Abstract:

Using global data for the period 1960-99, Collier and Hoeffler estimate neighborhood arms races. They find that the level of military expenditure is strongly influenced by the expenditure of neighbors. The authors estimate an 'arms race multiplier,' finding that an initial exogenous increase in military expenditure by one country is more than doubled in both the originating country and its neighbor. An implication is that military expenditure is, to an extent, a 'regional public bad.' Potenti...

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