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Peace Economics, Peace Science and Public Policy

Editor-in-Chief: Caruso, Raul

Ed. by Bove, Vincenzo / Kibris, Arzu / Sekeris, Petros

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Volume 24, Issue 3

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Volume 17 (2011)

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Status or Security: The Case of the Middle East and North Africa Region

Mohamed Douch / Binyam Solomon
Published Online: 2018-08-24 | DOI: https://doi.org/10.1515/peps-2017-0047

Abstract

This paper takes advantage of the new extended military expenditures dataset from the Stockholm International Peace Research Institute (SIPRI) to estimate demand for military expenditures model for the Middle East and North Africa (MENA) region. The extended dataset affords us to adopt robust dynamic panel estimation techniques along with a set of threat and strategic interaction proxies. Our analysis indicates that status seeking (“peer pressure”) explains the bulk of the demand for military spending in the region. We also note a significant trade-off between military and social spending, somewhat mitigating the arms race implied by status. “Resource Curse” is not a significant determinant of military spending in the region especially when applying a robust dynamic specification. We find negative and weak response to local and regional threats suggesting the need for more sophistication in the design of threat proxies.

Keywords: threat; nuclear arsenal; demand for military expenditure; economic determinants; Middle East North Africa; dynamic panel data

JEL Classification: H56; C23

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About the article

Published Online: 2018-08-24


Citation Information: Peace Economics, Peace Science and Public Policy, Volume 24, Issue 3, 20170047, ISSN (Online) 1554-8597, DOI: https://doi.org/10.1515/peps-2017-0047.

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