Military Spending and Economic Stability in BRICS+ and G7 Countries

Abstract

This paper investigates the economic and geopolitical implications of military spending across two major global blocs: BRICS+ and the G7. While G7 countries exhibit stable, institutionally anchored defense budgets, BRICS+ nations have recently experienced a rapid increase in military expenditures per GDP, driven by economic growth, trade surpluses, and aspirations for greater global influence. Using advanced panel econometric methods, including Two-Stage Least Squares (2SLS), Cross-Sectionally Augmented ARDL (CS-ARDL), and Pooled Mean Group (PMG) estimators, the study analyzes the macroeconomic drivers of military spending, fiscal trade-offs, and strategic consequences in both blocs. Results show that GDP is the dominant and most consistent determinant of defense spending. G7 countries display strong long-run elasticity but low short-run responsiveness, potentially reflecting institutional inertia. In contrast, BRICS+ defense budgets are more responsive to economic and fiscal fluctuations yet show weaker long-run stability. Inflation, fiscal balance, and external accounts exhibit heterogeneous effects. The findings reveal how developmental stages influence the balance between military ambitions and economic priorities.

Keywords

• G7
• BRICS
• military spending
• panel data

BRICS+ ve G7 Ülkelerinde Askeri Harcamalar ve Ekonomik İstikrar

Öz

Bu çalışma, BRICS+ ve G7 olmak üzere iki büyük küresel blokta askeri harcamaların ekonomik ve jeopolitik etkilerini incelemektedir. G7 ülkeleri kurumsal olarak yerleşik ve istikrarlı savunma bütçelerine sahipken, BRICS+ ülkeleri son yıllarda ekonomik büyüme, dış ticaret fazlaları ve küresel ölçekte artan nüfuz arayışları doğrultusunda GSYH’ye oranla hızla artan askeri harcamalar sergilemektedir. Çalışma, askeri harcamaların makroekonomik belirleyicilerini ve dinamiklerini ve jeopolitik sonuçlarını gelişmiş ve yükselen ekonomiler bağlamında karşılaştırmalı olarak analiz etmektedir. İleri düzey panel ekonometrik yöntemler (2SLS, CS-ARDL ve PMG tahmincileri) kullanılarak yapılan analizler, GSYH’nin askeri harcamaların en güçlü ve tutarlı belirleyicisi olduğunu göstermektedir. Ampirik sonuçlar değerlendirildiğinde, G7 ülkelerinde uzun dönem esneklik yüksek, kısa dönem tepkisellik ise düşüktür; bu durum kurumsal ataleti yansıtabilmektedir. BRICS+ ülkelerinde ise savunma bütçeleri ekonomik ve mali dalgalanmalara daha duyarlıdır, ancak uzun vadede savunma bütçeleri daha kırılgandır. Enflasyon, bütçe dengesi ve dış denge gibi faktörlerin etkisi bloklar arasında farklılık göstermektedir. Bulgular, kalkınma aşamalarının savunma-ekonomi dengesine etkisini ortaya koymaktadır.

Anahtar Kelimeler

• G7
• BRICS
• askeri harcamalar
• panel veri

Kaynakça

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