growth increases militarization

The results of the bootstrap panel Granger causality test are shown in Table 2. The findings show that GLOB and MIS are causally related in most of the countries under review. There is a bi-directional causality in UK, US, Saudi Arabia, and Russia. The causality is unidirectional running from GLOB to MIS in Australia, Brazil, India, and China, and running from MIS to GLOB in Turkey. The degree of significance level varies from country to country. There is no any causal relationship between military spending and globalization in France, Italy, South Korea, Germany, and Japan. Overall, this evidence shows a relatively robust association between changes in globalization and changes in military expenditure. In other words, countries experiencing greater globalization have relatively large increases in militarization over the past 20 years. However, it has been shown that globalization may not lead to more peaceful relations or demilitarization. As we discussed in Sect. 2, bilateral trade increases the opportunity cost of bilateral war and may hinder bilateral war. Globalization (equivalent to multilateral economic openness) reduces this opportunity cost with any given country and devitalize the incentive to make concessions during negotiations, and, therefore, increases the probability of war between any given pair of country. Thus, an increase in trade or openness between two countries may restore peace between those but may increase the probability of conflict with third countries.