Military Expenditure and Economic Growth Relationship Revisited in Some South Asian Countries

Abstract

To protect the motherland from foreign invasion, to maintain peace and stabilize border tension, to maintain a balance of strength among neighboring countries, military expenditure is inevitable. On the other hand, if huge money is spent to continue the war game with neighboring countries that shrinks the funds available for investing in health, education, infrastructure, and industrialization. Under this controversy, some researchers feel increase in military expenditure raises national income through multiplier effect, but another group thinks it crowds out investment for generating employment and reduction of poverty especially in developing countries. In this chapter an attempt has been taken to investigate the relation between military expenditure and its impact on economic growth of some South Asian nations (e.g., India, Pakistan, Sri Lanka, and Bangladesh) by giving special importance to India.