Working Papers
1991
May 1, 1991
Military Expenditure: International Comparison of Trends
Description: This paper analyzes trends in world military expenditure by examining the shares of different country groups and the ratio to GDP of individual nations. The coverage is military expenditures in 125 countries from 1972 to 1988. The study also compares military expenditures as a proportion of central government expenditures; analyzes the budgetary trade-off between military, social, and development expenditures; and discusses the impact of military expenditures on economic development.
Notes: Analyzes trends in world military expenditure by examining the shares of different country groups and the ratio to GDP of individual nations.
May 1, 1991
Military Expenditure: Econometric Testing of Economic and Political Influences
Description: Econometric results from an analysis of the determinants of military expenditure in 125 countries during 1972-88 are presented. The dependent variable is the ratio of military expenditure to GDP; included among the explanatory variables are economic and financial indicators, political variables summarizing the form of government, and demographic and geographic features of nations. The results strongly confirm the importance of these variables in explaining cross-country differences in levels of military expenditure.
Notes: Econometric results from an analysis of the determinants of military expenditure in 125 countries during 1972-88 are presented.
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1991
April 1, 1991
Economic Crisis in a Shortage Economy
Description: It is not unusual for reforming socialist economies to relax wage controls without hardening budget constraints on enterprises or freeing consumer goods prices. This policy can be dangerously destabilizing. While higher wages permit workers to purchase more of some goods, they also tend to exacerbate shortages and to breed waste and corruption. Beyond a certain level, economy-wide wage hikes will worsen worker welfare. This is true regardless of whether deficit goods are strictly rationed, are sold randomly at official prices to queuing workers, or are offered to workers by “insiders” only at black market prices. However, the form of allocation does influence output and worker welfare.
April 1, 1991
Proposals for Privatization in Eastern Europe
Description: This paper discusses several proposals for a wholesale privatization of public enterprises in Eastern Europe. These proposals include the distribution of ”vouchers” to private citizens as well as the use of mutual funds, privatization companies and other forms of financial intermediaries. The paper analyzes the implications for economic efficiency of the different forms of ownership and control that would emerge from the proposals as well as their main macroeconomic consequences.
Notes: Also published in Staff Papers, Vol. 38, No. 2, June 1991.