Military Versus Non-Military Government Spending and the Shadow Economy

Posted: 29 Oct 2015 Last revised: 19 Apr 2016

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

James W. Saunoris

Eastern Michigan University

Date Written: 2014

Abstract

Using recent cross-national data, this research examines the determinants of the shadow economy, focusing on the relative effects of military and non-military government spending. Results show that, other things being the same, nations with larger military spending have smaller shadow economies, while the effect of non-military government spending is statistically insignificant. These findings stand up to various robustness checks.

Keywords: Military spending, Non-military spending, Shadow economy, Government, Regulation

JEL Classification: K42, O50, P48

Suggested Citation

Goel, Rajeev K. and Saunoris, James W., Military Versus Non-Military Government Spending and the Shadow Economy (2014). Economic Systems, Vol. 38, No. 3, pp.350-359, 2014. Available at SSRN: https://ssrn.com/abstract=2682528

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

James W. Saunoris

Eastern Michigan University ( email )

Eastern Michigan University
Ypsilanti, MI 48197
United States

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