Numerous studies have estimated demand for military expenditure in terms of economic, political and strategic variables. Ten years after the end of the Cold War, this paper attempts to ascertain if the new strategic environment has changed the pattern of determinants, by estimating cross-country demand functions for developing countries for periods during and just after the Cold War. The results suggest that, for both periods, military burden depended on neighbours' military spending and internal and external conflict. Democracy and population both relate negatively to military burden. There is little evidence of a change in the underlying relationship between the periods.

We recommend you cite the published version. The publisher's URL is http://dx.doi.org/10.1080/10242690802166566Refereed: Yes (no note) Disclaimer UWE has obtained warranties from all depositors as to their title in the material deposited and as to their right to deposit such material. UWE makes no representation or warranties of commercial utility, title, or fitness for a particular purpose or any other warranty, express or implied in respect of any material deposited.UWE makes no representation that the use of the materials will not infringe any patent, copyright, trademark or other property or proprietary rights. UWE accepts no liability for any infringement of intellectual property rights in any material deposited but will remove such material from public view pending investigation in the event of an allegation of any such infringement. AbstractThis paper has considers the interpretation of the empirical results of the developing literature on the demand for military spending that specifies a general model with arms race and spillover effects and estimates it on cross-section and panel data. It questions whether it is meaningful to talk of an 'arms race' in panel data or cross-section data, and suggests that it may be more appropriate to talk about the relevant variables -aggregate military spending of the 'Security Web' (i.e. all neighbours and other security-influencing powers) and the aggregate military spending of 'Potential Enemies'-as acting as proxies for threat perceptions, which will reflect both hostility and capability.

Estimating demand functions for developing countries before and after the end of the Cold War, Dunne and PerloFreeman (2003) found little evidence of any change in the underlying relationship. One concern with their analysis was that the use of cross-section averages might have obscured important time series effects. This paper deals with this issue by analysing their data using static and dynamic panel data methods. This produces evidence of a change in relationship and suggests that the focus in the literature on cross-section analyses has indeed limited our understanding of important dynamic processes at work within countries.

This paper considers impact of military spending on debt in a panel of 11 small industrialising economies using panel data methods. It provides estimates for fixed effects and random effects models and then moves on to consider dynamic models. The dynamics are found to be important and the results suggest that military burden does indeed have a positive impact on the share of external debt in GDP.

This paper investigates the relationships between basic needs and economic growth where the interactions between output, health, nutrition and education are explicitly simultaneous. We find a unidirectional relationship that improving basic welfare contributes strongly to labour productivity change, but a clear reverse causation only from growth to nutrition. There are substantial differences in the patterns of simultaneous interactions at different income and welfare levels. There are strong self-reinforcing effects of literacy and debt service on poverty, making it difficult for poor countries to rectify their situation. Channelling resources towards improving health, education and nutrition could bring dramatic economic returns. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd.