Defence spending, institutional environment and economic growth:: Case of NATO

• Natalia Utrero-González ^[2] ; Jana Hromcova ^[1] ; Francisco J. Callado-Muñoz ^[2]
  1. [1] Universitat Autònoma de Barcelona

     Universitat Autònoma de Barcelona

     Barcelona, España

     
  2. [2] Centro Universitario de la Defensa de Zaragoza, Academia General Militar
• Localización: Working papers (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada), Nº. 4 (Juliol 2017), 2017
• Idioma: inglés
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• Resumen

  • This paper analyses the impact of participating in a military alliance on the nexus between defence spending and economic growth. In particular, we study how the process of gradual association to a military organization in.uences the defence spending of new- comers, and consequently their economic growth. Conclusions from the theoretical model are tested empirically for countries in the North Atlantic Treaty Organization. Results show that the prospect of intensi.ed military alliance partnership and membership has a positive e¤ect on economic growth. In addition, increased security and stability gained by closer military cooperation reinforces the positive link with economic growth. Empirical evidence supports theoretical priors.