Military expenditures and bureaucratic competition for rents

Mbaku, John Mukum

doi:10.1007/bf00138447

Cited by 19 publications

(13 citation statements)

References 5 publications

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“…Mbaku (1991) examines the influence of the military as a rent-seeking interest group on the activities of other groups in the rent-seeking game. He suggests that both in democratic societies and in dictatorships, the role of the military as guardian of national security puts it in a unique position to affect resource allocations, hence military expenditure.…”

Section: Political Determinants Of Military Spendingmentioning

confidence: 99%

Coups d’état and defense spending: a counterfactual analysis

Bove

Nisticò

2014

Public Choice

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We explore how institutional set-ups, in particular changes in political institutions through coups d'état , can affect the way military expenditures are determined.We use a counterfactual approach, the synthetic control method, and compare the evolution of the military burden for 40 countries affected by coups with the evolution of a synthetic counterfactual that replicates the initial conditions and the potential outcomes of the countries of interest before exposure to coups. Our case studies suggest that successful coups result in a large increase in the military burden.However, when no effects or a decrease in the defense burden are found, it is often the consequence of a democratization process triggered by the coup. These results are in keeping with recent theoretical developments on the bargaining power of the military in authoritarian regimes. Failed coups, by contrast, produce a smaller, and mostly positive, effect on the military burden, possibly as a result of the incumbent's strategy to avert further challenges to the stability of the regime by buying off the military.JEL classification: H11, H56

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Section: Political Determinants Of Military Spendingmentioning

confidence: 99%

Coups d’état and defense spending: a counterfactual analysis

Bove

Nisticò

2014

Public Choice

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“…Bureaucrats, in turn, attempt to increase their level of compensation by accepting bribes, so that there is bureaucratic corruption (Büchner et al 2008;Mbaku 1991Mbaku , 1996. That is, bureaucrats behave self-interestedly and adapt to the change of incentives induced by the introduction of the capital account restriction.…”

Section: Formal Modelmentioning

confidence: 99%

“…This approach abstracts from other rent-seeking behavior of bureaucrats, politicians and other interest groups (e.g., Stigler 1971;Krueger 1974;Posner 1974;Peltzman 1976;Bhagwati 1982;Becker 1983;Mbaku 1991Mbaku , 1996Shleifer and Vishny 1993;Duso 2005). Lobby groups try to distort governments' decisions to attract rents, and Lambsdorff (2002, p. 98) emphasizes that there is no reason to believe that governments themselves are immune to corruption.…”

Section: Formal Modelmentioning

confidence: 99%

The nexus between corruption and capital account restrictions

Dreher

Siemers

2009

Public Choice

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We provide a formal model illustrating the mutual relationship between corruption and capital account restrictions. Corrupt countries are more likely to impose capital controls because corruption reduces a government's ability to collect tax revenue. If controls exist, however, individuals try to mitigate the burden by offering bribes, thereby increasing corruption. We test the model using panel data for 80 countries over the period [1984][1985][1986][1987][1988][1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001][2002] and find that corruption and restrictions indeed affect each other. Government's attempts to increase revenue via controls on capital might thus invoke a restrictions-rent-seeking spiral with destructively high levels of both. Using capital controls to increase revenue should be reconsidered.

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“…To the extent that (1) the rule-making authorities concentrate on restricting market operations and ( 2 ) the aspiring entrepreneurs focus on competing for rents generated in state-distorted markets by way of lobbying, exclusive access to import licenses, or subsidized production, rent seeking is considered wasteful of societal resources and economically inefficient in both resource allocation and production (Krueger 1974;Tollison 1982). This perspective pays more attention to the deeds of social agents than to the behavior of government officials (Mbaku 1989). In effect, an interest-seeking state blocks entry by nonmembers so as to extract the profits generated by its plundering of public resources.…”

Section: The Interest-seeking State and Economic Underdevelopmentmentioning

confidence: 99%

“…The concentration of goods within the small circle surrounding the governing elite also constricts consumption by the masses, lowering their nutrition levels and productivity (Colclough 1985). For example, in Nigeria, while the military elite struggled to preside over the state's allocative powers and to maintain the value of high salaries, the GNP per capita and quality of life of the masses markedly shrank (Mbaku 1994).…”

Section: The Interest-seeking State and Economic Underdevelopmentmentioning

confidence: 99%

The State's Interest Seeking and Economic Stagnation in the Third World: Cross-National Evidence

Tsai

1998

The Sociological Quarterly

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In the development literature, the state's interest seeking is considered a crucial determinant of economic stagnation in the Third World. The internality inefficiency, opportunity costs, and structural disincentives generated by such a state constitute the key mechanisms responsible for slow growth. This study provides a major quantitative test of this hypothesis. A sectoral approach is proposed to measure the interest seeking of the state by using the central government expenditures for state employees' wages and salaries as an indicator. As the analysis of pooled data from fifty-five less-developed countries reveals, high expenditures on salaries impeded the GDP growth rate in . In response to the argument that the African economy is more vulnerable to state predation, this regional effect hypothesis is further tested with an interaction model. The results reveal that the harmful growth effect of the state's interest seeking cuts across varied regions and can be generalized.In theorizing about underdevelopment in Third World countries, researchers have recently proposed that an interest-seeking state operating at the expense of the population at large is a major obstacle to economic growth (Evans 1992(Evans , 1995Lewis 1994;Sandbrook 1986). The idea of a self-interested state can be traced back to Max Weber's discussion of patrimonial states. In patrimonial domination, the overbearing power of the ruler maintains a political order that is adapted to satisfying private household needs. The state (composed of the ruler, the military, and the administrative staff) forms a cohesive class that employs the state apparatus as a means of individual accumulation. For Weber (1 978, p. lOlZ), such a privileged group can be forged by strong organizational solidarity as it "increases the members' knowledge of the common nature of their interests and thus the inclination and ability to look after them." As a patrimonial regime is built into a "community of fate," extracting societal resources for distribution among an exclusive group militates against bureaucratic rationalization.In light of Weber's theoretical insights, recent discussions of "state predation" have attempted to define the structural mechanisms operating within the interest-seeking states that create such substantial obstacles to national development. Guenther Roth (1968) noted that nation building in numerous Third World countries relied upon an elite who dis-*Direct all correspondence to Ming-Chang Tsai,

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Military expenditures and bureaucratic competition for rents

Cited by 19 publications

References 5 publications

Coups d’état and defense spending: a counterfactual analysis

Coups d’état and defense spending: a counterfactual analysis

The nexus between corruption and capital account restrictions

The State's Interest Seeking and Economic Stagnation in the Third World: Cross-National Evidence

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