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Military Expenditure Data for Developing Countries: Methods and Measurement 2 tee /'qL Public Disclosure Authorized 185L World Bank Discussion Papers Military Expenditure Public Disclosure Authorized and Economic DLevelopment A Symposium on Research Issues Public Disclosure Authorized edited by Geoffrey Lamb with Valeriana Kallab Public Disclosure Authorized Recent World Bank Discussion Papers No. 125 HousingReform in SocialistEconomies. Bertrand Renaud No. 126 AgriculturalTechnology in Sub-SaharanAfrica: A Workshopon ResearchIssues. Suzanne Gnaegy andJock R Anderson, editors No. 127 UsingIndigenous Knowledge in AgriculturalDevelopment. D. Michael Warren No. 128 Researchon Irrigaticnand DrainageTechnologies: Fifteen Years of WorldBank Experience.Raed Safadi and Herve Plusquellec No. 129 Rent Controlin DevelopingCountries. Stephen Malpezzi and Gwendolyn Ball No. 130 Patternsof DirectForeign Investment in China. Zafar Shah Khan No. 131 A New View of EconomicGrowth: Four Lectures.Maurice FG. Scott No. 132 AdjustingEducational Policies: Conserving Resources While RaisingSchool Quality. Bruce Fullerand Aklilu Habte, editors No. 133 Letting GirlsLearn: Promising Approaches in Primaryand SecondaryEducation. Barbara Herz, K. Subbarao, Masooma Habib, and Laura Raney No. 134 ForestEconomics and PolicyAnalysis: An Overview.William F. Hyde and David H. Newman, with a contribution by Roger A. Sedjo No. 135 A StrategyforFishe;ries Development. Eduardo Loayza, in collaboration with Lucian M. Sprague No. 136 StrengtheningPublic Service Accountability: A ConceptualFramework. Samuel Paul No. 137 DeferredCost Recoveryfor Higher Education: Student Loan Programsin DevelopingCountries. Douglas Albrecht and Adrian Zidemian No. 138 Coal Pricingin China: Issuesand ReformStrategy. Yves Albouy No. 139 PortfolioPe!formance of SelectedSocial Security Institutes in Latin America.Carmelo Mesa-Lago No. 140 SocialSecurity and ProspectsforEquity in Latin America.Carmelo Mesa-Lago No. 141 China'sForeign Trade and ComparativeAdvantage: Prospects, Problems, and PolicyImplications. AlexanderJ. Yeats No. 142 RestructuringSocialist Industry: Poland's Experience in 1990. Homi J. Kharas No. 143 China: IndustrialPoliciesfor an Economyin Transition.Inderjit Singh No. 144 ReformingPrices: The Experienceof China, Hungary,and Poland.Anand Rajaram No. 145 DevelopingMongolia . Shahid Yusuf and Shahid javed Burki No. 146 Sino-JapaneseEconomic Relationships: Trade, DirectInvestment, and FutureStrategy. Shuichi Ono No. 147 The Effectsof EconomicPolicies on AfricanAgriculture: From PastHarm to FutureHope. William K. Jaeger No. 148 The SectoralFoundations of China'sDevelopment. Shahidjaved Burki and Shahid Yusuf, editors No. 149 The ConsultingProJ;sssion in DevelopingCountries: A StrategyforDevelopment. Syed S. Kirmani and Warren C. Baum No. 150 SuccessfulRural FinanceInstitutions. Jacob Yaron No. 151 TransportDevelopment in SouthernChina. Clell G. Harral, editor, and Peter Cook and Edward Holland, principal contributors No. 152 The UrbanEnvironment and PopulationRelocation. Michael M. Cernea No. 153 FundingMechanismsfor Higher Education: Financingfor Stability, Efficiency, and Responsiveness.Douglas Albrecht and Adrian Ziderman (Continued on the inside back cover.) 185 = World Baik Discussion Papers Military Expenditure and Economic Development A Symposium on Research Issues edited by Geoffrey Lamb with Valeriana Kallab The World Bank Washington, D.C. Copyright C) 1992 The Intemational Bank for Reconstruction and Development/THE WORLDBANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing December 1992 Discussion Papers present resultsof country analysisor research that is circulated to encourage discussion and comment within the development community. To present these resultswith the least possible delay, the typescript of this paper has not been prepared in accordance with the procedures appropriate to fornal printed texts, and the World Bank accepts no responsibilityfor errors. The findings, interpretations, and conclusionsexpressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliatedorganizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data induded in this publication and accepts no responsibility whatsoever for any consequence of their use. Any maps that accompany the text have been prepared solely for the convenience of readers; the designations and presentation of material in them do not imply the expression of any opinion whatsoever on the part of the World Bank, its affiliates,or its Board or member countries conceming the legal status of any country, territory, city, or area or of the authorities thereof or concerning the delimitation of its boundaries or its national affiliation. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted dtrough the Copyright Clearance Center, 27 CongressStreet, Salem,Massachusetts 01970, U.S.A. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countries and regions. The latest edition is availablefree of charge from the Distribution Unit, Office of the Publisher, Department F, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'[6na, 75116 Paris, France. ISSN: 0259-210X Geoffrey Lamb is chief of the Public Sector Management Unit in the Wodd Bank's Europe and Central Asia and Middle East and North Africa Regions Technical Department. Valeriana Kallab was an editorial consultant for this volume. Library of Congress Cataloging-in-Publication Data Military expenditure and economic development: a symposium on research issues / edited by Geoffrey Lamb with Valeriana Kallab. p. cm. - (World Bank discussion papers ; 185) Includes bibliographical references. ISBN 0-8213-2289-3 1. Armed Forces-Appropriations and expenditures. 2. National security-Economic aspects. I. Lamb, Geoffrey, 1944- II. Kallab, Valeriana. III. Series. UA17.M55 1992 355.6'22-dc2O 92-34610 CIP Foreword The World Bank's businessis development. Traditionally, therefore, it has not concerneditself with matters relating to national security and the military. In recent years, however, two trends have combinedto raise renewed debatewithin Bank member countries, and within the Bank itself, about levels of military expenditure(and in some countries also military industries)and their impact on economicdevelopment. First, global politicalchanges and the relaxationof Cold War tensionshave held out a prospect-still all too elusive, in the light of post-ColdWar nationalist and ethnic tensions-of decreased need for military outlays, especially in areas where regional conflict also had strong Cold War dimensions. Second, both public and private resources for economicdevelopment will continue to be tightly constrained in most developing countries, and in the countries in transition from commandeconomies, throughout this decade. For governments and for the Bank, this prompts a hard look at the adequacy of public money committed to development, and in many countries is already producing an increasedreadiness to search for economiesin non-developmental expenditure-includingthe military. The Bank's leadership has underlined the importance of working collaborativelywith member governments, and with the IMF, to explore the fiscal and developmentalissues involved. Where our borrowers are embarking on reductions in military expenditureor production and seek our involvement, the Bank also stands ready to assist-for example,with programs to facilitatethe integrationof former military personnel and facilities into the private economy and, on a market-driven basis, the phasing-down or conversion of military industries. Effective action in the sensitive area between national development and national security demands careful appreciationof the complexities. Military expendituredata are almost always incompleteor misleading. The relationship between military expenditure and economic growth is neither uniform across countries nor monotonic within them. Converting military industries poses Hi. difficult issues of efficiencyand industrialpolicy, as well as social and political problems. And, of course, the internal, regional and internationalfactors driving military expenditureare extremelydiverse. These complexitiesprompted the Bank to commissionthe survey papers in this volume, as a contributionto its own thinkingand to the wider debate. Given the nature of the Bank's interest, the papers focus specificallyon the economic aspects of military expenditurein developingcountries. Initial versions were discussedat an internationalsymposium organized by the editor of this volume, Geoffrey Lamb, in Washington in December 1990. They have since been extensivelyrevised, in part to take some accountof the rapidity of international developmentsin 1991 and 1992. This activity was supportedby a research grant from the Bank's Research Administrator.
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