Abstract 9
ARE THE MILITARY EXPENDITURES OF INDIA AND
PAKISTAN EXTERNAL DETERMINANTS FOR EACH OTHER:
AN EMPIRICAL INVESTIGATION
By
Nadir Öcal
Middle East Technical University
Department of Economics
March 2002
Address for correspondence:
Nadir Öcal
Department of Economics
Middle East Technical University
Ankara / Turkey
E-mail: ocal@metu.edu.tr
ABTRACT
A considerable amount of research in defence economic literature has focused
on examining the factors that influence the military expenditure of countries. A
common approach in these studies is to test and/or model whether one country’s
military expenditure is an external determinant of another country. However, although
this issue has been a topic of many researches for some rival states, like Greece and
Turkey, it seems that the case of India and Pakistan has been neglected. To fill this
gap, this paper analyzes the arms race between the two countries using both linear and
nonlinear models. The results of nonlinear model for Pakistan uncover strong
asymmetries and suggest that India’s military expenditure have larger effects when
past military expenditure of Pakistan is high.
Key Words: Military Expenditure, Nonlinear models, India and Pakistan