Military aid can take many different forms, including grants, loans, or credits to purchase defense equipment, services, and training. Often military aid is "tied," in that recipients must use the funds to buy defense goods and services from the donor. The aim of military aid is to assist recipients with a variety of security problems. The recipient countries may face a number of different security threats, such as international war, internal rebellion, or terrorism.Military assistance is often supplied to help not only with the recipient’s national security but with regional and global security threats. These international considerations make the study of military aid controversial.
Military aid may imply that this is part of a donor’s official development assistance (ODA). However, aid as defined by the Organisation for Economic Co-operation and Development (OECD) explicitly excludes military aid. The OECD definition ofODA to developing countries includes grants or loans to countries that are undertaken by the official sector in order to promote economic development and welfare. Grants, loans, and credits for military purposes are excluded.
Rather than being part of a donor’s aid budget, military aid is part of the defense budget. Defense expenditure is typically one of the least reliable components of a government’s budget.The level and composition of military expenditures are often treated as state secrets and sizable portions are not open to public scrutiny. Generally, it is hard to study the effect of military aid since data are scarce and unreliable (Brzoska 1995).
See also aid, bilateral; aid, international; aid, international, and political economy
- Alesina, A., and D. Dollar. 2000. ‘‘Who Gives Foreign Aid to Who mand Why?’’ Journal of Economic Growth 5: 33 63.Empirical examination of how donors allocate aid to poor countries.
- Brzoska, M. 1995. ‘‘World Military Expenditures.’’ In Handbook of Defense Economics, vol. 1, edited by K. Hartley and T. Sandler. Elsevier: North Holland, 45 67. Overview of the definition of military expendi ture and the difficulties in compiling statistics across countries and time.
- Collier, P., and A. Hoeffler. 2007. ‘‘Unintended Con sequences: Does Aid Promote Arms Races?’’ Oxford Bulletin of Economics and Statistics 69: 1 28. Provides a general estimation of the demand for military expendi ture and how aid changes this relationship.
- . 2006. ‘‘Military Expenditure in Post Conflict Societies.’’ Economics of Governance 7: 89 107. Theo retical and empirical analysis of the impact of military expenditure in postconflict situations.
- Deger, S., and R. Smith. 1983. ‘‘Military Expenditure and Growth in Less Developed Countries.’’ Journal of Conflict Resolution 27: 335 53. Empirical cross country analysis of how military expenditure affects growth.
- Feyzioglu, T., V. Swaroop, and M. Zhu. 1998. ‘‘A Panel Data Analysis of the Fungibility of Foreign Aid.’’ World Bank Economic Review 12: 29 58. Empirical examina tion of the use of foreign aid.
- McKinley, R. D., and R. Little. 1979. ‘‘The US Aid Relationship: A Test of the Recipient Need and the Donor Interest Models.’’ Political Studies 27: 236 50. Statistical analysis of how the United States distributes foreign aid.
- Organisation for Economic Co operation and Develop ment. http://www.oecd.org/dataoecd/42/30/1860571.gif. A source for data about overseas development aid.
- Stockholm International Peace Research Institute. http://www.sipri.org/contents/milap/. A source for data on worldwide military expenditures.
- U.S. Census Bureau. http://www.census.gov/compendia/statab/foreign-commerce-aid/foreign-aid/. A good source for data about American military aid.
PAUL COLLIER AND ANKE HOEFFLER