Guns and growth around the globe

Abstract

A model of direct and indirect linkages between defense outlays and economic output is developed and applied to approximately 100 countries. We illustrate that there is a positive linkage between military spending programs and economic productivity in most countries of the world. In addition, we find generally positive externalities from the military sector into the civilian sectors of the economy. Importantly, we find that the opportunity costs associated with military spending are considerable and that civilian investments generally produce greater economic benefits than military ones.