How Resilient are Military Expenditures in the Context of Fund-Supported Programs?

48 Pages Posted: 15 Feb 2006

See all articles by Paula De Masi

Paula De Masi

affiliation not provided to SSRN

Henri Lorie

International Monetary Fund (IMF)

Date Written: June 15, 1988

Abstract

This paper examines how military spending has been affected by Fund-supported programs. It looks at the changes in military expenditure as a share of gross domestic product (MIL/GDP) and of total expenditure (MIL/EX) for two subsamples of Fund-supported programs, broadly divided into fiscal tightening and fiscal accommodating. Under fiscal tightening, the evidence suggests that MIL/GDP decreases during Fund-supported programs, but that MIL/EX increases, revealing resilience to budgetary adjustments. Under fiscal accommodation, as total government expenditure tends to increase, so does military expenditure; however, the ratio MIL/EX declines, as fewer additional resources are allocated to the military.

JEL Classification: 3221

Suggested Citation

De Masi, Paula and Lorie, Henri, How Resilient are Military Expenditures in the Context of Fund-Supported Programs? (June 15, 1988). Available at SSRN: https://ssrn.com/abstract=884805 or http://dx.doi.org/10.2139/ssrn.884805

Paula De Masi (Contact Author)

affiliation not provided to SSRN

No Address Available

Henri Lorie

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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