The Economic Effects of Military Expenditure in Third World Countries

Abstract

Three recent books by three experts on defence economics analyse the economic impact of military expenditure on economic growth and development in Less Developed Countries (LDCs). Saadet Deger's theoretical economic analysis betrays a strong bias against militarism and militarization in contemporary society. Nicole Ball presents a more general analysis, studying a large number of concrete cases, and taking their political and sociological characteristics into account. Both Deger and Ball see armament as a cause of underdevelopment. Robert Looney engages mainly in econometric analysis. He provides a comprehensive analysis of data from 77 LDCs, distinguishing between producers and non-producers of armaments. Looney's empirical results indicate that domestic political-bureaucratic influences are more important than international rivalries, and that the economic environment of arms producers differs significantly from that of non-producers. To us, however, these results seem unconvincing: data are incomplete, the econometric methods employed are very simple, and the theoretical background is weak. As regards economic analysis, Deger's study seems more rigorous, but its assumptions are heavily slanted in favour of the ideas of the peace research movement. Nicole Ball's analysis is the most interdisciplinary of the three, and also more empirical, historical and descriptive than the others. These three important books should be read by every specialist on defence problems. Their various approaches, their different perceptions of the economic impact of military expenditure and their different philosophical backgrounds provide a broader view of the economics of defence.

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