal accommodation, as total government expenditure tends to increase, so does military expenditure; however, the ratio MIL/EX declines, as fewer additional resources are allocated to the military.

Keywords: WP; military; spending; During Fund; government expenditure; Fund-supported program; program period; adjustment program; expenditure restraint; defense expenditure; Defense spending; Total expenditures; Government finance statistics; Budget planning and preparation; Middle East; Africa (search for similar items in EconPapers)
Pages: 48
Date: 1988-01-01
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