Defence Outlays Across Countries: Are They Converging?

Although the countries in the present world are staying away from formal wars like that of the First and the Second World Wars, still there has been persistence of informal wars among countries. The countries are now observed to be investing upon defence items in a larger way. The so-called backward countries are coming in a strong way in terms of increasing defence outlays and trying to catch up with the advanced countries in possessing military items. The present article, thus, tries to study whether the countries are converging in terms of per capita military expenses across a selection of 45 countries for the period 1988–2013. It reveals that there are absolute β and σ convergence among the countries with Kuwait and South Africa as outlier countries. It also observes conditional β convergence among the countries with various resources, particularly, crude oil production, regional dummies and time trend as significant conditional variables. JEL: H56, O47, C13, O50