Demand for Military Spending: The case of the MENA Region

Mohamed Douch and Binyam Solomon

MPRA Paper from University Library of Munich, Germany

Abstract: Arab Spring and the domestic unrest and the threat of terrorism that followed are not the main causes of the recent spike in military spending in the region, as the bulk of arms purchases have largely been conventional heavy weaponry, such as combat aircraft, armored vehicles, and missile systems. The results indicate that military spending in the MENA region does exhibit high income elasticity and status is further signaled through regional clubs such as the Arab League. MENA countries face substantial opportunity cost of military spending and only weakly respond to local threats. The so-called ‘resource curse’ is not a strong indicator of military posture in MENA especially within the neoclassical demand model setting and robust estimation that account for dynamics and endogeneity.

Keywords: Threat; Nuclear arsenal, Demand for Military Expenditure; Middle East North Africa; Dynamic Panel Data; status; positional goods (search for similar items in EconPapers)
JEL-codes: C23 H56 (search for similar items in EconPapers)
Date: 2017-10-15
New Economics Papers: this item is included in nep-ara
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https://mpra.ub.uni-muenchen.de/93509/1/MPRA_paper_88689.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:88689

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