The peace dividend: military spending cuts and economic growth
Norman Loayza () and
Delano Villanueva ()
No 1577, Policy Research Working Paper Series from The World Bank
Conventional wisdom suggests that reducing military spending may improve a country's economic growth, but empirical studies have produced ambiguous results on this point. Extending a standard growth model, the authors exploit both cross-section and time-series dimensions of available data to get consistent estimates of the growth-retarding effects of military spending. Military spending is growth-retarding because of its adverse impact on capital formation and resourceallocation. Model simulation results suggest a substantial long-term peace dividend - in the form of higher capacity output per capita - that may result from: 1) markedly lower military spending in most regions in the late 1980s; and 2) future cuts in military spending if global peace is secured.
Keywords: Legal Products; Peace&Peacekeeping; Economic Theory&Research; Environmental Economics&Policies; Decentralization; Peace&Peacekeeping; Achieving Shared Growth; Inequality; Economic Theory&Research; Legal Products (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (106) Track citations by RSS feed
Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... d/PDF/multi0page.pdf (application/pdf)
Journal Article: The Peace Dividend: Military Spending Cuts and Economic Growth (1996)
Working Paper: The Peace Dividend; Military Spending Cuts and Economic Growth (1995)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:1577
Access Statistics for this paper
More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().