Is military spending converging to a low level across countries?

Military spending in relation to national GDP and government budgets in both advanced and developing economies has fallen considerably since the end of Cold War. The previous papers have studied convergence in military spending by deploying methodologies used to analyze convergence in country growth rates and other economic variables. In this paper, we employ an improved technique and more up-to data for 138 countries during 1970-2019 to study convergence in military spending. We find that there is indeed convergence in military spending across countries, but in 3 distinct groups, with each group comprising both advanced and developing countries. A country's membership of a group is influenced by political stability and risk of violence in the country, the level of its social spending and military spending by its neighbors. Our empirical results have important implications for a key budget component in both advanced and developing countries.

Automated summary

The study reveals that there is convergence in military spending globally, but it is divided into three distinct groups, influenced by factors such as political stability, social spending levels, and military expenditures of neighboring countries.