This paper considers the interpretation of the empirical results of the developing literature on the demand for military spending that specifies a general model with arms race and spill-over effects and estimates it on cross-section and panel data. It questions whether it is meaningful to talk...

Countries that spend scarce resources to import arms from abroad often require arms sellers to 'reinvest' part or all of the proceeds back into the arms-importing country. These so-called 'arms trade offsets' are therefore thought to enhance domestic economic development. But does this process...