Military expenditure and economic growth in Middle Eastern countries: A dynamic panel data analysis

Yıldırım Öcal J., Sezgin S., Ocal N.

DEFENCE AND PEACE ECONOMICS, vol.16, no.4, pp.283-295, 2005 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 16 Issue: 4
  • Publication Date: 2005
  • Doi Number: 10.1080/10242690500114751
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.283-295
  • Keywords: military expenditure, economic growth, defence economics, dynamic panel data analysis, DEFENSE EXPENDITURES, CAUSAL-ANALYSIS, TIME-SERIES, MODEL
  • TED University Affiliated: No


Defence expenditures have both costs and benefits to the economy. The costs of defence expenditures are mainly emphasized as opportunity costs. On the other hand, defence spending may have growth-promoting potential benefits: a rise in defence spending may result in a higher aggregate demand, production and employment. This paper examines empirically the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time-period 1989-1999. The relationship between military expenditure and economic growth is investigated by using cross-section and dynamic panel estimation techniques. Empirical analysis indicates that military expenditure enhances economic growth in the Middle Eastern countries and Turkey as a whole.