Trade-offs Between Defence and Education/Health Expenditures in Developing Countries

It is commonly believed that defence expenditures have a particular ability to compete government financial resources away from other activities, especially education and health. This article uses a number of methods to test for the existence and strength of such trade-offs in a large number of LDCs. Cross- sectional analysis of government expenditures found that few countries which were low defence spenders were high spenders on education/health (and vice versa). Defence expenditures were no less vulnerable to overall budget cuts, nor more likely to gain from budget increases than education and health. Finally, a longitudinal regression analysis for twelve Asian countries revealed little evidence of trade-offs We discuss some of the reasons why our analysis may not support the conventional view on trade-offs and, finally, make a number of suggestions concerning future research on this topic.