An economic analysis of military expenditures
Winns, Anthony Lee
Walsh, William J.
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This thesis empirically explores the nature of the relationships between members of formal and informal alliances. A pooled time series cross sectional data methodology is employed to analyze those factors believed to have a significant impact on the behavior of national governments in allotting funds for defense. Regression analysis is performed on seventy-five countries over an eleven year period (1974-1984) including both NATO and non-NATO members; communist and non-communist nations; and developed and less-developed countries. The empirical results reveal inconclusive evidence for the traditional view that an inverse relationship exists between the military expenditures of allies. The distinction between formal and informal allies provides no further evidence of support and exposes some of the weaknesses of this view of military alliances.
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