Militarism and Economic Growth: Empirical Evidence from the MENA Region Countries Using Dynamic Panel Model

This paper examines the effect of military expenditure on economic growth in MENA region countries. High share of military expenditure in GDP of the MENA region countries on the one hand and strategic position of Middle East countries in this region، on the other hand، need to examine the effect of military spending on economic growth in the MENA region countries. In this regard، an augmented Solow model (proposed by Knight et al. (1996) about military expenses and economic growth) during the period 1995-2012 is used. Long-run equilibrium relationship between the variables of this model verified by Pedroni (2004) and Kao (1999) panel cointegration tests. The results of this research by using generalized method of moments (GMM(of dynamic panel data، show the negative impact of military spending on economic growth in the MENA region countries. So can be said that although military spending is required in order to increase security of many countries in the region، but these expenditure will reduce economic growth.