The Economic Consequences of Defense Expenditures in the Middle East

Abstract

Since the Middle East has the highest defense burden (defense expenditures as a share of gross domestic product) in the developing world, it is of some interest to assess the extent military expenditures have influenced national efforts at expanding investment. The purpose of this paper, therefore, is to assess whether military expenditures in five of the major defense spenders, namely Algeria, Egypt, Syria, Israel, and Saudi Arabia, have been at the expense of physical capital accumulation as well as other macroeconomic aggregates.