Work detail

Defence Expenditures in Western Countries: Panel Data Analysis

Author: Bc. Jan Sosnovec
Year: 2015 - summer
Leaders: doc. PhDr. Martin Gregor Ph.D.
Work type: Bachelors
Language: English
Pages: 88
Awards and prizes:
Abstract: The purpose of this thesis is to examine main determinants of military expenditures of NATO members
and other Western countries. These determinants are identified and their relations with military
expenditures analyzed using regression analysis on an unbalanced data panel of 30 countries during the
period 1969-2011. “Military burden' – share of defense expenditures on country's GDP – is used as the
explained variable. Explanatory variables include main economic indicators – GDP per capita,
population, economic growth, indebtedness etc. – as well as several variables related to security (e.g. the
level of threat posed by the Soviet Union) or politics (ideological orientation of the government). The
question of behavior within a military alliance (contribution versus free-riding) is also taken into
account. The main findings are that there are significant structural differences between major military
powers – the US, France and the UK – and the rest of the Western world, and similar differences appear
to exist between the Cold War and the post-Cold War periods. Furthermore some evidence is provided
for the commonly held belief that smaller NATO members are essentially free-riding on the protection
provided by few major powers (especially the US).




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