Empirical Public Economics
Edited by Attiat F. Ott and Richard J. Cebula
Chapter 12: The Demand for Military Spending in Middle Eastern Countries and Turkey
Julide Yildirim, Selami Sezgin and Nadir Öcal 1 Introduction There is a great deal of empirical research on the economic effects of military spending and yet the determinants of military spending have not been fully investigated, especially for the Middle Eastern countries. The Middle East has been the most heavily militarized region of the world over the past half century. Even though a number of serious conﬂicts have existed among the Arab countries since their independence following World War II, they regard Israel as posing a common threat to all. Moreover, internal security concerns play an important role in determining the level of military expenditure in this region, as there has been internal civil unrest in Egypt, Bahrain, Saudi Arabia and Yemen. Moreover, most of the Middle Eastern countries have authoritarian regimes, which need armed forces for the political stability of the country. Among other studies assessing the economic impacts of defence spending is that of Lebovic and Ishaq (1987). The authors examined this issue for 20 Middle Eastern countries, in a framework of a Keynesian demand model for the time period 1973–82. They estimated a three-equation model employing panel data analysis and reported a negative effect of military expenditure on economic growth. Abu-Bader and Abu-Qarn (2003) investigate the causal relationship between military expenditure and economic growth for Egypt, Israel and Syria for the last three decades. They report that defence expenditures hinder economic growth for all three countries. Regarding the single country analysis of the military expenditure...
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