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Public Choice

, Volume 161, Issue 3–4, pp 321–344 | Cite as

Coups d’état and defense spending: a counterfactual analysis

  • Vincenzo BoveEmail author
  • Roberto Nisticò
Article

Abstract

We explore how institutional set-ups, in particular changes in political institutions through coups d’état, can affect the way military expenditures are determined. We use a counterfactual approach, the synthetic control method, and compare the evolution of the military burden for 40 countries affected by coups with the evolution of a synthetic counterfactual that replicates the initial conditions and the potential outcomes of the countries of interest before exposure to coups. Our case studies suggest that successful coups result in a large increase in the military burden. However, when no effects or a decrease in the defense burden are found, it is often the consequence of a democratization process triggered by the coup. These results are in keeping with recent theoretical developments on the bargaining power of the military in authoritarian regimes. Failed coups, by contrast, produce a smaller, and mostly positive, effect on the military burden, possibly as a result of the incumbent’s strategy to avert further challenges to the stability of the regime by buying off the military.

Keywords

Military expenditure Coups d’état Synthetic control method 

JEL Classification

H11 H56 

Notes

Acknowledgments

We are grateful to Emanuele Ciani, Claudio Deiana, Leandro Elia, Ludovica Giua, Tommaso Oliviero, Matthias Parey, David Reinstein, Ron Smith, Alberto Tumino, Tiziana Venittelli and participants at the 2014 Annual Conference of the Royal Economic Society and at the 2014 Annual Meeting of the European Public Choice Society for their helpful comments. We also thank three anonymous referees for their constructive comments. The usual disclaimer applies.

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.University of WarwickCoventryUK
  2. 2.University of EssexColchesterUK
  3. 3.CSEFNaplesItaly

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