essay on military spending

The United States Military Spending Essay

Gdp and military spending, comparison with other countries, reason for the increasing and reducing budget, works cited.

In recent years, the expenditure of the US military has been rising and now accounts for more than 19 percent of the total federal budget. In 2010, expenditures including costs outside the Department of defense stood at about 35 percent of budget expenditures (Wall par. 2-6). Since the year 2000, the expenditure by the department of defense has been increasing annually by about 9 percent.

In 2009, the budget of the US military amounted to about 5 percent of the Gross Domestic Product. In 2010, the amount given to the United States Department of defense was approximately US$660 billion (Macias par. 1-7). This amount was the highest in American history, but still 1.5 percent lower than the GDP.

Source: (Macias par. 4-7).

The budget of the US military is actually the highest in the world. In 2012, China spent about US$100 billion on military activities, but still this amount was almost seven times lower compared with what the US military spent. The main reason behind the spending is that the United States had the largest number of barracks and military bases located in different parts of the world (Wall par. 2-4). In 2005, the United States spent about 5 percent of its Gross Domestic Product on military activities. This was more than what the top four countries combined used on military activities. In 1944, the US military budget was the highest as it was about 40 percent of the GDP. The lowest point was recorded in 1999 where military spending amounted to about three percent of the GDP (Macias par. 3-7). During the Vietnam War, in the late 1960s, the spending on military activities was the highest and equaled to about 10 percent of the GDP.

Source: (Korb, Hoffman and Blakeley par. 2-8).

Source: (Cassata par. 2-4).

When an emergency arises, the US military is usually funded through supplementary budgets. However, in 2011, the federal government classified oversees operations of the US army as being contingent. This meant that such military operations would no longer be funded under an emergency plan but under the federal budget (Korb, Hoffman and Blakeley par. 4-7). The operations in Afghanistan and Iraq, by the end of 2009, had cost the United States more than US$1 trillion in direct costs (Korb, Hoffman and Blakeley 2-4). On top of this, the federal government incurred indirect expenses, which comprised interests on extra debt and incremental expenses, specifically on caring for more than 30,000 injured soldiers. At the end of 2011, the Afghanistan and Iraq war had cost the United States US$3.7 trillion in general. The United States military spending started reducing in 2011. For instance, in 2011 and 2012, the U.S defense spending declined by about US$40 billion (Korb, Hoffman and Blakeley par. 3-5). Despite this, the United States was still the highest spender compared to China and other top spenders.

The increase in US military spending was attributed to the operations in Afghanistan and Iraq. However, the decrease in spending is attributed to two major reasons. The first is the reduction as a result of the termination of Iraq war in 2011 as well as reduced military operations in Afghanistan. Second, there is a huge budget deficit crisis in the United States, and it has been the only remedy to reduce military spending (Korb, Hoffman and Blakeley par. 4-9). In fact, if there will be no other international conflict, the US defense budget is likely to continue falling as the federal government has already ordered that the military personnel must be reduced (Cassata par. 2-5). The explanation is that short-term changes in the US military spending usually depend on economic growth. In fact, spending amongst nearly all the top five military spenders declined in 2012 apart from China (Cassata par. 2-5). In the case of China, the military spending in 2011 and 2012 increased by about 7.9 percent, and by over 45 percent since the recent financial crisis started. Mainly, this is attributed to geopolitical reasons as well as the booming of the Chinese economy. With enough money and resources, the Chinese government can afford to sustain an oversized military.

Cassata, Donna. Pentagon Pleas for Flexibility go Unheeded as House Panel Spares Older Weapons, Benefits. 2014. Web.

Korb, Lawrence, Max Hoffman and Kate Blakeley. A User’s Guide to the Fiscal Year 2015 Defense Budget. 2014. Web.

Macias, Amanda. This Chart Shows How The Rest Of The World Doesn’t Even Come Close To US Military Spending. 2014. Web.

Wall, Robert. U.S. Military Spending Plan Will Give BAE Systems More Stable Outlook –CEO . 2014. Web.

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Farhad Manjoo

We Must Stop Showering the Military With Money

By Farhad Manjoo

Opinion Columnist

Last month, Senator Joe Manchin, the West Virginia Democrat who has frustrated much of President Biden’s policy agenda, released a statement confirming what he’d been hinting for weeks. He would not vote for the Build Back Better Act, the Democrats’ $2.2 trillion 10-year plan to address climate change and invest in child care, health care and education. Manchin argued it would increase inflation, harm the electricity grid and hamper national security and was simply just too “mammoth” and “sweeping” to support.

“I have always said, ‘If I can’t go back home and explain it, I can’t vote for it,’” he said .

I don’t doubt the political wisdom of Manchin’s pledge to support only what he can explain. I do wonder, though, how he applies his maxim to a far more mammoth, more sweeping piece of the federal budget: the nearly three-quarters of a trillion dollars that we are spending this year on a military that has become the epitome of governmental dysfunction , self-dealing and overspending.

Of course, I’m only kidding. I don’t actually wonder about Manchin’s stance on showering the Department of Defense with more money than it asks for, even more than it seems to know what to do with . Right around the time he was bayoneting Build Back Better, Manchin joined 87 other senators — Democrats and Republicans — in rubber-stamping another gargantuan budget for the Pentagon. They allocated $768 billion for the military in 2022, roughly $24 billion more than the White House requested from Congress.

Given all the challenges we face at home, does it make any sense to keep spending so many hundreds of billions on the Pentagon? And even just in terms of fighting wars, can anyone be satisfied with the way the military is managing its funds? The Pentagon has never passed an audit and says it may not be able to until 2028 .

In 2020 the U.S. military’s budget accounted for almost 40 percent of the world’s military expenditures. This level of spending has long been excessive, but after a pandemic that has claimed the lives of more Americans than any war we fought , continuing to throw money at the military is an act of willful disregard for the most urgent threats we face.

According to a projection by the Congressional Budget Office , Congress is projected to spend about $8.5 trillion for the military over the next decade — about half a trillion more than is budgeted for all nonmilitary discretionary programs combined (a category that includes federal spending on education, public health, scientific research, infrastructure, national parks and forests, environmental protection, law enforcement, courts, tax collection, foreign aid, homeland security and health care for veterans).

You don’t have to be a pacifist to wonder if this imbalance between military and nonmilitary spending makes sense. When we face so many other major challenges — from climate disasters to political instability and insurrection — shouldn’t we ask whether it remains wise to keep handing the military what is effectively a blank check? Are such lavish resources even good for national defense, or might the Pentagon’s near-bottomless access to funds have encouraged a culture of waste and indulgence that made it easier to blunder into Iraq and contributed to its failures in Afghanistan ?

This gets to what’s most frustrating about the Pentagon’s enormous budget: the halo of protection it enjoys in our political culture. Despite the Pentagon’s numerous missteps, our representatives too rarely ask how much money for the military may be way too much money for the military. We have long national debates about whether it makes sense to spend on things like parental leave or college tuition, but lawmakers seldom expect such rigor from the Defense Department. For example, why should we keep building aircraft carriers — each of which costs about $1.5 billion a year to operate — when we’ve already got most of the world’s fleet of active aircraft carriers? (We’ve got 11; no other nation has more than two, though China may be launching a third soon.)

There is ample evidence that Congress’s reluctance to ask basic questions of the Pentagon has harmed, rather than helped, the military’s effectiveness. Consider the boondoggle that is the F-35 Joint Strike Fighter program — the plan the Pentagon conceived in the 1990s to build a new plane, which is expected to cost taxpayers more than $1 trillion over its 60-year life span. A recent audit from the Government Accountability Office found that even the Pentagon’s extended timeline for when the plane might finally go into full production is “not achievable,” and there were more than 850 “open deficiencies” in the project as of November 2020. I wonder if Manchin could explain to his constituents how tolerating such a level of mismanagement is good for our security.

I also wonder if Manchin could explain the staggering size and top-heaviness of the Pentagon’s staffing — why the ratio of enlisted troops to officers is declining across the U.S. forces, cluttering the chain of command with layers of bureaucracy. A 2015 internal study found that the Pentagon employed (or hired contractors to employ) nearly as many deskbound, back-office people as it had active-duty troops. The report found that it could save $125 billion a year by, among other measures, reducing overstaffing through retirements and attrition. The Pentagon buried that report, according to The Washington Post .

Not only do lawmakers give the Pentagon a free pass on its budget; sometimes they even force the agency to keep the little fat it’s trying to trim. The Air Force says that it’s ready to retire its fleet of A-10 Warthogs, fighter airplanes that date back to the 1970s. Congress forbade any such reduction in 2022.

Starting in 2017, Congress even required each military service to submit an annual wish list of “unfunded priorities” — that is, goodies that the services might want but that the White House had not requested in its budget. It has since become routine for Congress to not only give the Pentagon much of what it asks for but also ladle on extras .

The reasons such spending persists aren’t a big mystery. The military-industrial complex is every bit as politically powerful as Dwight Eisenhower warned it would be. (A recent Wall Street Journal headline captured the situation well : “Who Won in Afghanistan? Private Contractors.”) In another trick, the military spreads its contracts to a large number of congressional districts , giving every lawmaker a reason to celebrate excessive military spending. ( Manchin put out a statement taking credit for all the benefits the new defense appropriation will bring to West Virginia.)

And finally, there is plain patriotic posturing: Because every dollar to the Pentagon can be defended as protecting the troops and the nation’s security, no politician will ever get in trouble for giving too much money to the military.

Mandy Smithberger, who studies Pentagon excess at the Project on Government Oversight, a nonpartisan independent group, told me that while she has hopes that younger generations will begin to question the military’s excessive spending, the situation is unlikely to change anytime soon.

“It’s going to take members of Congress to really step up,” she said. That seems about as likely as pigs flying — or, more aptly, F-35s.

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Farhad Manjoo became an Opinion columnist for The Times in 2018. Before that, they wrote the State of the Art column. They are the author of “True Enough: Learning to Live in a Post-Fact Society.” @ fmanjoo • Facebook

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How much does the US spend on the military?

Since 1980, defense spending has risen by 62%, climbing from $506 billion to $820 billion by 2023, after adjusting for inflation.

Published Thu, April 11, 2024 by the USAFacts Team

In 2023, the US military spent approximately $820.3 billion, or roughly 13.3% of the entire federal budget for that fiscal year. In March 2023, the Department of Defense (DoD) requested $842.0 billion for 2024 — a 2.6% increase.

With the world’s third-largest military , at nearly 1.3 million active-duty troops , the US estimates it spends more than any other nation on its national defense. Between 2014 and 2022, the US spent more than twice as much on defense as did all other NATO members , 30 nations in total.

According to the 2022 National Defense Strategy , US military priorities include countering China’s military presence in the Indo-Pacific; deterring strategic attacks against the US and allies; defending against evolving threats like cyberattacks and addressing aggression from Russia , Iran, and North Korea.

Where does military spending go?

The annual defense budget is a comprehensive financial plan that underpins the US military’s strategic objectives. When the government renews the military budget, it allocates funds across several key areas to support national defense and the operation of the Armed Forces.

The 2024 defense budget clarifies how much funding each military department will receive. Out of the five major Armed Forces managed by the DoD, the Air Force gets the most direct funding at $216.1 billion, followed by the Navy ($202.6 billion), Army ($165.6 billion), Marine Corps ($53.2 billion), and Space Force ($30.1 billion).

The remaining DoD funds are allocated to the National Guard ($32.9 billion), along with focused programs like the Special Operations Command (US SOCOM), the Missile Defense Agency, and the Defense Health Program .

The DoD’s 2024 defense budget was signed into law on December 22, 2023 at $841.4 billion, slightly less than was initially requested.

Has military spending increased over time?

After adjusting for inflation, defense spending has risen 62% since 1980, climbing from $506 billion to $820 billion by 2023. Despite the sizeable increase, defense spending growth lags behind overall federal expenditures, which rose 175% over the same period (also adjusted for inflation).

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Defense spending responds to external pressures — wars and international conflicts — and internal pressures like reductions in government spending. The collapse of the Soviet Union and the ensuing end of the Cold War resulted in a substantial drop in defense spending throughout the 1990s; the Global War on Terror and overseas operations in Iraq and Afghanistan beginning in the 2000s saw spending rise again.

Inflation-adjusted defense spending peaked in 2010 at $964.4 billion, partially due to evolving military situations in the Middle East like operations against the Islamic State, or ISIS.

The defense budget dropped in 2012 after the Budget Control Act of 2011 , which aimed, among other things, to limit military spending to help stabilize the increasing national deficit. As of 2021, these annual caps on defense spending are gone.

What percentage of the US budget goes toward the military?

In 2023, defense spending made up 13.3% of the federal budget. Since 1980, the percentage of federal spending for the military has fluctuated between a height of 27.9% in 1987 and lows of 11% in 2020 and 2021.

Is military spending expected to increase?

According to the Congressional Budget Office , military spending is projected to increase by 10% by 2038, after adjusting for inflation. This estimate comes from the rise in costs to compensate military personnel, the operation and maintenance budget, and a slight uptick in the cost of new weapon systems.

How does US military spending compare to other countries?

State Department data on military expenditures from 2009 to 2019 shows that the US has spent as much on its defense as the next 11 top-spending countries combined. China had the next-highest expenditure, investing, on average, less than 30% of what the US allocates. India, Russia, Saudi Arabia, and the United Kingdom trail further behind.

Although the US significantly outpaces all other countries in total military spending, military expenditures relative to population size present a different yet crucial perspective. Analyzing defense spending per person highlights how nations with smaller populations commit a larger share of their resources to military efforts.

Looking at per-capita military spending from 2009 to 2019, Middle Eastern countries occupy six of the top 10 positions (the US is fifth). The United Arab Emirates spends an average of $3,198 per person on the military each year, compared to $2,798 in the US.

Another way to gauge how much countries spend on their military is by measuring the proportion of military spending to GDP. This helps illustrate how much the state values national defense compared to other key economic sectors.

How much foreign aid does the US send to other countries?

Measuring this way — again, from 2009 to 2019 — North Korea ranks at the top, with 23.5% of the country’s GDP coming from military expenses on average. This far outranks every other nation; the second-highest, Oman, comes in at 11.8%.

The US comes in 21st on this list, at an average of 4% of its GDP. 

What factors contribute to the US' military spending?

The US allocates resources to its military to prevent strategic threats against its territory, ensure the safety of its citizens, support global security by protecting its allies, and contribute to economic stability.

In the 2024 Defense Budget proposal, the DoD outlines four key military priorities based on the 2022 National Defense Strategy (NDS) :

• Defending the homeland, with a specific focus on addressing the complex threats posed by China.
• Deterring strategic attacks against the United States, its allies, and partners, emphasizing the importance of security in the Indo-Pacific region to counter China and in Europe against Russia.
• Deterring aggression and being prepared to prevail in conflict when necessary, ensuring readiness for a range of military engagements.
• Building a resilient joint force strategy that enhances the defense ecosystem and maintains and extends the technological and operational advantage of the US military.

The NDS highlights China as the United States' foremost competitor, stressing the importance of addressing China's influence in the Indo-Pacific region and its efforts to alter the international order. Additionally, the strategy acknowledges the necessity of a robust military to counter threats from Russia, Iran, North Korea, and violent extremist groups. This approach aims "to protect the security of the American people; expand economic prosperity and opportunity; and realize and defend the values at the heart of the American way of life.

The NDS also identifies our main military challenges: the rise of authoritarian powers, technological advancements like artificial intelligence, global economic inequality, and climate change.

Where does this data come from?

Data on DoD spending comes from the 2024 Defense Budget Overview . Additional materials, including budget documents specific to each branch of the Armed Forces and specific defense initiatives, come from the Under Secretary of Defense (Comptroller) and DoD press releases .

Additional data on national defense spending in previous years comes from a USAFacts custom aggregation of data from the Office of Management and Budget, the Census, and Bureau of Economic Analysis.

Data comparing US military expenditures to other countries comes from the 2021 World Military Expenditures and Arms Transfers report, published by the State Department. This survey offers insights into each country's military expenditure, armed forces size, GDP, population, labor force, and other key metrics from 2009 to 2019.

Learn more about why young Americans don’t want to join the military and the demographics of the Armed Forces , and get the data directly in your inbox by signing up for our email newsletter .

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• Government & Policy

How Military Spending Affects the Economy

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

The Stockholm International Peace Research Institute (SIPRI) has excellent data on military spending by nation. According to its research, the five biggest spenders in 2019 were the United States, China, India, Russia, and Saudi Arabia. Together, these countries made up around 60% of global military spending.  

In 2019, U.S. military expenditure increased by almost 5.3% to $732 billion. China increased its military spending by 5.1%, India increased its spending by 6.8%, Russia increased it by 4.5%, and Saudi Arabia decreased it by 16%.  

As with any government spending, these investments have an impact on the economies of the nations that make them.

The Why of Military Spending

Military spending is one area where there is no private solution. No single corporation or group of citizens is motivated and trustworthy enough to take financial responsibility for maintaining a nation's military.

Key Takeaways

• Every dollar spent on defense is a dollar not spent on other public services.
• On the other hand, dollars spent on the military wind up in the private sector as payment for goods and services the military requires.
• Military spending may skew civilian technology development, but talent and applications flow both ways.

Adam Smith , a father of free-market economics, identified the defense of society as one of the primary functions of government and a justification for reasonable taxation.     The government is acting on behalf of the public to ensure that the military is capable of defending the nation.

In practice, defending the nation expands to defending a nation’s strategic interests. And, the whole concept of “sufficient” is up for debate in any democracy.

The Hole That Debt Built

Capital is finite, and capital going into one spending category means less money for something else.

This fact becomes more urgent when we consider that any government spending that exceeds revenues results in a deficit, adding to the national debt . A ballooning national debt has an economic impact on everyone. As the debt grows, the interest expense of the debt grows and the cost of borrowing increases due to the risk that increased debt represents. In theory, the increased debt will eventually drag on economic growth and drive taxes higher.

The Cost of Borrowing

The U.S. has historically enjoyed generous debt terms from domestic and international lenders. That tends to reduce political pressure to cut military spending in order to reduce the deficit.    

Some advocates for decreased military spending might tie it to a real or potential increase in the mortgage rates people pay, given the relationship between Treasury yields and commercial lending.   This reasoning holds and military spending does sit as a large percentage of discretionary spending.     

In other nations, particularly ones that are still developing economically, a focus on military spending often means foregoing other important priorities. Many nations have a standing military but an unreliable public infrastructure, from hospitals to roads to schools. North Korea is an extreme example of what an unrelenting focus on military spending can do to the standard of living for the general population.

The generous debt terms that the U.S. enjoys are far from universal, so the trade-off between military spending and public infrastructure is more painful for many nations.

Employment and Military Spending

Jobs are a big part of the economic impact of military spending. In addition to supporting the troops, military spending creates a considerable infrastructure to support the active-duty personnel.

Then there are the private businesses that spring up as a result of the military spending, including everything from weapons manufacturers to the restaurants that pop up near military bases.

Public vs. Private

A free-market economist would point out that the public dollars supporting those may be sucking the equivalent number of jobs—or more—out of the private economy due to the taxation required to create them.

It really comes down to whether or not you believe a standing military is a necessity. If it is, then some jobs will need to be sacrificed in the private sector to make that happen.

Technological Developments

One argument for the negative economic impact of military spending is that it diverts critical talent and technical skills towards military research and development.

Guns and Butter

This famous model illustrates the balance between military and civilian spending priorities.

On the other hand, technology and talent flow back and forth between military and civilian roles. Military research has been vital to the creation of the microwave, the internet, and global positioning systems (GPS), among other applications. We now have drones taking wedding photos and, at least in tests, delivering packages for Amazon.com. Much of the expense of creating the basic technology was covered through military spending.

The guns and butter curve is a classic illustration of how there is an opportunity cost to every expenditure. If you believe a standing military is a necessity for a nation, the size of that military can be disputed but its existence cannot.

The economic cost of defense spending shows up in the national debt and in a dislocation of potential jobs from the private sector to the public. There is an economic distortion of any industry that the military relies on as resources are diverted to produce better fighter planes and weapons.

All of these costs are necessary for a nation to bear if they are to defend themselves. We give up some butter to have guns.

The Big Question

The real question is what an “adequate” amount of military spending is, given that every extra dollar spent above the necessary level is a loss to public spending on any other purpose.

In a democracy, that issue is debated by publicly elected officials and changes from year to year. In recent years, military spending in the U.S. as a percentage of the overall budget has been declining as military engagements abroad wind down.  

In non-democratic nations, however, the level of adequate spending is decided by a select few and may come at an even greater cost to the country’s citizens.

Stockholm International Peace Research Institute. " Military Expenditure ."

Stockholm International Peace Research Institute. " Trends in World Military Expenditure, 2019 ," Pages 2-3.

The Library of Economics and Liberty. " An Inquiry into the Nature and Causes of the Wealth of Nations–Book V, Chapter l ."

The Library of Economics and Liberty. " An Inquiry into the Nature and Causes of the Wealth of Nations–Book IV, Chapter 5 ."

TreasuryDirect. " Summary Schedules of Federal Debt – Daily, Unaudited ."

U.S. Government Accountability Office. " Action Is Needed to Address the Federal Government's Fiscal Future–Highlights ."

U.S. Department of the Treasury. " Interest Rates - Frequently Asked Questions ."

Congressional Budget Office. " Discretionary Spending in 2019 ."

Government Publishing Office. " Budget 2019: Contents of the Historical Tables ," Pages 58-59.

The World Bank. " Military Expenditure (% of General Government Expenditure) - United States ."

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• v.6(12); 2020 Dec

Does military spending stifle economic growth? The empirical evidence from non-OECD countries

Muhammad azam.

a Department of Economics, Faculty of Business & Economics, Abdul Wali Khan University Mardan, Khyber Pakhtunkhwa, Pakistan

b School of Economics, Finance & Banking, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia

Associated Data

Data will be made available on request.

Undeniably, peace and long-term sustainable economic development are the prime agenda of all countries. This study aims to empirically evaluate the impact of military spending on economic growth for a panel of 35 non-OECD countries over 1988–2019. A multivariate regression model based on the augmented production function is used to achieve the objective of the study. The panel autoregressive distributed lag (ARDL)/pooled mean group (PMG) technique is employed, while, in addition the robust least squares and fixed-effect estimators are implemented for the robustness of the results. This study found a clear negative effect of military spending on economic growth. The pairwise Dumitrescu Hurlin panel causality test results exhibit bi-directional causality between military expenses and economic growth. Overall, these estimates provide strong support that military expenditure is not beneficial rather detrimental to economic growth. The empirical findings of this study suggest that policymakers need to redesign the military budget to stimulate economic growth and improve social welfare.

Military spending; Economic growth; Non-OECD countries; Balanced panel data.

1. Introduction

The assessment of the economic and social effects of military expenditure remains an interesting desirable area of research. The ultimate objectives of underdeveloped and developed countries are to achieve sustainable economic growth and prosperity in the long-run. There is a substantial volume of literature about the economic consequences of military expenditure; however, no consensus has been developed, whether military spending is beneficial or detrimental to economic growth. Military spending according to the Keynesian approach is a component of government consumption, which stimulates economic growth by expanding demand for goods and services. Military spending affects economic growth through many channels. When aggregate demand is lower relative to prospective supply, rises in military spending tend to enlarge capacity utilization, raise profits, and consequently, enhance investment and aggregate output ( Faini et al., 1984 ). Several prior studies have drawn findings that support the Keynesian military view of the positive influence of military expenditure on national output ( Benoit, 1978 ; Khalid and Noor, 2018 ; Raju and Ahmed, 2019 ). In a study conducted by Lobont et al. (2019) , it is ascertained that military spending has several positive effects on capital, labor, growth, and the effectual use of available resources in the economy as a whole.

The focus of academicians, researchers, and developmental economists for peace economics are useable as military spending is one of the main concerns of countries, regardless of their development status. According to conventional logic, the military formulation is an economic encumbrance. While comparatively more resources are devoted to military formulations, and lesser proportion is left for investment in the education and technology sectors, which play a vital role in the economic growth process and provide a broader base for socio-economic development 1 . Generally, it is believed that in the insecure region, each country deliberately allocates an uneven share of its meager economic resources to “unproductive” military expenditure. In the absenteeism of international collaboration to minimize political pressure, military expenditures can be driven more and more across a region as each country goes beyond its neighbors to safeguard its security, raise the level of regional military expenditure and bring little rise or even a decline in the security of all. However, there are two direct and interconnected ways by which higher military expenditure may unfavorably affect long-run economic growth. First, military spending upsurge may diminish the total accumulation of existing resources available for other domestic usages such as investment in prolific capital, education, and market-oriented technological enhancement. Second, high military expenditure can intensify misrepresentations that condense the efficiency of resource distribution, thereby diminishing the total yield factor 2 .

Military expenditure tends to attenuate productivity because more funds diversion to military expenditure causes the government to either increase taxes or get loans from the foreign capital market to balance its budget. The second alternative is therefore primarily harmful to economic prosperity, since it escalates the rate of interest, decreases investment and consumer demand, and drives economic growth sluggish ( Russett, 1969 ; Borch and Wallace, 2010 ). In a similar vein, some other studies including Lim (1983) noted that military expenses are harmful to the growth of any economy. Even, a study by Dunne (2000) focusing on the Keynesian framework reveals that military spending has no influence on growth at best, but most probably has an inverse effect; obviously, there is no indication of a positive influence of military burden on economic growth. This implies that disarmament certainly offers a prospect for augmented economic performance.

Figure 1 shows the trend analysis of Latin American and Caribbean; lower middle income, low & middle income, and world military expenditure in billion US$. The trend analysis reveals that defense spending has grown from 1980 to 2019.

Trend analysis of the military spending in US$. Data source : World Development Indicators (2020) , the World Bank.

The motivation of this study is based on the growing global military burden–worldwide military spending as a share of global GDP–in 2019 it was estimated at 2.2%, a minor upsurge from 2018. Military expenditure per head increased from USD243 in 2018 to USD249 in 2019. In 2019, non-OECD countries' China and India were the 2nd and 3rd largest military payers in the world respectively 3 . Likewise, the statistics reveal that military expenditures have been increasing in many non-OECD countries which are not a good symptom for national economic development and the desired level of social welfare. Moreover, there are still very limited empirical studies on non-OECD countries except Lee and Chen's (2007) study, where the authors evaluate the long-run causality between defense expenditure and national income using panel data for 62 non-OECD countries from 1988–2003.

The main objective of this study is to explore empirically the impact of military expenditure on growth in the context of 35 non-OECD (Organization of Economic Cooperation & Development) countries from 1988 to 2019. The panel of countries is considered based on balanced and consistent data availability 4 . I assume that all sample countries have similar characteristics. This study contributes to the growing literature on the effects of defense expenditures on growth in four novel ways. Firstly , this study analyzes the effect of defense spending on a panel of 35 non-OECD countries, where military spending has been increased substantially during the investigated period. To the best of our knowledge, none of the existing studies covers this large panel of non- OECD countries. Secondly , unlike the erstwhile studies, I employed the Panel ARDL/PMG approach, and the methods of Robust Least-Squares, and Fixed-Effect for the robustness of results. Additionally, the commonly used heterogeneous panel Granger causality test by Dumitrescu and Hurlin (2012) is employed to find the causal linkages between the variables. Thirdly , I used a different portfolio of regressors to avoid any misspecification of the growth equation. Finally , I have articulated several prior studies to comprehend the problem in depth. Consequently, to mitigate the gap in the literature, this study contributes to the literature about the impact of military spending on economic growth for less developed countries.

The remainder of this study is structured as follows. Section 2 contains the literature review. Section 3 deals with the empirical methodology and data. Section 4 consists of empirical results and discussion. Finally, section 5 concludes the study.

2. Literature review

2.1. the theoretical literature on defense sending and economic growth relationship.

Benoit (1978) documented that countries with substantial defense expenditure mostly had the quickest rate of growth compared to those with the lowermost defense expenditures which tended to exhibit the lowermost growth rates. On the positive contribution of defense spending in economic growth Benoit (1978) noted that “Defense programs of most countries make tangible contributions to the civilian economies by (i) feeding, clothing, and housing a number of people who would otherwise have to be fed, housed, and clothed by the civilian economy-and sometimes doing so, especially in less developed countries, in ways that involve sharply raising their nutritional and other consumption standards and expectations; (ii) providing education and medical care as well as vocational and technical training (e.g., in the operation and repair of cars, planes, and radios; in hygiene and medical care; in construction methods) that may have high civilian utility; (iii) engaging in a variety of public works-roads, dams, river improvements, airports, communication networks, etc.-that may in part serve civilian uses; and (iv) engaging in scientific and technical specialties such as hydrographic studies, mapping, aerial surveys, dredging, meteorology, soil conservation, and forestry projects as well as certain quasi-civilian activities such as coast guard, lighthouse operation, customs work, border guard, and disaster relief which would otherwise have to be performed by civilian personnel. Military forces also engage in certain R & D …… which might not be economically produced solely for civilian demand.” (p. 277).

A study conducted by Narayan and Singh (2007) claim that the direct and indirect contribution to the national income by defense spending is consistent with the Keynesian theory of consumption.

On the other hand, Smith (1977) expounded that in interpreting the empirical results of any study, it is required to have a valid theory, even if it may not by itself be provable. Unfortunately, there is no economic theory to this date covering the economic impact of defense expenditure. 5 Deger and Smith (1983) noted that the classical school of thought argues that an upsurge in defense spending is likely to impede economic growth. This argument is based on the principle that greater defense expenditure indicates a lower level of private investment, savings, and consumption due to small aggregate demand. In other words, increased military spending contributes to a rise in the interest rate, which subsequently overwhelms private investment. The Keynesian school of thought argues that a rise in the defense expenses stimulates demand, boosting purchasing power and aggregate output, and generating positive externalities. In their study Dunne and Tian (2016) , it was noted that there was no theoretical basis to guide the experimental analysis. Though, the Keynesian consumption theory reveals that defense spending may stimulate growth through positive spill-over effects. However, such kind of theoretical prediction based on the Keynesian model is less clear.

2.2. Empirical studies on the impact of military spending on economic growth

Despite the voluminous empirical studies on the military-growth connection, the empirical findings are still inconclusive 6 . The discussion in the present literature on the influence of military spending opened with the seminal work of Benoit (1978) which opined that military spending and growth have a positive correlation. Afterward, many studies are continuously performed to empirically verify the relationship between these variables by using different models, estimation techniques, set of countries, and data period. Several other studies support the positive effect of defense spending including Atesoglu (2002) , who observed that there exists a significantly positive association in military outlays and aggregate output in the case of the United States from 1947:2–2000:2. The empirical analysis of the study by Yildirim et al. (2005) found that military spending boosts national income in the Middle Eastern countries and Turkey over 1989–99. Narayan and Singh (2007) empirically verified that defense expenses Granger causes exports, and exports Granger causes national income (GDP), indicating that defense spending indirectly Granger causes national income in the short-run for Fiji over 1970–01. According to Borch and Wallace (2010) , higher levels of military expenditure are better prepared to stave off the harmful influences of an economic slump than states with lower levels of military spending in the 49 U.S. states during 1977–04. Malizard (2010) observed two-way causality between military spending and growth in France during 1960–08. Findings of Farzanegan (2014) study supported the positive impact of the military outlay on growth in Iran during 1959–07. Khalid and Noor (2018) concluded that military spending has a positive relationship with growth in sixty-seven developing economies during 2002–10.

On the other hand, some prior studies, for example, Faini et al. (1984) detected that a greater military burden is related to sluggish growth for 69 countries during 1952–70, whereas a rise of 10% military spending leads to a decrease of annual economic growth by 0.13%. Deger (1986) revealed that overall the direct and indirect effects of military expenditure will dampen growth rate and impede development in a panel of 50 developing economies during 1965–73. The author suggested that empirical indication goes against the conclusions of Benoit and others about the positive impact of military outlay on growth in less-developed economies. Abu-Bader and Abu-Qarm (2003) found that military expenditure hampers economic growth, but civilian expenses have a positive impact on growth for Egypt, Israel, and Syria (1975–98), (1967–98), and (1973–98) respectively. The empirical findings of Klein (2004) reveal that overall the military outlay has a negative influence on the growth rate of Peru over 1970–96. Chang et al. (2011) found that military expenditure leads to deleterious growth for low-income countries in the whole sample of 90 countries during 1992–06. D'Agostino et al. (2017) observed a significantly negative effect of military spending on growth in 83 countries from OECD over 1970–14. Saba and Ngepah (2019) examined the causal link between military spending and economic growth for 35 African countries over 1990–15. The authors found that (i) no causal link in seven countries; (ii) one-way causality from military spending to growth in two countries; (iii) one-way link from growth one-way in 14 countries; and (iv) two-ways link in 12 countries. Overall, the GMM estimates reveal that military spending has a significant negative effect on economic growth in Africa.

Similarly, other studies provide evidence of mixed results on the economic effects of military expenses on growth, for example, the study of Frederiksen and Looney (1982) divided the economies into financial resource restrained and unrestrained groups over 1960–78. The findings revealed that enhanced military expenditures promoted growth in the unrestrained group, but a small visible impact was found in resource-constrained countries. In a study on three North American countries namely Canada, Mexico, and the U.S. during 1963–05, Bremmer and Kesselring (2007) found that enhanced military expenditure promotes nominal GDP in Canada and Mexico, while it declines the growth in nominal GDP in the U.S. Aye et al. (2014) observed no Granger causal association between military outlay and growth for South Africa during 1951–10. However, by using the bootstrap rolling window estimation approach, the study finds two ways Granger causality in different subsamples. The results of Chang et al. (2014) supported the neutrality hypothesis for France, Germany, and Italy, while, the military expenditure–growth hampering hypothesis for Canada and the UK, and unidirectional Granger causality running from national income to military outlay for China. Moreover, the results supported the feedback 7 between military spending and national income in the case of Japan and the U.S. over 1988–10. Using the “Hendry General-to-Specific modeling” methodology, the study of Abdel-Khalek et al. (2019) fails to find any causal linkages between military spending and economic growth in India over 1980–16. Some more related empirical studies are given in Table 1 .

Table 1

Selected prior studies on the association between Milex and aggregate output.

The existing empirical studies have shown that, although it is a subject of concentration for many researchers, economists, and policymakers, there is still no harmony in the literature on the economic impact of military spending on economic growth.

3. Empirical methodology

3.1. model specification.

Based on the existing literature on the growth theories, the present study specified a growth equation introduced by Solow (1956 ; 1957) , also used by Mankiw et al. (1992) , Barro et al. (1995) , and Barro (2003) where inputs namely physical and human capital together produce aggregate production. The Solow model encompasses four inputs, namely, output ( Y ), capital ( K ), labor ( L ), and “knowledge” or the “effectiveness of labor” ( A ), and t denotes time. The economy produces output with a combination of certain amounts of labor, capital, and knowledge. The model can be written in mathematical form as follows:

I specify the empirical model by incorporating military spending in the growth equation following the existing literature including ( Dunne and Tian, 2015 ; D'Agostino 2017 , see for details on the empirical model). Thus, in this study, a multivariate probabilistic model, based on the augmented production function is used to validate empirically the impact of military spending as a percentage of GDP along with some other control variables, including human capital, physical capital, foreign remittances, and the level of development on economic growth proxied by GDP per capita growth rate. Similar growth models encompass military spending is also frequently used in erstwhile research studies, for instance by Antonakis (1997) , Dunne and Nikolaidou (2012) , Hou and Chen (2013) , Lobont et al. (2019) , Mohanty et al. (2020) . The multivariate regression equation used in this study can be expressed symbolically as follows;

In Eq. (2) α 1 , α 2 , α 3 , α 4 , and α 5 symbolizes the estimated coefficients, i and t indicates the i t h country and the t t h time period, respectively ( i = 1,2 , … , N = 35 ; t = 1,2 , … , T = 32 ) . Where G is the GDP per capita growth rate, M S represents military spending, I is an investment by gross capital formation, R M is personal remittances received, H K is human capital by total life expectancy at birth in years, P C I is GDP per capita at level represents the level of development, and ε is an error term, which shows effects of other variables not included in the model. It is assumed that the error term (ε t ) is to be independently and identically distributed ( ε t ∼ i i d ( 0 , σ 2 ) .

I hypothesized that in Eq. (2) , the impact of human capital, physical capital, and workers' remittances have a positive relationship with economic growth, and initial per capita income hurts economic growth, while the impact of military spending is determined in this study.

The unrestricted error correction for the ARDL model ( p , q , q , … … , q ) model by Pesaran et al. (1999: 623–24) is used as per the order of integration of the data and can be expressed symbolically as follows:

In Eq. (3) , the subscripts i and t show group (country) and period, respectively. So, the periods t = 1, 2,…… T (i.e., 1988–2019) and the groups (countries) i = 1,2,…., N (in this case N = 35). G i , t is the growth rate of GDP per capita (regressand); X i t ( k × 1 ) is the vector of explanatory variables (regressors), including military spending, investment, human capital, workers remittances, and initial per capita income, μ i denote the fixed effects; λ i j represents the coefficient of the lagged regressand; δ i j are k × 1 coefficient vectors (representing the coefficient of the lagged explanatory variables); and ε is an error term. T needs to be suitably large such that the model for each group (country) can be estimated separately.

Eq. (3) in reparameterized form can be used to accomplish the objectives of the study:

where, φ i = − ( 1 − ∑ j = 1 p λ i , j ) , β i = ∑ j = 0 q δ i , j .

In Eq. (4) , φ is the coefficient of the speed of adjustment in the long-run equilibrium.

3.2. Data and it sources

Annual cross-sectional balanced panel data from 1988 to 2019 is used. Though we intend to use longer period data, consistent balanced data were available for only 32 years. The growth rate of GDP per capita is used as regressand, and the regressors are military expenditure as % of GDP, worker remittances are personal remittances, received (current US$), GDP per capita (current US$), gross capital formation, and total life expectancy at birth (years). The data initially were in US$ and converted to GDP ratio except for GDP per capita. Data on all variables are extracted from the World Development Indicators ( WDI, 2020 ), the World Bank.

3.3. Estimation strategy

3.3.1. panel unit root tests (purts).

Before the formal empirical exploration of the panel data, it is essential to have an understanding of the integrating properties of the data. Therefore, this research work employed PURTs i.e., Levin et al. (2002) (LLC), Fisher-ADF, and Fisher-PP tests by Maddala and Wu (1999) and Choi (2001) ; and Im et al. (2003) (IPS).

3.3.2. The autoregressive distributed lag (ARDL)/pooled mean group (P.M.G.)

Pesaran and Shin (1999) introduced the Autoregressive Distributed lag (ARDL) model in error correction form as a comparatively innovative cointegration test. Pesaran and Shin (1999) claim that the panel ARDL can be employed for variables even with dissimilar order of integration i.e. either in case of I ( 0 ) or I ( 1 ) . The ARDL model, in particular, the P.M.G. provides reliable coefficients despite the potential existence of endogeneity, as it comprises lags of regressand and regressors ( Pesaran et al., 1999 ). This study, therefore, uses the panel ARDL approach to explore the long-run equilibrium association of the elemental variables and the P.M.G. model to assess the impact of defense spending on economic growth. The error correction model provides information regarding the long-run demeanor of the parameters of the model. This approach has the advantage that it uses a single condensed form equation, compared with the other cointegration approach, so that endogeneity is not a major problem as it is free from the residual relationship. Likewise, the ARDL neglects the specification of the exogenous and endogenous variables required to be incorporated into the model. It also uses optimal lags for the elemental variables that cannot be used in standard cointegration tests ( Guei, 2019 ). This method is also employed by D'Agostino et al. (2017) for investigating the long-run equilibrium linkage between military expenditure and growth in 83 OECD countries.

3.3.3. The robust least squares (RLS), fixed-effect and Dumitrescu and Hurlin

The robust least squares estimators are applied because the outliers in the data can have a severe effect on regression results. Usually, the most commonly used method, including the traditional least squares method (OLS) for data analysis, overlooks the issue of outliers ( Barnett and Lewis 1978 ; Belsley et al., 1980 ). Robust regression is an alternate solution to overcome this problem, which provides robust results ( Huber, 1973 ). M-estimation is a broadly used method for robust statistical results. The setting of M-estimation is logically advantageous to penalization to standardize parameters, and it is generally employed to perform robust estimation and variable selection ( Owen, 2007 ). Many prior studies such as Wilcox and Keselman (2012) , and Pitselis (2013) documented that the M-estimation of R.L.S. method gives large advantages over the least-squares method.

This study also employed the fixed-effect estimator suggests by the Hausman (1978) test over the random-effect as the p-value (0.0279) is statistically significant (see Table 6 ). To deal with endogeneity bias is offered by the fixed-effect analytic approach, which necessitates multilevel data/panel data ( Allison, 2009 ). The method of fixed-effect is a very flexible approach to adjusting for endogeneity originating from omitted variable bias. The predominant purpose of the fixed-effect method is to eliminate all bias that is due to the association of encompassed variables with omitted time-invariant variables ( Wooldridge, 2009 ; Stone and Rose, 2011 ). The fixed-effect estimator is also implemented by Knight et al. (1996) Dunne and Nikolaidou (2012) , Azam and Feng (2017) , and Dunne et al. (2019) in related studies. Also, the commonly used heterogeneous test by Dumitrescu and Hurlin  ( 2012 ) which is a simple non-causality test in heterogeneous panel data models developed by Granger (1969) is employed to find the direction of causality between the variables.

Table 6

Robust least squares, and fixed-effect estimates.

Method: M-estimation M settings: weight = Bisquare, tuning = 4.685, scale = MAD (median centered).

Huber Type I Standard Errors & Covariance .

Note: a, b, and c denotes 1%, 5%, and 10% level of significance respectively.

4. Results and discussions

Table 2 provides a summary of the descriptive statistics of balanced panel data set containing 35 non-OECD countries over the period of 1988–19. The results of the pair-wise correlation between the series are also given in Table 2 . These results reveal that all the variables are normally distributed whereas the error term is having zero mean and finite variance indicated by Jarque-Bera's statistic. The pair-wise correlation results expose that military spending and per capita income is negatively correlated with economic growth, while a positive correlation exists between physical capital and economic growth, and the same is true for human capital and foreign remittances. The correlation analysis suggests no evidence of multicollinearity between the series.

Table 2

Summary statistics and correlation matrix.

Note: p-values are in ( ).

Before checking stationarity properties of selected variables namely military spending, physical capital, human capital, per capita income, foreign remittances, and economic growth, this study first implements Pesaran's (2004) tests to check the cross-sectional dependence in panel data. To avoid the problem of cross-sectional dependence may lead to partial results. The cross-sectional dependence test results are reported in Table 3 . These results reveal solid evidence to discard the null hypothesis of cross-sectional dependence as the relevant p-values are statistically significant. These results endorse the existence of cross-sectional dependence for military spending, physical capital, human capital, per capita income, foreign remittances, and economic growth.

Table 3

Results of CD cross-sectional dependence tests.

Note: Null hypothesis: No cross-section dependence. d.f. = 595. Alll tests shows that all included variables are signficant at the 1% level of significance.

A summary of the results of PURTs is given in Table 4 . The panel unit root results demonstrate that the growth rate of GDP per capita, military spending, human capital, investment, and workers remittances are stationary at the level, while and PCI proxied by GDP per capita are found non-stationary at the level and became stationary after its first difference with individual constant and trend in a panel. PURTs results suggest that all variables used in the study are mixed in order of integration i.e. integrated at I ( 0 ) and I ( 1 ) in each panel. Thus, I implement the ARDL/P.M.G. methods for empirical estimation purposes. For the sake of robustness, this study also employed the methods of robust least squares and fixed-effect.

Table 4

Summary of PURTs results.

Note: The unit root tests are carried out with a specification of constant and time trend. Where, asterisk a indicates statistical significant at the 1% level of significance. C shows Constant, and T show Trend.

Based on the PURTs results, this study first implements the pooled mean group technique for exploring the long-run equilibrium association between variables. Empirical estimations of both the long-run and short-run parameters that link military spending, human capital, remittances, the initial level of development, and national income (economic growth) by employing the PMG method are reported in Table 5 . It is evident from Table 5 that all empirically evaluated explanatory variables have considerable effects on the economic growth of the 35 non-OECD economies. The P.M.G. results reveal that all regressors are statistically significant individually, thus, validating and signifying that the estimated model is theoretically and statistically acceptable. All the regressors carry the probable coefficient signs.

Table 5

Pooled Mean Group results.

Note: Regressor is GDP per capita growth rate.

Asterisk a, denotes 1% level of significance.

ECM = Error crrection coefficient . Model selection method: AIC.

Results given in Table 5 reveal that military spending ( M S ) has an inverse effect on the national income ( G ) in the long-run. I obtained impartially robust empirical results on the negative impact of defense spending and economic growth in the long-run. Results favor the likely adverse effect of military spending on growth. In the long-run, the estimated coefficient of -0.3223 is estimated for the military spending variable, which is significant statistically at the 1% level. Empirical results indicating that a 1% upsurge in military expenditure will dampen economic growth by 0.3223%. Similar results are also obtained by Dunne and Nikolaidou (2012) using panel data for 15 countries from the EU over 1961–07. The findings of this study are consistent with the study carried out by Knight et al. (1996) , Hou and Chen (2013) , and D'Agostino et al. (2017) , and Saba and Ngepah (2019) . While, our results are in contrast with the findings of Narayan and Singh (2007) , Feridun et al. (2011) , Farzanegan (2014) , Sheikh et al. (2017) , and Lobont et al. (2019) , as these studies yield positive relationship between military expenditures and economic growth, also quite consistent with the illustration of the Keynesian school of thought. Mostly military expenditure is unproductive in developing countries. Developing countries face multiple challenges and need to focus on promoting economic growth and thereby social welfares. After achieving the desired level of economic growth, these countries may opt for military spending. Countries spending on the military are in loss unless they export armaments to other countries and increase their foreign exchange.

It is evident from Table 5 , that the impact of workers' remittances ( R M ) on economic growth is significantly positive at a 1 percent level. The estimated coefficient found is 0.0916 in the long run, signifying that a 1% upsurge in workers' remittances flow leads to a 0.0916% upsurge in economic growth. The positive and statistically significant correlation between remittances and growth was also acquired by Azam (2015 ; 2016) .

Investment ( I ) represented by gross capital formation is included in the regression model, which is one of the fundamental inputs for production. Table 5 indicates that the investment variable is positively associated with economic growth in the long run. The estimated coefficient value is 0.1195 and significant at the 1% level in the long-run. This result infers that an upsurge of 1% in investment leads to an enlargement in the national growth rate by 0.1195 % in the long-run. This finding is consistent with the results obtained by Azam (2016) , and Mohanty et al. (2020) .

Human capital ( H K ) is a key element of the production function; so, human capital by total life expectancy in a year is included in the regression model. The P.M.G. results exhibit that human capital has a positive impact on economic growth in the long-run. The estimated coefficient for human capital found is 0.0283 and significant at the 1% level in the long-run. Empirical estimates exhibit that one unit change in the human capital will promote economic growth by 0.0283%. The results of the encouraging connection between human capital and growth show that investment in human health has a momentous and valuable impact by a growing lifespan, thus, growing output and hence, economic development. The significantly positive effect of human capital on growth is consistent with the study conducted by Karim and Amin (2018) , and Azam (2020) .

Initial GDP per capita represents the level of development that has a negative association with the growth and significant statistically at the 1 percent level. The estimated coefficient for the initial level of development is -0.0005 in the long-run. The negative result of the coefficient on the initial level of development variable, the GDP per capita at the start of each year, shows the conditional convergence effect. The estimated speed of conditional convergence is around 0.0005% per year. The significantly negative impact on initial GDP per capita on the growth was also explored by Hou and Chen (2013) .

The robust least squares and fixed-effect estimators’ results are given in Table 6 confirms that military spending has a detrimental impact on the growth in 35 non-OECD countries. Whereas workers' remittances, physical and human capital have a positive effect on national income, and initial GDP per capita harms growth. There is no indication of any positive impact of military spending on economic growth. All estimated coefficients are statistically significant and strongly support the empirical results of the P.M.G. approach. Non-OECD countries are mostly developing countries if compared to developed countries. The developed world often can allocate resources of their national budget to military spending. Whereas most developing economies including non-OECD countries suffer from high levels of poverty, and allocation of their resources to military spending may further contribute to poverty. Comparing the empirical results of this study with many including Saba et al. (2019) , I conclude that military expenditure in non-OECD does not stimulate economic growth.

Moreover, the commonly used heterogeneous test by Dumitrescu and Hurlin (2012) is used to explore the causal linkages between the variables. The Dumitrescu and Hurlin test allows for heterogeneity through cross-sections, and the results are presented in Table 7 . The results reveal that there exists a statistically significant bidirectional causality between military spending and economic growth. It is evident from Table 7 that most of the results show the existence of causality between variables which are also statistically significant. The Dumitrescu − Hurlin Granger causality results suggest a feedback link between military spending and growth. The empirical finding of a feedback link indicates that neither of these two variables can be measured exogenous. These results are consistent with the findings accrued by Frederiksen (1989) , and Lobont et al. (2019) , while inconsistent with the findings of Abdel-Khalek et al. (2019) .

Table 7

Results of Dumitrescu Hurlin panel causality tests.

Null hypothesis: no causality; top values represents W-Stat; Zbar-Stat are in ( ); p-values are in [ ]. Lag: 2.

Asterisk a, b, c indicates statistical significant at the 1%, 5 % and 10% level respectively.

Thus, overall, the PMG, RLS, fixed-effect, and Dumitrescu-Hurlin panel causality tests results reveal that military spending does not have any positive impact on military spending in non-OECD countries, while it has a significant negative effect on the economies. These theoretically, technically, and statistically sound empirical results are plausible for policy formation.

5. Concluding remarks

Several empirical studies are available on the relationship between military spending and economic growth, but their empirical findings are yet inconclusive. Undeniably, the economic effect of military expenditure is an essential issue for the developing world. Therefore, this research work aims to determine empirically the impact of military expenditure along with some other control variables on the growth, for a set of thirty-five countries from non-OECD over 1988–19. According to the nature of the data, the widely used panel unit tests are employed to check the order of integration of each variable. The results are found mixed (i.e., I(0), and I(1)) based on stationarity, and thus, the panel ARDL/PMG approach is applied. Afterward, the panel robust least squares and fixed-effect estimators are also employed as analytical techniques for parameters’ estimation to affirm the results, and the Dumitrescu –Hurlin Granger causality test is employed to find the direction of causality between the variables.

The empirical results of all the methods suggest that military spending and economic growth have a strong inverse relationship, suggesting that encouraging military expenditure is not a good option because it discourages economic growth. Moreover, the Dumitrescu–Hurlin Granger causality test exposes bidirectional causal nexus between military expenses and economic growth in the sample countries. The bidirectional causal linkage between military spending and growth though exhibits a degree of interdependence between military spending and economic growth policy objectives. Thus, the execution of economic growth policies should not be given more primacy over the military burden while other than military expenditure factors shall be considered.

Overall, the empirical results validated that military spending is undesirable for national economic development. The results of the significantly negative effect of military spending on national income go against the results obtained by Benoit (1978) , and others who claim that military expenditure positively contributes to the aggregate output, while, consistent with the findings by Dunne and Tian (2015) for 106 countries over 1988–10, Dunne and Tian concluded that “These results do seem to provide valuable robustness checks and support strongly the view that military spending hurts growth” (p.29). The findings of the present study are technically and statistically acceptable and plausible for frontwards policy recommendation purposes.

From these findings, the unequivocal negative effect of military spending on economic growth indicates that non-OECD countries are developing countries with scarce resources, and these economies can't afford military spending, while when these economies grow, governments can contemplate rising its military spending to strengthen its military power. Enlarged military spending can't be used to boost economic growth in the non-OECD countries, since any positive impacts it would have on the economic growth through augmented demand, modernization, and resource outset, would have overwhelmed by the damaging effects on economic growth through reduced investment. Policymakers should thus leave military spending for security objectives only and restructuring public resources from the military sector toward civilian objectives 11 . Likewise, policymakers should focus on rationalizing their budget spending more on improving social welfare. Furthermore, incremental efforts are required to adopt an effective and prudent policy to further encourage growth, while shrinkage in military spending can largely benefit the economies. Therefore, military expenditures need to be reduced while expenditures on other developmental sectors including health and education sectors to be increased.

The limitation of this study is that it deals only with a panel of 35 non-OECD countries over the period of 1988–19, as consistent and balanced data were only available on this period on selected variables.

It is suggested for future research to divide the non-OECD countries based on the levels of military spending, re-run regression on non-OECD and OECD countries separately, and compare their empirical findings which will certainly help the management authorities. Moreover, the turning point/threshold effect of military spending shall be empirically evaluated. Perhaps, it will need advanced econometric techniques to come up with a meaningful investigation.

Declarations

Author contribution statement.

Muhammad Azam: Conceived and designed the analysis; Analyzed and interpreted the data; Contributed analysis tools or data; Wrote the paper.

Funding statement

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Data availability statement

Declaration of interests statement.

The authors declare no conflict of interest.

Additional information

No additional information is available for this paper.

1 Looney and Frederiksen (1986) .

2 Knight et al. (1996) .

3 SIPRI (2020) .

4 Countries included are Belize, Bolivia, Brazil, Colombia, Ecuador, El Salvador, Guatemala, Jamaica, Paraguay, Botswana, Burkina Faso, Cameroon,Ethiopia, Ghana, Kenya, Lesotho, Mali, Nigeria, Rwanda, Senegal, Eswatini (Swaziland), Egypt, Arab Rep., Jordan, Tunisia, Morocco, Bangladesh, India, Sri Lanka, Pakistan, China, Fiji, Indonesia, Philippines, Papua New Guinea, and Thailand.

5 D'Agostino et al. (2010).

6 See Dunne and Nikolaidou (2012) .

7 It means two-way Granger causal connection between military expenditure and economic growth.

8 For China and Pakistan (1989–17), for India (1980–17).

9 Austria, Belgium, Cyprus, Denmark, Finland, Greece, Germany, Italy, Luxemburg, Portugal, Turkey, Spain, Sweden the Netherlands and UK.

10 The results confirm the hypothesized positive relationship between defense and growth in the unconstrained group, but was not confirmed for the constrained group. where the study hypothesize that a negative relationship will exist between defense and economic growth in countries which are financially resource constrained, and a positive relationship will exist in countries which are relatively resource unconstrained.

11 See Antonakis (1997) .

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• TeachableMoment

Should U.S. Military Spending Rise?

Students explore the debate over the U.S.'s rising military budget and where young people stand on the issue.

Introduction  

Ask students if they’ve heard any news in recent months about the U.S. military budget. If they haven’t heard about it, ask them why they think that is.  Ask:

• Is the level of U.S. military spending an important issue? Why or why not?
• What are a few things you know about U.S. military spending in general?

Share with students that the U.S. government is considering President Biden’s proposal for an increase in the U.S. military budget in 2022 – and there is much debate about this plan.

Today we’ll read about and discuss what is happening with the U.S. military budget, arguments for and against increasing it, and what some young people are saying and doing about it.

Reading One The U.S. Military Budget Continues Its Historic Ascent  

pdf version  

This year, the United States military budget is on course to reach historic highs, continuing a long trend of budget increases backed by both Democrats and Republicans.

President Biden’s proposed budget for the Department of Defense in 2022 is $715 billion, representing an increase of approximately $10 billion over last year’s budget – despite Biden’s move to wind down the U.S. war in Afghanistan. This spending figure does not include funds for Veterans Affairs, management of the country’s nuclear weapons, or other military spending – costs  that bring the total to well over $1 trillion.

Rep. Pramila Jayapal (D-Wash.), who chairs the Congressional Progressive Caucus, challenged Biden’s proposed hike in military spending: “We’re in the midst of a crisis that has left millions of families unable to afford food, rent, and bills,” she said. “But at the same time, we’re dumping billions of dollars into a bloated Pentagon budget. Don’t increase defense spending. Cut it—and invest that money into our communities.”

Critics have often pointed out that the massive sums going to the military dwarf most other areas of federal spending. They argue that if some of this money were redirected it could have a major impact in addressing social problems. A 2020 report by the Institute of Policy Studies found that money from even a 10 percent cut to the military budget could end homelessness in the U.S., create more than a million jobs, fund free college educations for over 2 million low-income students, and much more.

Robert Reich, an economist and former Secretary of Labor, is one of the many voices who has criticized the country’s tradition of military budget increases. Reich’s views were detailed in an April 13, 2021, article by John Nichols, a national affairs correspondent for The Nation. Nichols wrote :

“The Pentagon already spends: $740,000,000,000 every year, $2,000,000,000 every day, $1,000,000 every minute,” says the former secretary of labor [Robert Reich]. “The last thing we need is a bigger military budget.” Unfortunately, that’s what the president is seeking. This has led Reich to announce that he is “frankly disappointed that Biden’s proposing $715 billion for the Pentagon—an increase over Trump’s $704 billion defense budget—instead of moving back toward Obama-Biden era levels of defense spending, or less.” “Or less” is the right direction, especially at a moment when Republican deficit hawks are circling in preparation for attacks on domestic spending that is essential for working families who have been battered by the coronavirus pandemic…. Congressional Progressive Caucus chair Pramila Jayapal (D-Wash.) is blunter: “We’re in the midst of a crisis that has left millions of families unable to afford food, rent, and bills. But at the same time, we’re dumping billions of dollars into a bloated Pentagon budget. Don’t increase defense spending. Cut it—and invest that money into our communities.” That’s not a radical response. When Data for Progress surveyed voters nationwide last year about budget priorities, 56 percent supported cutting the Pentagon budget by 10 percent to pay for fighting the coronavirus pandemic and funding education, healthcare, and housing. Sixty-nine percent of Democrats expressed enthusiasm for the proposed cut, which was striking. Even more striking was the 51 percent support it got from Republicans. https://www.thenation.com/article/politics/biden-military-budget/

Of course, there are many Americans who support growing the military budget. Some experts argue that the U.S. military presence in bases throughout the world helps to lend stability to the global economy and protect U.S. interests. The current budget is designed, in part, to develop the United States military into a force capable of preventing the further rise of China. In fact, Hal Brands, professor of international affairs at John Hopkins University, argued in a June 6, 2021, article for Bloomberg.com that Biden’s proposed budget is too small and does not do enough to address this challenge. The budget, he wrote :

… continues a trend, established under the Trump administration, of reorienting American defense strategy toward the threat posed by hostile great powers but then underfunding the investments and reforms needed to implement that strategy…. This wouldn’t matter so much if the U.S. still had the luxury of treating China as a problem on the distant horizon. But that’s no longer the case. The indications are mounting that a moment of real military danger — the point at which Chinese President Xi Jinping might be willing to attack Taiwan or otherwise assault the regional status quo even at the risk of a showdown with Washington — could arrive in 2025, rather than the generally held previous estimate of 2035. There is, then, something incongruous about a situation in which high-ranking military officials publicly warn that the U.S. could face an incredibly daunting conflict with China in the Taiwan Strait just a few years from now, and the administration then takes a steady-as-she-goes approach to defense spending. https://www.bloomberg.com/opinion/articles/2021-06-07/the-pentagon-s-flatlining-budget-is-good-news-for-china

Critics of military spending have responded by arguing that defense hawks have perennially discovered new threats to justify ever-increasing budgets, even in times like the pandemic, when other needs are profound. Moreover, in an April 7, 2021, commentary in the New York Times, journalist Peter Beinart pointed out:

[China] spends less than one-third as much on defense as the United States does and has fewer than one-tenth as many nuclear weapons. China’s military could indeed be a match for the United States in conflicts near China’s shores, but globally, China poses a far greater economic challenge. To meet it, the United States must invest enormously in education and emerging technologies — the very investments that military spending will sooner or later crowd out. https://www.nytimes.com/2021/04/07/opinion/biden-defense-budget.html  

Given that it represents one of the largest areas of federal government spending, the size and trajectory of the military budget is critical in determining the nation’s priorities in coming years.

For Discussion:  

• How much of the material in this reading was new to you, and how much was already familiar? Do you have any questions about what you read?
• According to the reading, what are some of the things that could be funded with even a modest cut to the military budget?
• Why do some experts, such as professor Hal Brands, believe that the military budget should be even higher than it is now? What do you think about this argument?
• How do you feel about the current military budget and the priorities it reflects? Do you support this allocation of resources, or do you believe that the money might be better used for other purposes?  

Reading Two Youth and the Military

pdf version In recent years, the peace movement has not drawn much attention in the United States.

But some young people are organizing to change that.

A new youth-led organization called Dissenters aims to bring the perspective of a new generation to anti-war activism, making connections between militarism and issues such as police violence and healthcare reform.

In a January 24, 2020, article for Brandeis University’s weekly newspaper The Hoot , Polina Potochevska interviewed a co-founder of the Dissenters chapter at Brandeis, Sarah Arthi Jacob. The organization, Jacob said, was launched by “seasoned organizers of color from across the country who work in prison abolition, anti-policing efforts and anti-occupation activism.”

Jacob said the movement aims to unite strategies and values into “a cohesive movement to stop ‘endless war’ and militarism which first and foremost affects communities of color in the U.S. and around the world.” Jacob noted efforts by students on campuses across the country to push universities to divest from the military industry, including companies such as Lockheed Martin, Northrop Grumman, Raytheon, General Dynamics and Boeing.

While Dissenters is pushing for the government to reallocate funds from the military in ways that can aid local communities across the country, other students are debating whether Junior Reserve Officers' Training Corps (JROTC) should be welcome in high schools.

JROTC, a counterpart to the military’s program to provide officer training for college students, focuses on recruiting and preparing high school students for military service. Critics see the program as a manipulative initiative that primarily targets poorer school districts and students of color.

Some students who have participated in JROTC report enjoying the program and feeling it was a means of personal development. In a June 4, 2021 article on Chalkbeat.com, a nonprofit news organization focused on reporting on urban school districts, independent journalist Alex Ruppenthal reported on some responses from Chicago students who were placed in JROTC courses in their schools.

Brianna Gordon, a former JROTC student who enrolled in the program at Chicago Vocational High School in Avalon Park, said it was an easy class that involved exercise challenges, drill team competitions, and wearing military-issued uniforms once a week. “I had a very, very bad attitude, and with them being very understanding and very strict, I learned how to control my attitude a lot,” said Gordon.

While some young people report positive experiences, a range of students, parents, and educators have criticized JROTC programs—particularly those programs that do not give students a choice in advance about whether to enroll.

Natasha Erskine, a former JROTC participant and U.S. Air Force veteran turned anti-war activist, told Chalkbeat that “the concentration of JROTC programs in predominantly Black and Latino schools raises similar concerns as the over-policing of students of color, an issue that has come under renewed scrutiny over the past year.”

Such criticisms have a long history. Veterans for Peace, an organization created by former members of the armed forces to promote alternatives to war and military spending, passed a resolution in 2003 condemning JROTC. The resolution contended that “The purpose of JROTC and military recruitment in our schools is the exploitation of children by adults for the purposes of violence” and that the program conditions young people to “unquestionably accept the nobility of war and the correctness and virtue of killing as a solution to problems[.]”

• How much of the material in this reading was new to you, and how much was already familiar? Do you have any questions about what you read?  
• What did you think about the viewpoint of Dissenters? How might this group’s approach to confronting militarism be different from that of activists in previous generations?  
• According to the reading, what are some of the arguments made for and against the JROTC program? What arguments seem most compelling to you?  
• What do the Dissenters and those opposing JROTC have in common?  
• Given the size of the U.S. military budget, why do you think most of us hear so little about it?

Extension Activity

Ask students to write a well-researched essay that argues for either increasing or decreasing the U.S. military budget.

Research assistance provided by Akin Olla.

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Home — Essay Samples — Science — NASA — NASA’s Budget vs. Military Spending: Is it Justified?

NASA's Budget Vs. Military Spending: is It Justified?

• Categories: NASA

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Words: 2046 |

11 min read

Published: Aug 30, 2022

Words: 2046 | Pages: 4 | 11 min read

Bibliography

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• Opam, K. (2011). Air Conditioning the Military Costs More Than NASA’s Entire Budget. [online] Gizmodo.com. Available at: https://gizmodo.com/air-conditioning-the-military-costs-more-than-nasas-ent-5813257 [Accessed 12 May 2019]
• Siegel, E. (2017). 5 incredible advances science could buy with the government’s $600B military budget. [online] Forbes.com. Available at: https://www.forbes.com/sites/startswithabang/2017/11/01/5-incredible-advances-science-could-buy-with-the-governments-600b-military-budget/#3c6d3c3b902f [Accessed 12 May 2019]
• Spacex.com. (2017). Making life multiplanetary. [online] Available at: https://www.spacex.com/dragon [Accessed 12 May 2019]
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• Essay on War

Example Of Why We Should Increase Military Spending Argumentative Essay

Type of paper: Argumentative Essay

Topic: War , Drones , Politics , Technology , Afghanistan , Military , Middle East , Violence

Published: 02/12/2020

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In the wake of 9/11, many new military advancements were created in order to fight a brand new enemy: extremist terrorist groups. Terrorism is defined as “premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents” (Jordan, p. 267). Instead of country fighting against country, the adversaries the American military face are smaller, splintered, and not affiliated with any specific government. They fight for an ideal, not for land, and the governing bodies of the countries in which they reside have no official political or economic ties with them. As a result, it is far easier for them to hide, making traditional military methods ineffective. Because of the need to find new ways to combat terrorism, military spending in the United States should be increased. According to John McCain, Joe Lieberman, and Lindsey Graham, "What happens in Afghanistan directly affects our safety here at home" (McCain et al., 2012). Abandoning the state will have similar, disastrous consequences for our national security. Our military must remain in Afghanistan, otherwise it gives the Taliban and al-Qaeda more political ammunition to strike back at the US years down the road. These senators and members of the Armed Forced Committee believe wholeheartedly that military action should remain in Afghanistan, due to the veiled threat of retaliation should we leave. To that end, the US military should remain funded as best we can. The US campaign of Afghanistan in 2001 was the first showcase of this new military, consisting of small land forces (often infantry and armored forces) acting in conjunction with unmanned drones, which became their eyes and ears (Jordan, p. 68). The toppling of Iraq used the exact same military strategy, and was successful in effecting a government change within a single day (Bolt et al., 2008). Another attribute of this new paradigm of military action was the formation of a coalition of nations which would provide military and intelligence assistance however possible. In the case of Afghanistan, Uzbekistan and Kyrgyzstan became staging areas for US air assets, as temporary bases were formed there (Jordan, p. 68). From these points, friendly forces could then act on potential threats from miles away. This change in organization made warfare safer, as military leadership is kept as far away from the fight as possible, leaving infantry as the only real physical presence in the battlefield. The advent of robotic drone technology has completely revolutionized the way in which warfare is conducted. These small, agile, technologically advanced drones have the ability to fly high overhead, travel long distances, provide accurate surveillance from hundreds of feet in the air, and even occasionally carry weapons. Advancements in wireless technology have made it incredibly easy to communicate with troops across vast distances, and unmanned drones can provide real-time support to any friendly presence. This transformation is somewhat necessary in order to create a battlefield that is devoid of friendly casualties. The more we find we can use automated weapons and long-shot artillery to attack our enemies from a distance, the fewer troops we can put in harm’s way. This should be the primary goal of a revolution in military affairs, therefore it is entirely required that we do whatever we can to emphasize (and fund) the use of drones and automated weaponry (Jordan, p. 326). It is becoming increasingly clear that the presence of the human individual in a military campaign is becoming obsolete, with the use of drones and AC-130 gunships, all of whom can tactically and surgically take out enemies from further away than they can reach. They also provide needed intelligence, which is a vital component of military action, and therefore an important part of this new Revolution of Military Affairs. What’s more, a greater proportion of troops can be allotted to domestic defense, where an automated surgical strike is less feasible, due to its likelihood of creating domestic civilian casualties. At the same time, drone technology is expensive and time-consuming to create and maintain; this requires funding to pay for the drones themselves and the personnel to complement and repair them. In conclusion, due to the need for an emphasis on more nontraditional warfare, military spending should continue as is (if not be increased, to allow for greater research into drone technology and effective ways to keep troops alive and accomplish objectives). While drones are beginning to change the way we wage war and gather intelligence on our enemies, they must be used in greater frequency and for a greater number of tasks. As much as we can, it is important to keep troops out of the fray as much as possible and rely more on these unmanned solutions. Increasing these capabilities will go a long way toward decreasing the number of casualties for American troops, as well as creating more efficient means of toppling potential threats to national security. At the same time, these changes must happen gradually, so as not to upset the already established order of military protocol, and ensure that these greater focuses on military technology are without flaws.

Bolt, Paul J. et al. (2008). American Defense Policy, Eighth Edition. Johns Hopkins University Press. ISBN-13: 978-0801880940. Jordan, Amos A. et al. (2009). American National Security, Sixth Edition. Johns Hopkins McCain, J., Lieberman, J. I., & Graham, L. "Sustaining success in Afghanistan." Washington Post. <http://www.washingtonpost.com/opinions/steps-to-ensure-we-achieve-success-in-afghanistan/2012/03/20/gIQAJiNXSS_story.html>.

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