Coups d’état and defense spending a counterfactua

Authors: Vincenzo Bove Roberto Nisticò

Publish Date: 2014/10/10

Volume: 161, Issue: 3-4, Pages: 321-344

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Abstract

We explore how institutional setups 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 militaryWe 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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