The Determinants of Defense Spending in the Gulf Region

YALTA A. T., YALTA A. Y.

DEFENCE AND PEACE ECONOMICS, cilt.33, sa.8, ss.980-992, 2022 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 33 Sayı: 8
  • Basım Tarihi: 2022
  • Doi Numarası: 10.1080/10242694.2021.1918857
  • Dergi Adı: DEFENCE AND PEACE ECONOMICS
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, EconLit, Index Islamicus, Political Science Complete, Public Affairs Index
  • Sayfa Sayıları: ss.980-992
  • Anahtar Kelimeler: Demand for defense, security web, GCC countries, Iran, Iraq, 3SLS, MILITARY EXPENDITURE, ECONOMIC-GROWTH, MIDDLE-EAST, PANEL-DATA, STATES, COUNTRIES, DEMAND, TESTS
  • Hacettepe Üniversitesi Adresli: Evet

Özet

We examine the determinants of military spending of the six countries in the Gulf Region by using a partial adjustment model in a system setting estimated with the three-stage least squares (3SLS) method. Our model takes into consideration the institutional inertia as well as intercountry correlations, both observed and unobserved. In addition to economic variables, we also consider a series of strategic variables to shed light on various issues such as free riding and spill-in effects. Our findings based on annual data between 1980 and 2016 indicate that the military expenditures are influenced by both economic and strategic factors with a high degree of heterogeneity across different countries. Our results also show that the GCC member countries do not free ride on each others' military expenditures. In addition, the US military presence is an important determinant of defense spending in the region.