The Impact of Military Expenditures on Health Indices in the Middle East; Evidence of Cross-Sectional Panel Convergence

Abstract

Introduction: Military spending, education and health are among the most important components of the government budget, and making a balance between them is very complicated. Increasing military spending can increase or decrease health spending and health status. Therefore, the purpose of this study was to investigate the effect of military spending on health status in Middle Eastern countries. Materials and Methods:The present descriptive-analytical and applied study was performed for Middle Eastern countries (including Iran) using the Paneldita method with cross-sectional dependence. Among Middle Eastern countries, 13 countries were selected as the statistical population by systematic sampling method. The data required for the study was an annual time series that was extracted from the World Bank databases for selected countries in 1990-2019. Boys CD, Boys Unit Root (CIPS test), Westerlund aggregation and model estimation with common mean group correlation effect estimators (CCEMG), generalized group mean (AMG), fully modified ordinary squares (FMOLS) and dynamic ordinary squares (DOLS) ) In Eviews 10 and STATA 16 software. Results:The co-integration results of the models showed that Military expenditures as a percentage of GDP has a negative effect on life expectancy of -0.037 and -0.004 in AMG and CCEMG estimators, respectively, and a positive effect of 0.22 and 1.91 on the mortality rate of children under five years of age in FMOLS and DOLS estimators, respectively. The logarithm of GDP per capita had a positive effect on life expectancy of 0.553 and 0.588 in the AMG and CCEMG estimators, respectively. The annual growth rate of the urban population also had a positive effect of 0.048 on life expectancy with the AMG estimator.Conclusion: military expenditures as a percentage of GDP had a negative effect on life expectancy and a positive effect on the under-five mortality rate in the Middle East. GDP and urbanization rates also had a positive effect on life expectancy and a negative impact on the under-five mortality rate; Therefore, it is suggested to maintain a certain and appropriate ratio of military expenditures to other social expenditures. Also, some solutions to achieve greater security by reducing military expenditures are proposed.

The Effect of Paid Maternity Leave on Child Health in the Middle East and North Africa

“…Before estimating the above models, the cross-sectional dependence of the model data should be determined, and then the subsequent tests and finally the estimation methods should be determined based on it. Although it is commonly assumed that the data used in panel data models have cross-sectional independence, this assumption may be violated for many panel data due to their interaction, hence the cross-sectional dependence of variables should be assessed first ( 20 ). To test the cross-sectional dependence, the Pesaran CD test (CD test) ( 21 ) was used.…”

“…In this test, the null hypothesis indicates the unit root or nonstationary of the variables. Therefore, if the calculated value of the test is greater than its critical value, the null hypothesis is rejected and the variable is stationary ( 20 ). The Pedroni and Kao tests could be used to examine the cointegration between the variables if there is no cross-sectional dependence, and the Westerlund panel data test could be used if there is cross-sectional dependence ( 24 ).…”

“…If the calculated z statistic is greater than its critical value, the null hypothesis will be rejected and the model variables will be cointegration. It should be noted that the Westerlund cointegration test can be used for both cross-sectional dependence and cross-sectional independence ( 20 ). If the cross-sectional dependence is proved, the Westerlund bootstrap method should be used ( 23 ).…”