Essays on defense economics
Δοκίμια στα οικονομικά της άμυνας
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Οικονομία της άμυναςAbstract
Security threats in the modern world are determined by the global trends in the first half of the 21st century. The world community is and will remain extraordinarily violent, with the overall economic development that leads to the widening of a gap between rich and poor, between countries and within themselves. The development of the global economy and its complete interdependence creates new forms of vulnerability and the need for security measures. Each government acting on behalf of the public tries to ensure that the military is capable of defending the nation, and promoting peace and safety. A viable approach to national security is to maintain an adequately sized, trained and equipped force that is capable of dissuading, deterring, and – if necessary – defeating a diverse set of future adversaries (Rahman and Siddiqui 2019). Since military power has been proved to be the determining factor for the behavior of states in the international system, the present thesis aims to investigate in today’s world, the nature and importance of military expenditures for a higher degree of security and stability.
Specifically, it explores the enduring confrontation between Greece and Turkey, two NATO allies which have been maintaining though an antagonistic relationship. The ongoing hostility has led many to believe that the countries have been engaged in an arms race, particularly due to the Cyprus conflict in 1974, followed by numerous narrowly avoiding war situations, during which the respective forces were placed on full alert (Matthews 1999; Athanassiou and Kollias 2000). Although a number of researchers have tested the dynamics of Greek – Turkish security relations, the extant mixed results, render the subject open to further deliberation. The aim of this study is to ascertain whether or not the rivalry of the two neighboring countries features an arms race, by using a Bayesian approach applied to a VAR model, for an annual dataset running from 1960 to 2020.
Additionally, the thesis studies the dynamic interdependencies between military expenditures and the real economy for the period 1970-2018, by accounting for the interconnection among the top twelve military spenders. The novelty of this effort lies on the modeling of the dynamic interdependencies of defense spillovers across economic units. The modeling technique builds on the prominent work of Acemoglu et al. (2012) and Pesaran and Yang (2020) and utilizes the network system structure, using a general equilibrium framework. The pervasiveness of each economy in the network is tested following Pesaran and Yang (2020), while the modeling choice of Spatial Vector Autoregressive schemes proposed by these authors, is extended by using a GVAR process, which allows rich and flexible modeling of international shock dynamics, while keeping dimensionality manageable. Finally, based on the selection of dominant entities proposed in Konstantakis et al. (2015) and Tsionas et al. (2016), a robustness analysis is provided for the dominance characterization of each economy (node) in the network.
Furthermore, the dissertation aims to explore whether a country’s military activity shapes the terror sentiments of its inhabitants. Particularly, it investigates how the religious and technological gap between two countries involved in a military conflict, affects the fear about an imminent terrorist episode in the near future, within the borders of the country initiating the attack, and in the wider region. The involvement of Europeans to conflict zones in Syria and Iraq as foreign fighters, makes Europe facing the risk that those individuals having gained combat experience, would return to the continent to perpetrate or coordinate long-prepared and sophisticated large-scale attacks or spontaneous and unpredictable ones carried out by “lone-wolves”. This concern raises the question of how a country’s military activity influences its citizens’ perception to admit that the country or Europe might be vulnerable to serious threats. The study, based on detailed data from 27 European countries and 92,636 respondents for the waves 2005-2006 and 2007-2008, contributes to the literature by offering a comprehensive analysis of the fear sentiment formation in countries involved in a military conflict, focusing on the citizens’ sentiments of the country that attacks because there is a chance of revenge.
Overall, the empirical analysis on the role of military allocations, undertaken in the present thesis, offers useful and novel insights as for a country’s defense policy options in the context of a dynamic international system. The claim that economies plugged into the global chains form their behavior accordingly, based on the network’s activity, finds strong support. Globalization and economic interdependence have intensified it, reminding there is a need for units to reorganize their military plans quickly and adapt to the unanticipated shocks, following appropriate actions. Further, the management of public sentiments and opinions might need to be included as part of a country’s successful policy, since the promotion of safety and solidarity is not associated merely with military strategies.
Department
Σχολή Οικονομικών, Επιχειρηματικών και Διεθνών Σπουδών. Τμήμα Οικονομικής ΕπιστήμηςNumber of pages
159Language
EnglishCollections
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Αναφορά Δημιουργού-Όχι Παράγωγα Έργα 3.0 Ελλάδα
Αναφορά Δημιουργού-Όχι Παράγωγα Έργα 3.0 Ελλάδα