The demand for military spending in developing countries

Abstract

Numerous studies have estimated demand for military expenditure in terms of economic, political and strategic variables. Ten years after the end of the Cold War, this paper attempts to ascertain if the new strategic environment has changed the pattern of determinants, by estimating cross-country demand functions for developing countries for periods during and just after the Cold War. The results suggest that, for both periods, military burden depended on neighbours' military spending and internal and external conflict. Democracy and population both relate negatively to military burden. There is little evidence of a change in the underlying relationship between the periods.