Military Spending, the Peace Dividend, and Fiscal Adjustment

Benedict Clements, Jerald Schiff, Peter Debaere and Hamid Davoodi

No 1999/087, IMF Working Papers from International Monetary Fund

Abstract: The end of the Cold War has ushered in significant changes in worldwide military spending. This paper finds that the easing of (1) international tensions, (2) regional tensions, and (3) the existence of IMF-supported programs are related to lower military spending and a higher share of nonmilitary spending in total government outlays. These factors account for up to 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.

Keywords: WP; military spending; peace dividend; fiscal adjustment; spending-GDP ratio; spending datum; equation from the government spending equation; police expenditure; international tension; Defense spending; Total expenditures; Estimation techniques; Current account surpluses; Global (search for similar items in EconPapers)
Pages: 32
Date: 1999-07-01
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Citations: View citations in EconPapers (3)

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