Most military coups result in a substantial increase in the allocation of public spending to defence, according to research by Vincenzo Bove and Roberto Nisticò. Their study, to be presented at the Royal Economic Society''s 2014 annual conference, compares the post-coup military spending trajectories of coup-ridden countries with the trajectories of similar but unexposed countries. Among the findings:
· The sudden lack of civilian control of the military is a critical determinant of the share of government budget allocated to the armed forces.
· Military coups, with few exceptions, tend to have a positive, large and lasting impact on the trajectory of military spending.
· The estimated average impact of the coup in the subsequent seven years ranges from 0.26% (in Thailand after 1991) to 7% (in Chad after 1975) of GDP.
· When there is no effect or even a decrease in the military burden, this is often the consequence of a democratisation process triggered by the coup (for example, in Portugal after 1974).
The authors note:
''Military intervention in politics in the form of coups is an important driver of defence spending in the years following the coup. In 2012, countries invested 2.5% of the world''s GDP or about US$1.753 trillion.
''This amount corresponds to the GDP of Canada, the eleventh largest economy in the world. The resources allocated to the military have important implications for national, regional, and global stability as well as for economic growth.''
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Coups are the archetypical form of the military having an impact on the policy process. This study explores how coups affect the military''s chances of redistributing resources towards their members through the manipulation of the country''s defence spending. The researchers find that a newly installed leader will implement budgetary allocations more favourable to the military, unless a more democratic institutional framework is set up.
Many governments of developing countries face considerable risk of coups perpetrated by their own military. Coups d''état have recently unseated leaders in countries as diverse as Mauritania (2008), Honduras (2009), Niger (2010) and Egypt (2013). The phenomenon was acute in South America in the 1970s and it has been a recurrent feature of Africa and parts of South East Asia since the end of the Cold War.
Autocratic countries are among the largest spenders on defence, and this study claims that military intervention in politics in the form of coups is an important driver of defence spending in the years following the coup. This is a very sensitive issue as each year states spend substantive monetary resources on the military: in 2012, countries invested roughly 2.5% of the world''s GDP or about US$1.753 trillion.
This amount corresponds to the GDP of Canada, the eleventh largest economy in the world. The resources allocated to the military have important implications for national, regional, and global stability as well as on economic growth.
As countries'' responses to military intervention in politics can be very heterogeneous and the armed forces sometimes bring about institutional changes, the researchers undertake a case-study analysis and estimate the changes in the level of military burden following a successful coup.
They use the synthetic control method – a counterfactual approach – and compare the post-coup military spending trajectories of coup-ridden countries with the trajectories of combinations of similar but unexposed countries.
In establishing a counterfactual – for example, what would military spending in Argentina have been like after 1976 had the military not seized power – many judgments are required about which part of the change in defence spending is a consequence of the coup and which would have occurred in any case without the coup. Increases in military spending that would have occurred without the coup need to be clearly identified to show what part of the increase can justifiably be attributed to the coup.
The researchers find that the sudden lack of civilian control of the military is indeed a critical determinant of the share of government budget allocated to the armed forces. The output gap between the actual and counterfactual shows that coups, with few exceptions, tend to have a positive, large and lasting impact on the trajectory of military spending.
The estimated average impact of the coup in the subsequent seven years ranges from 0.26% (in Thailand after 1991) to 7% (in Chad after 1975) of GDP. When there is no effect or even a decrease in the military burden, this is often the consequence of a democratisation process triggered by the coup (for example, in Portugal after 1974).
''Coups d''état and Defence Spending: A Counterfactual Analysis'' by Vincenzo Bove and Roberto Nisticò
