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Published: 28-09-2012, 06:25

Military aid: Military and Development Aid

Military aid

Military aid: Military Spending in Low-Income Countries

Military and development aid are both targeted at foreign nations. An interesting question is how much of foreign assistance is allocated to the seemingly different purposes of overseas security on the one hand and development on the other. This analysis requires data on the different components of aid. Development aid data are available through national governments and the OECD. Few countries, however, make military aid data available, the United States being a notable exception.When one sums up U.S. military and development aid to ‘‘total aid,’’ it is interesting to see how the composition of total aid changed over time. From1970 until 1975 the share ofmilitary aid was larger than the share of development aid; it accounted for 53 percent of the total aid figure. After the end of the VietnamWar the composition of total aid changed, and by the early 2000s the share of military aid in total aid was only 23 percent.

Military aid data for the other major donors are not readily available but if the shares of military and development aid are similar to those of the United States, a rough estimate of global military aid can be calculated. In 2006 the sum of all development aid was U.S. $85 billion; therefore, globally military aid was probably around $26 billion. Not all of this military aid is provided to poor countries.Much of this military aid goes to developed countries such as Israel and Turkey. A large proportion of low-income countries’ military expenditure is provided through foreign assistance, however. Since this is precisely the aim of military aid, there does not seem to be any problem with financing other countries’ military budgets.But is all of the development aid used for the purpose of economic development for which it is intended or is some of it leaking into military spending, which is explicitly excluded from the definition of development aid?

A large number of studies examine what determines the allocation of aid to the different recipient countries (Alesina and Dollar 2000). The literature distinguishes between recipient need, recipient merit, and donor self-interest as motivations for development aid. It seems that, for example, U.S. aid allocation over the past few decades has been predominantly driven by geostrategic interests rather than by recipient needs (McKinley and Little 1979). In this sense donors use development aid for purposes other than assisting economic development in the recipient country. If donors do not always use development aid for its stated purposes, what about the recipient countries? In the development aid literature there is a large debate on fungibility that is, there is concern that funds that are earmarked for a specific purpose are being used to finance projects and programs for which they were not originally intended (Feyzioglu, Swaroop, andZhu 1998). It has been estimated that about 11 percent of development aid leaks into military expenditure (Collier and Hoeffler 2007). In 2006 this would have amounted to about $9 billion. Taking this leakage into consideration, we can state that the share of military aid in total aid is greater than the officially reported 23 percent; it is about 32 percent.

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