Dynamic Analysis of the Relationship between Natural Resources and Militarism in the Middle East Countries

The main purpose of this paper is to estimate the effect of natural resources abundance on military expenditure in the Middle East countries during the years of 1995-2014. For this purpose, design a general model of military expenditure for this countries with the presence of natural resource abundance indicators, Includes two general index: The share of natural resource revenues from the GDP and the share of fuel exports from the merchandise exports and also 5 separate indicators, including: revenue share of oil, natural gas, coal, forests and minerals from the GDP and in order to estimate it, is used Generalized Method of Moments (GMM) in dynamic panel data form. The model estimation results show that general indicators of natural resources abundance had a positive and significant effect on the military expenditure of countries studied. Also, with separate of revenues from natural resources, show that the share revenues of oil and natural gas from the GDP, had a positive and significant effect and revenues from other natural resources, had a meaninglessness effect on the military expenditure in this countries. Accordingly, can say that the energy resources in Middle East countries influence on the military expenditure.So that a one percent increases in the share of oil and natural gas revenues of GDP, respectively, will increase military burden in this countries approximately 0.14 and 0.05 percent.