Military spending decreases economic growth- comprehensive dataset proves

Lecturer of Economics, Ulster University, Belfast, Northern, Ireland; The Impact of Military Expenditures on Economic Growth: A New Instrumental Variables Approach; Defence and Peace Economics; https://doi.org/10.1080/10242694.2023.2259651

The regression analysis exploits panel data on 133 countries covering the time period of 1960-2012. The results from IV regressions suggest that a 1 percentage point increase in military expenditures as a percentage of GDP leads to approximately a 1.10 percentage points reduction in economic growth. This estimate of −1.10 is approximately 4 times larger in size than the estimate of −0.281 obtained from a fixed effect model that includes military expenditures as an exogenous variable. The statistically significant negative effect of military expenditures on economic growth is consistently observed in samples of developing, conflict-affected and below than average human rights performers countries.