Budgetary Consequences of Defense Expenditures in Pakistan: Short-Run Impacts and Long-Run Adjustments
Abstract
In the last twenty years, there has been a growing interest in quantifying the 'guns versus butter' tradeoff
facing developing countries. This article examines Pakistan's military expenditures between 1973 and
1986 and estimates ·both a short-run impact model and long-run adjustment model to measure how
changes in the defense burden, the deficit, and government debt have affected budget allocations to
economic services programs and administrative/social programs. In addition, we investigate whether
defense budgets have been increased or maintained either at the expense of economic and social
programs in general or merely confined to one or two specific programs. Military expenditure patterns
are analyzed to see whether or not they were responsible for across-the-board cuts in long-term
infrastructure programs. Our analysis indicates that the deficit, the debt service, and the military burden
are often interrelated in such a compleic manner that the impact of any specific program is difficult to
predict. In the short run, most infrastructure programs increased as the military burden declined. The
opposite was generally true for social programs such as social security, welfare, and housing. Changes in
the defense budget appear to have only a transitory effect on the share of government expenditures
allocated toward infrastructure. The long-run model suggests that social programs have just as high a
priority as economic services. When the military burden increases, the government is willing to take
some resources from infrastructure programs and lets the deficit grow to finance social programs. Our
results also suggest a long run pattern of adjustment in social programs but not infrastructure programs -
a counter-intuitive result given Pakistan's severe infrastructure constraints.
Description
Journal of Peace Research, vol. 31, no. 3, 1994.
Refereed Journal Article
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.Collections
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