Military expenditures and political regimes: Evidence from global data, 1963–2000 ☆ Ünal Töngür a, ⁎, Sara Hsu b,1 , Adem Yavuz Elveren c,2 a Middle East Technical University, Ankara, Turkey b State University of NY, New Paltz, USA c Keene State College, NH, USA abstract article info Article history: Accepted 2 October 2014 Available online xxxx Keywords: Military expenditure Income inequality Economic growth Political regime Democracy Dictatorship This paper examines the determinants of military expenditures with a special focus on political regimes for more than 130 countries for the period of 1963–2000 by employing a dynamic panel data analysis. The paper aims at contributing to the literature by utilizing a recently constructed political regime data set and controlling for income inequality, a key variable that has not received substantial attention in the context of political regimes, economic growth and military expenditures. Covering a large set of countries and an extended time period, the paper reveals further evidence on the linkage between democracy and military expenditures. Our results yield two crucial facts. First, social democratic political regimes have a tendency to spend less on armaments as a share of the national income; compared to social democracy, all other political regimes are likely to have higher military burdens, confirming previous findings of the negative relationship between level of democracy and military burden. Second, the analysis shows that a higher income inequality is associated with a higher military burden. © 2014 Elsevier B.V. All rights reserved. 1. Introduction This paper aims at analyzing the determinants of military expendi- tures with a special focus on political regimes for over 130 countries during the period of 1963–2000 by using a dynamic panel data analysis. There are different theories that explain the relationship between mili- tary expenditures and political regimes, going back to Immanuel Kant's wisdom that reduced military spending would promote peace and pros- perity as countries avoid conflict spirals and devote resources to social spending; representative governments would perpetuate peace. Mostly using the Polity database, a vast empirical literature has shown the negative relationship between level of democracy and military expendi- tures. However, there are two shortcomings of this literature. First, only one classification, on a binomial or continuous variable, is used for polit- ical regimes in most of these studies, ignoring clear differences between political regimes that cannot be ranked on this type of continuum. Second, the role of income inequality, as a crucial control variable due to its possible linkage with military expenditures, has been ignored in the context of military expenditures and political regimes. Considering these two issues, in this study we utilize a recent political regime data set that separates out political regime by type beyond the categories of democracy and dictatorship. The classification we use includes the categories social democracy, conservative democracy, one- party democracy, dictatorship, military dictatorship, civil war, and communist. These are qualitatively different regimes, and each has distinct characteristics pertaining to government ideology and gov- ernment expenditure. We also incorporate two different measures of income inequality in order to better understand the military ex- penditure–political regime nexus. In addition to confirming some expected results yielded by earlier studies (such as the positive relationship between military expenditures overall and military expenditures of foes and external threats, and income inequality), our findings show the negative relationship between military bur- den and the military expenditures of allies, and economic growth. Also, regardless of the model specifications, we find a signi ficant, negative relationship between democracy and military burden based on our political regime data set. Following this section we provide a brief literature survey on the nexus of military expenditures–political regimes. Section 3 introduces data and methodology. Section 4 presents results and discussion. Finally, the last section is reserved to summarize our findings. Economic Modelling 44 (2015) 68–79 ☆ This paper is a revised version of a working paper by Tongur, Hsu and Elveren (2013). We would like to especially thank our anonymous referees and James K. Galbraith, Julide Yildirim, Erol Taymaz and Nadir Ocal for their valuable comments. The usual disclaimers apply. ⁎ Corresponding author. Tel.: +90 312 210 3090. E-mail addresses: tongur@metu.edu.tr (Ü. Töngür), hsus@newpaltz.edu (S. Hsu), ademyavuzelveren@gmail.com (A.Y. Elveren). 1 Tel.: +1 845 257 2945. 2 Tel.: +1 845 245 7240. http://dx.doi.org/10.1016/j.econmod.2014.10.004 0264-9993/© 2014 Elsevier B.V. All rights reserved. Contents lists available at ScienceDirect Economic Modelling journal homepage: www.elsevier.com/locate/ecmod