Democracy's third wave and national defense spending
In: Public choice, Band 189, Heft 1-2, S. 183-212
ISSN: 1573-7101
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In: Public choice, Band 189, Heft 1-2, S. 183-212
ISSN: 1573-7101
I investigate how the third wave of democracy influenced national defense spending by using a panel of 110 countries for the period 1972-2013. I use new SIPRI data on military expenditure, which has been extended to years prior to 1988 and four democracy measures to address differences among democracy indices. The results from a dynamic panel data model suggest that democracy's third wave decreased defense spending relative to GDP by about 10% within countries that experienced democratization. This result does not show to be heterogeneous across world regions which the third wave reached in different sub-waves. I exploit the regional diffusion of democracy in the context of the third wave of democratizations as an instrumental variable (IV) for democracy in order to overcome endogeneity problems. The IV estimates indicate that democracy decreased national defense spending relative to GDP by about 20% within countries, demonstrating that OLS results underestimate the effect of democracy on national defense spending. The cumulative long-run effect of democratization resulting from the dynamics in defense spending is almost three times higher for both OLS and IV estimates.
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In: European Journal of Political Economy, Band 60, S. 101814
Scholars have estimated demand functions for national defense spending and investigated international arms trade for a long time. The relationship between supply and demand for military goods has, however, only been examined on aggregate level or in formal models yet. I investigate how the supply of military goods by arms-producing companies and the demand for military goods by both the national government and foreign governments are related by using a panel of up to 195 arms-producing companies in 21 countries for the period 2002-2016. The results show that if the demand for national defense spending increases by 1%, the arms sales by a country's largest arms-producing companies increase by up to 1.2%. If exports of major conventional weapons increase by 1%, sales increase by up to 0.2%. Arms imports do not affect domestic arms sales because imported and domestically produced arms are complements, and countries mainly import those arms they do not produce themselves. Country-specific estimation results suggest that differences among countries in geopolitical conditions and international relations determine whether a country's arms industry serves economic rather than security purposes.
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In: Defence & peace economics, S. 1-28
ISSN: 1476-8267
In: http://hdl.handle.net/2027/uc1.b2596984
"Die ganze Arbeit wird in der 'Zeitschrift für Politik' erscheinen." ; Diss.--Berlin, 1911. ; Includes bibliography. ; Mode of access: Internet.
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We provide evidence that political instability deteriorates economic growth. We establish this result based on panel difference-in-differences strategies and dynamic panel data models using a large sample of 180 countries, a novel geocoded dataset for 2,660 regions, and micro data for about 250,000 households. We exploit coups d'état as a source of exogenous variation in political instability, as they are difficult to anticipate, mirror the political zeitgeist, and reduce measurement error. We use spatial variations and synthetic control methods for identification and find that periods of instability reduce growth by 2-3 percentage points, increase unemployment, and impair health and life satisfaction. The adverse effects are stronger for women than for men.
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In: CESifo Working Paper No. 8317
SSRN
Working paper
Die politische Stabilität hat in den vergangenen Jahren in vielen Ländern abgenommen. Eine neue Studie untersucht, welche realwirtschaftlichen Effekte sich durch die zunehmende Instabilität ergeben. Die Ergebnisse zeigen, dass politische Instabilität das Wirtschaftswachstum reduziert.
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In: Defence and peace economics, Band 31, Heft 7, S. 743-761
ISSN: 1476-8267
Vereinbaren nationale Regierungen internationale Abkommen und Verträge, haben sie ein Selbstbindungsproblem: Sie sagen ihren Regierungspartnern aus anderen Ländern zu, dass sich ihr Heimatland in der Zukunft an heute vereinbarte internationale Abkommen und Verträge halten wird. Doch wissen die demokratisch gewählten Regierungen gar nicht, ob sie in Zukunft noch im Amt sind. Vielmehr könnten sie im Heimatland abgewählt werden, und die Nachfolgeregierung hält von den Vereinbarungen überhaupt nichts. Johannes Blum und Niklas Potrafke untersuchen in einer neuen Studie, ob Länder mit deutlichen Regierungswechseln das Zwei-Prozent-Ziel der NATO – d.h., 2% des Bruttoinlandsprodukts für Verteidigungsausgaben zu verwenden – weniger zielstrebig umsetzen als Länder, in denen es keine Regierungswechsel gab. Die Ergebnisse deuten darauf hin, dass sich neue Regierungen, die parteipolitisch besonders wenig mit der Vorgängerregierung zu tun hatten, mit geringerer Wahrscheinlichkeit an das Ziel halten, als Regierungen, die diesem Ziel zugestimmt hatten und danach noch einige Jahre im Amt waren. Regierungswechsel haben offenbar einen negativen Einfluss auf die Wachstumsraten der Verteidigungsausgaben. Internationale Vereinbarungen und Abkommen sollten deshalb so gestaltet sein, dass die Einhaltung auch nach Regierungswechseln noch anreizkompatibel ist.
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We examine whether changes of government influence compliance with international agreements. We investigate compliance with the NATO two percent target to which all NATO countries committed themselves during the NATO summit in Wales in 2014. The dataset includes the military expenditure by NATO countries over the period 2010-2018. The results suggest that countries that do not (yet) comply with the two percent target have smaller growth rates in military expenditure relative to GDP when they experienced a large change of government, e.g. a change from a rightwing to a leftwing government, than countries that did not experience such a large change of government since the NATO summit in 2014. Countries that experienced a large change of government are, thus, less likely to comply with the two percent target. Future research should examine the credibility problem of national governments in other international agreements too.
BASE
We examine whether changes of government influence compliance with international agreements. We investigate compliance with the NATO two percent target to which all NATO countries committed themselves during the NATO summit in Wales in 2014. The dataset includes the military expenditure by NATO countries over the period 2010–2018. The results suggest that countries that do not (yet) comply with the two percent target have smaller growth rates in military expenditure relative to GDP when they experienced a large change of government, e.g. a change from a rightwing to a leftwing government, than countries that did not experience such a large change of government since the NATO summit in 2014. Countries that experienced a large change of government are, thus, less likely to comply with the two percent target. Future research should examine the credibility problem of national governments in other international agreements too.
BASE
We examine whether changes of government influence compliance with international agreements. We investigate compliance with the NATO two percent target to which all NATO countries committed themselves during the NATO summit in Wales in 2014. The dataset includes the military expenditure by NATO countries over the period 2010–2018. The results suggest that countries that do not (yet) comply with the two percent target have smaller growth rates in military expenditure relative to GDP when they experienced a large change of government, e.g. a change from a rightwing to a leftwing government, than countries that did not experience such a large change of government since the NATO summit in 2014. Countries that experienced a large change of government are, thus, less likely to comply with the two percent target. Future research should examine the credibility problem of national governments in other international agreements too.
BASE
In: CESifo Working Paper No. 7489
SSRN
Working paper