Corruption and Military Spending

32 Pages Posted: 30 Jan 2006

See all articles by Sanjeev Gupta

Sanjeev Gupta

International Monetary Fund (IMF) - Fiscal Affairs Department

Luiz R. de Mello

OECD

Raju Sharan

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: February 2000

Abstract

Anecdotal evidence relates corruption with high levels of military spending. This paper tests empirically whether such a relationship exists. The empirical analysis is based on data from four different sources for up to 120 countries in the period 1985-98, The association between military spending and corruption is ascertained by using panel regression techniques. The results suggest that corruption is indeed associated with higher military spending as a share of both GDP and total government spending, as well as with arms procurement in relation to GDP and total government spending. This evidence indicates that defense spending can be considered for constructing governance indicators.

Keywords: Corruption, military spending, panel data

JEL Classification: H10, H56, H57

Suggested Citation

Gupta, Sanjeev and de Mello, Luiz R. and Sharan, Raju, Corruption and Military Spending (February 2000). IMF Working Paper No. 00/23, Available at SSRN: https://ssrn.com/abstract=879367

Sanjeev Gupta (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Luiz R. De Mello

OECD ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France
+33-1-45.24.87.52 (Phone)

Raju Sharan

International Monetary Fund (IMF) - Fiscal Affairs Department

700 19th Street, NW
Washington, DC 20431
United States

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