Military Expenditures and Human Capital Development: Can the Arab World Have Both

Abstract

The purpose of this paper is to present some recent empirical findings 'Concerning the role of military expenditures in human capital formation. While the analysis involves all of the Arab countries, particular attention was given to the Gulf states. The main findings of the study indicate that an important aspect of human capital developm"ent, improvements in literacy, has proceeded in a so!Ilewhat unique manner in the Arab world. For these countries, improvements in literacy have been much more closely associated with the military participation rate than is the case in other parts of the world. While this relationship appears to be weakening somewhat, it is still a dominant factor for these countries.