Military Spending, the Peace Dividend, and Fiscal Adjustment

32 Pages Posted: 11 Feb 2006

See all articles by Hamid R. Davoodi

Hamid R. Davoodi

International Monetary Fund (IMF) - Fiscal Affairs Department

Benedict Clements

International Monetary Fund (IMF) - African Department

Jerald Schiff

International Monetary Fund (IMF) - European Department

Peter Marcel Debaere

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Date Written: July 1999

Abstract

The end of the Cold War has ushered in significant changes in worldwide military spending. This paper finds that the easing of (1) international tensions, (2) regional tensions, and (3) the existence of IMF-supported programs are related to lower military spending and a higher share of nonmilitary spending in total government outlays. These factors account for up to 66 percent, 26 percent, and 11 percent of the decline in military spending, respectively. Furthermore, fiscal adjustment has implied a larger cut in military spending of countries with IMF-supported programs.

Keywords: military spending, peace dividend, fiscal adjustment

JEL Classification: H10, H50, H56

Suggested Citation

Davoodi, Hamid R. and Clements, Benedict and Schiff, Jerald and Debaere, Peter Marcel, Military Spending, the Peace Dividend, and Fiscal Adjustment (July 1999). IMF Working Paper No. 99/87, Available at SSRN: https://ssrn.com/abstract=880614

Hamid R. Davoodi (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Benedict Clements

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Jerald Schiff

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Peter Marcel Debaere

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5794

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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