![]() First, military spending upsurge may diminish the total accumulation of existing resources available for other domestic usages such as investment in prolific capital, education, and market-oriented technological enhancement. However, there are two direct and interconnected ways by which higher military expenditure may unfavorably affect long-run economic growth. In the absenteeism of international collaboration to minimize political pressure, military expenditures can be driven more and more across a region as each country goes beyond its neighbors to safeguard its security, raise the level of regional military expenditure and bring little rise or even a decline in the security of all. ![]() ![]() Generally, it is believed that in the insecure region, each country deliberately allocates an uneven share of its meager economic resources to “unproductive” military expenditure. While comparatively more resources are devoted to military formulations, and lesser proportion is left for investment in the education and technology sectors, which play a vital role in the economic growth process and provide a broader base for socio-economic development 1. According to conventional logic, the military formulation is an economic encumbrance. The focus of academicians, researchers, and developmental economists for peace economics are useable as military spending is one of the main concerns of countries, regardless of their development status. (2019), it is ascertained that military spending has several positive effects on capital, labor, growth, and the effectual use of available resources in the economy as a whole. Several prior studies have drawn findings that support the Keynesian military view of the positive influence of military expenditure on national output ( Benoit, 1978 Khalid and Noor, 2018 Raju and Ahmed, 2019). When aggregate demand is lower relative to prospective supply, rises in military spending tend to enlarge capacity utilization, raise profits, and consequently, enhance investment and aggregate output ( Faini et al., 1984). Military spending affects economic growth through many channels. Military spending according to the Keynesian approach is a component of government consumption, which stimulates economic growth by expanding demand for goods and services. There is a substantial volume of literature about the economic consequences of military expenditure however, no consensus has been developed, whether military spending is beneficial or detrimental to economic growth. The ultimate objectives of underdeveloped and developed countries are to achieve sustainable economic growth and prosperity in the long-run. The assessment of the economic and social effects of military expenditure remains an interesting desirable area of research. The empirical findings of this study suggest that policymakers need to redesign the military budget to stimulate economic growth and improve social welfare. Overall, these estimates provide strong support that military expenditure is not beneficial rather detrimental to economic growth. The pairwise Dumitrescu Hurlin panel causality test results exhibit bi-directional causality between military expenses and economic growth. This study found a clear negative effect of military spending on economic growth. The panel autoregressive distributed lag (ARDL)/pooled mean group (PMG) technique is employed, while, in addition the robust least squares and fixed-effect estimators are implemented for the robustness of the results. A multivariate regression model based on the augmented production function is used to achieve the objective of the study. This study aims to empirically evaluate the impact of military spending on economic growth for a panel of 35 non-OECD countries over 1988–2019. Undeniably, peace and long-term sustainable economic development are the prime agenda of all countries.
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