Convergence of Military Burdens in the MENA Region/MENA Bolgesinde Askeri Harcama Yuklerinin Yakinsamasi.

• Author: Yilanci, Veli
• Position: Middle East and North Africa - Report

Introduction

A variety of factors can affect a country's military spending. The literature lists many, including budgetary constraints, political system and ideology, institutional setup, strategic considerations, and so on. The choice of spending on the military also entails an opportunity cost. Resources allocated to defense and military may be used more productively elsewhere to bring about growth and development. (1) Although allocation of resources to the military may crowd-out public spending in other sectors, it may also increase social spending in cases where the military's share in socio-economic life is relatively large. (2) Nevertheless, in an environment where other countries spend on the military, the opportunity cost of zero spending may be extremely high in the form of human, land, and wealth losses. In this respect, states seek to keep up with the military spending of other states that they perceive as threats in order to deter against future aggression. Such behavior is more apparent between hostile neighbors or states in conflict zones, such as in the Middle East and North Africa (MENA) region. Four of the top 20 military spenders (Saudi Arabia, Turkey, Israel, and Iran) are situated in the MENA region, and the latest available data imply that approximately 5% of regional gross domestic product (GDP) on average is spent for military purposes. (3) High demand for military spending, in other words, creates a significant burden on MENA economies.

A basic explanation of the demand for military spending can be made within an action-reaction framework. (4) Considering two hostile countries, each seeks to match or equalize the military spending of the other to deter any possible threat or to match up with the military power of the other in a possible armed conflict. This approach, upon which the arms race model attributed to Richardson is based, (5) proposes three outcomes; both countries continue to build up their arms intensively, both countries disarm, and both countries continue arming up to a point where they achieve a stable equilibrium. (6) Yet, arms races may increase the probability of disputes and wars rather than equilibrium. (7)

Smith's pioneering work incorporates the effects of various factors into the arms race model in explaining the demand for military spending. (8) Smith models social welfare as a function of civilian output and security. (9) Subject to strategic, institutional, and budgetary constraints, the state seeks to maximize this function and to find a balance between the benefits of security provided by military spending and the ensuing opportunity cost due to a loss in civilian output as a result of channeling output to military spending. In brief, if a state wants to sustain its current level of welfare, it should give up a certain portion of its income for military purposes. However, the choice of what portion to be spent on the military is also dependent on the choice of others, as Smith argues, (10) due to the stochastic nature of the relationship between welfare and security, which involves many actors such as bureaucracy, politicians, arms traders, and so on.

There are a number of reasons for the high demand for military spending in the MENA region. In addition to traditional political rivalries and armed conflict based on political and sectarian differences, fundamentalist terrorism and domestic security issues complicate security concerns in the region. (11) Thus, a significant portion of regional income in MENA countries is allocated to the military, creating a considerable burden. Ali and Abdellatif argue that overreliance on abundant natural resources as the engine of the economy may also be another reason for high military burdens in the MENA region, (12) as the survival of the regimes, as well as their roots, are closely linked to the military, especially in oil-producing states. In such countries, the military is deemed the protector of economic order and the income from natural resources, yet it is also a major player in the economy, which shares mutual interests with the private sector through its investments. Thus, the military burden in such countries may be high due to keeping the military present for the continuity of natural-resource income and regimes based on such income. It is further argued that the limited ability of the armed forces in most Arab countries in meeting traditional and new challenges make them "domestic and international burdens" rather than a factor of strategic deterrence both at home and abroad. (13) Hence, it is important to know how the MENA countries react to general regional security concerns in terms of military burdens. As such, the first research question of this study is whether MENA countries show similar behavior during times of regional disturbance and peace; that is, whether the military burdens of individual countries approach the mean regional-military burden.

The military burden of a country may also increase or decrease due to military alliances. States try to act in parallel with their allies in security matters and may choose to spend a portion of their incomes for military purposes, either for fulfilling obligations of alliance treaties or for reciprocity. Smith argues that the nature of alliances may also affect military burden. (14) Although military spending may increase in parallel to the spending of rivals, free-rider behavior in alliances may also decrease military burdens for free riders. Some states may choose to participate in regional and global alliances as a strategic choice and may become free riders by relying on the deterrence capability of the strongest or "leading" ally by spending less on defense. However, it should also be considered that the effect of allies' spending may change according to width, i.e. the number of countries and depth, i.e. military and economic power, the collaborating countries, and to the institutional, strategic, or tactical framework of an alliance. The United States is a major power that has interests and allies in the region. It is also a direct participant in armed conflicts in Iraq and Syria and runs a flexible policy mix of military intervention and strategic diplomacy. (15) Hence, the second research question is whether military burdens in the MENA region are converging to the U.S. military burden. Since Israel is a major U.S. ally in the region, and due to its political differences with other nations in the region (i.e. since Israel is seen both as a threat and an ally), it is also interesting to see whether regional military burdens are converging to the Israeli military burden.

A more logical approach than arms-race modeling is to consider any country in a wider network of rivalry and alliance relationships, which was described by Rosh as a "security web". (16) A security web consists of neighboring countries and all other countries, close or far, that have an influence on a specific country's security considerations. In this respect, the aggregate military burden of a country's security web and, in particular, the aggregate military burden of its "potential enemies" become factors affecting a country's military burden. (17) Strategic responses of individual countries in a security web to changes in one another's behavior or changes in the global environment may differ, (18) but threat perceptions by neighboring countries may be correlated due to such reasons as regional and global events, domestic policy, and foreign policy. Dunne and Perlo-Freeman report that the main determinants of demand for military spending, (19) including neighbors' military spending, internal and external conflicts, democracy, and population, showed little difference during and after a major global strategic event such as the Cold War, with internal conflicts in the post-Cold War era becoming an important factor.

In this study, we take 12 MENA countries (Algeria, Bahrain, Egypt, Iran, Israel, Jordan, Kuwait, Morocco, Oman, Saudi Arabia, Tunisia, Turkey) as a security web consisting of allies and rivals in geographical proximity. A security web framework, as Dunne and Perlo-Freeman argue, (20) is "a particularly useful approach" that accounts for the effects of military burdens of all proximate and distant countries in a security web on the military spending behavior of any country in the web. We use convergence analysis because we assume that military the burdens of countries in a security web in an unstable region such as MENA would increase or decrease in parallel to the behavior of other members of the web. In the first step of the analysis, we test whether the individual military burdens in this security web "catch-up" with the mean military burden of the web. In the second step, we check whether the military burdens of the remaining 11 countries converge to that of Israel. Convergence to the Israeli military burden is important since Israel is the U.S. major ally of and is seen as an adversary by most of the countries in the region. In the third step, we check if the military burdens in the original panel of 12 countries converge to the U.S. military burden since the United States is a major power and an ally for many MENA countries. We also check for structural breaks, as did Dunne and Perlo-Freeman, (21) to check whether any domestic, regional, or international strategic event affects the convergence of military burdens.

We choose convergence analysis as a tool to answer our research questions. Although conceptualized to analyze differences in growth between countries, convergence analysis can be applied to different fields. The aim of all convergence analyses is to determine whether a relatively low-performing (or underdeveloped) country will catch-up with developed countries in the future in terms of income, expenditure, growth, etc. (22) The concept of convergence, which is basically a measure of the speed with which poorer countries catch up with rich...