Defence Budgets in the Post-Cold War Era: A Spatial Econometrics Approach

35 Pages Posted: 22 Jan 2015

See all articles by Karl Skogstad

Karl Skogstad

Lakehead University Department of Economics

Date Written: January 9, 2015

Abstract

This paper examines the determinants of national defence budgets in the post-Cold War era using a spatial econometric framework. Using data for 124 countries over a 16 year time period, I examine spatial relationships in defence spending to investigate how countries account for the military spending of other countries when setting their budgets. Using specially developed weighting matrices, the regression results indicate that defence budgets are positively spatially correlated. These results provide support for the use of "external" factors when examining defence budgets over this time period. The importance of a country's spatial location when setting its budget is further examined through the identification of regions of high and low defence spending.

Keywords: Defence Budgets, Spatial, External Factors

JEL Classification: F52, H56

Suggested Citation

Skogstad, Karl, Defence Budgets in the Post-Cold War Era: A Spatial Econometrics Approach (January 9, 2015). Available at SSRN: https://ssrn.com/abstract=2552811 or http://dx.doi.org/10.2139/ssrn.2552811

Karl Skogstad (Contact Author)

Lakehead University Department of Economics ( email )

Thunder Bay, P7B 5E1
Canada
807-343-8378 (Phone)

HOME PAGE: http://sites.google.com/site/karlskogstad/

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