The Impact of Military Expenditures on Health Indices in the Middle East; Evidence of Cross-Sectional Panel Convergence

Military spending, education and health are among the most important components of the government budget, and achieving a balance between them is a bit complicated. Increasing military spending can increase or decrease health spending and health status. Therefore, the purpose of this study was to investigate the effect of military spending on health status in Middle Eastern countries.

The present descriptive-analytical and applied study was performed for Middle Eastern countries (including Iran) using the Paneldita method with cross-sectional dependence. Among Middle Eastern countries, 13 countries were selected as the statistical population by systematic sampling method. The data required for the study was an annual time series that was extracted from the World Bank databases for selected countries in 1990-2019. Boys CD, Boys Unit Root (CIPS test), Westerlund aggregation and model estimation with common mean group correlation effect estimators (CCEMG), generalized group mean (AMG), fully modified ordinary squares (FMOLS) and dynamic ordinary squares (DOLS) ) In Eviews 10 and STATA 16 software.

The co-integration results of the models showed that Military expenditures as a percentage of GDP has a negative effect on life expectancy of -0.037 and -0.004 in AMG and CCEMG estimators, respectively, and a positive effect of 0.22 and 1.91 on the mortality rate of children under five years of age in FMOLS and DOLS estimators, respectively. The logarithm of GDP per capita had a positive effect on life expectancy of 0.553 and 0.588 in the AMG and CCEMG estimators, respectively. The annual growth rate of the urban population also had a positive effect of 0.048 on life expectancy with the AMG estimator.

military expenditures as a percentage of GDP had a negative effect on life expectancy and a positive effect on the under-five mortality rate in the Middle East. GDP and urbanization rates also had a positive effect on life expectancy and a negative impact on the under-five mortality rate; Therefore, it is suggested to maintain a certain and appropriate ratio of military expenditures to other social expenditures. Also, some solutions to achieve greater security by reducing military expenditures are proposed.