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Anecdotal evidence relates corruption with high levels of military spending. This paper tests empirically whether such a relationship exists. The empirical analysis is based on data from four different sources for up to 120 countries in the period 1985–98. The association between military spending and corruption is ascertained by using panel regression techniques. The results suggest that corruption is indeed associated with higher military spending as a share of both GDP and total government spending, as well as with arms procurement in relation to GDP and total government spending. This evidence indicates that defense spending can be considered for constructing governance indicators.

Public Finance --- Criminology --- Structure and Scope of Government: General --- National Security and War --- National Government Expenditures and Related Policies: Procurement --- National Government Expenditures and Related Policies: General --- Bureaucracy --- Administrative Processes in Public Organizations --- Corruption --- Education: General --- Public finance & taxation --- Corporate crime --- white-collar crime --- Education --- Defense spending --- Total expenditures --- Expenditure --- Crime --- Expenditures, Public --- Russian Federation --- White-collar crime

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The IMF MULTIMOD model is used to trace the economic impact of a 20 percent reduction in world military expenditures. GDP falls in the short run, however private consumption and investment rise, leading to an increase in GDP in the medium and long run. The estimated gains to economic welfare are substantial, particularly for developing countries, although most of these gains are realized in the long run. A positive international economic externality is found to exist, implying that for any given country the economic gains from a coordinated reduction in military expenditures exceed the gains from a unilateral reduction.

Exports and Imports --- Macroeconomics --- Public Finance --- National Security and War --- Macroeconomics: Consumption --- Saving --- Wealth --- National Government Expenditures and Related Policies: General --- Trade: General --- Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation --- Public finance & taxation --- International economics --- Defense spending --- Consumption --- Expenditure --- Private consumption --- Imports --- National accounts --- International trade --- Expenditures, Public --- Economics --- United States

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World military expenditures have fallen by over 20 percent in proportion to GDP from 1985 to 1990. This study examines the determinants of military expenditures in 125 countries during 1972-90 to ascertain what factors may be behind the recent decreases. Economic decline among developing countries in the 1980s and among industrial countries in the later part of the decade emerges as one possible factor. A second is the move towards more democratic regimes, which could diminish support for the military. A third factor is the improved world security situation and the concomitant decrease in military aid by the former major cold war combatants.

Budgeting --- Macroeconomics --- Public Finance --- Demography --- National Security and War --- National Budget --- Budget Systems --- National Government Expenditures and Related Policies: General --- Demographic Economics: General --- Personal Income, Wealth, and Their Distributions --- Public finance & taxation --- Budgeting & financial management --- Population & demography --- Defense spending --- Central government spending --- Expenditure --- Population and demographics --- Personal income --- Public financial management (PFM) --- National accounts --- Expenditures, Public --- Budget --- Population --- Income --- United States

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This paper investigates the economic impact of a coordinated reduction in military expenditures of 20 percent using a specially modified version of the MULTIMOD world economic model. Simulation results indicate that in developing countries the present value of consumption increases by 46 percent of 1992 GDP, compared to military expenditures cuts, in present value terms, of 33 percent of 1992 GDP. The gains reflect both the release of domestic resources and a positive international economic externality due to enhanced trade and lower world interest rates. Accordingly, the net debtor developing country gains exceed those of industrial countries. Examination of individual developing country economies confirms the significance of the external trade effect on the pattern and level of gains.

Exports and Imports --- Foreign Exchange --- Macroeconomics --- Public Finance --- National Security and War --- Trade: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Fiscal Policy --- Trade: Forecasting and Simulation --- Public finance & taxation --- International economics --- Currency --- Foreign exchange --- Defense spending --- Imports --- Private consumption --- Exports --- Real exchange rates --- Expenditure --- International trade --- National accounts --- Expenditures, Public --- Consumption --- Economics --- United States

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This paper explores the relationship between the degree of division or fractionalization of a country’s population (along ethnolinguistic and religious dimensions) and both political instability and government consumption, using a neoclassical growth model. The principal idea is that greater fractionalization, proxying for the degree of conflict in society, leads to political instability, which in turn leads to higher government consumption aimed at placating the opposition. There is also a feedback mechanism whereby the higher consumption leads to less instability as government consumption reduces the risk of losing office. Empirical evidence based on panel estimation supports this hypothesis.

Exports and Imports --- Macroeconomics --- Public Finance --- Fiscal Policy --- Fiscal and Monetary Policy in Development --- Macroeconomics: Consumption --- Saving --- Wealth --- Empirical Studies of Trade --- Aggregate Factor Income Distribution --- National Security and War --- International economics --- Public finance & taxation --- Government consumption --- Consumption --- Terms of trade --- Income --- Defense spending --- National accounts --- International trade --- Expenditure --- Economics --- Economic policy --- nternational cooperation --- Expenditures, Public --- Russian Federation --- Nternational cooperation