Military expenditures in the Third World : the case of conflicting countries

This study attempts to find the determinants of military expenditures and investigate influences of those determinants in conflicting countries in the Third World. The basic idea is from Richardson's action-reaction arms race model.

The main test procedure is the ordinary least squares (OLS) multiple regression using the pooled data across time and space. The data set used in this study is taken from 10 conflicting countries in the Third World over a period of 13 years for each country. Analyses are focused on causal relationships, selecting key variables such as GNP and military expenditures of rival countries in the previous year, and statistical techniques for unbiased model outliers and using pooled data. Considering of

The regression results, generally, show highly significant and extreme predictive power to explain the level of military expenditures in the sample. Five variables: GNP, military expenditures of rival countries, hostility between two opponents, war involvement, and military burden have positive impacts on the level of military expenditures, while international conflict does not affect it significantly. GNP and military expenditures of the rival country in the previous year are the most important factors to decide the level of military expenditures in the conflicting countries.

In conclusion, this empirical study suggests three ways which may bring about disarmament. First, we need to decrease the military expenditures of both countries through arms control agreements to prevent action-reaction behavior and accelerated arms race from occurring. Second, we need to eliminate hostility between opponents through peaceful dialogue or economic cooperation. Lastly, further studies are suggested to focus on the regional conflicts, rather than on the superpowers arms race, to find out a good means to help to establish world disarmament.