Is Military Spending Converging Across Countries? An Examination of Trends and Key Determinants

By Benedict J. Clements, Sanjeev Gupta, Saida Khamidova

September 20, 2019

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Benedict J. Clements, Sanjeev Gupta, and Saida Khamidova. Is Military Spending Converging Across Countries? An Examination of Trends and Key Determinants, (USA: International Monetary Fund, 2019) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper studies the evolution of worldwide military spending during 1970-2018. It finds that military spending in relation to GDP is converging, but into three separate groups of countries. In the largest group, responsible for 90 percent of worldwide spending, outlays have remained stubbornly high. Military spending in developing economies reacts to improvements in security conditions and military spending in neighboring countries, suggesting that further increases in the peace dividend are possible. In developing economies, rising social spending tends to crowd out military outlays, but this is not the case in advanced economies. With social outlays projected to rise as developing countries look to achieve the Sustainable Development Goals (SDGs), military spending could come under pressure to fall further.

Subject: Defense spending, Education spending, Expenditure, Health care spending, Total expenditures

Keywords: Convergence, Country sample, Country's outlay, Data from Stockholm International Peace Research Institute, Defense spending, Education expenditure data, Education spending, Expenditure conditionality, Expenditure side, Global, Health care spending, High-spending country, Military expenditure, Military spending, Social spending, Spending doe, Sub-Saharan Africa, Total expenditures, WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/196
Stock No:

WPIEA2019196
ISBN:

9781513509877
ISSN:

1018-5941

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