Coups d'état and Defense Spending: A Counterfactual Analysis

We present a case study analysis of the impact of coups d'état on defence spending. We use the synthetic control method and compare the evolution of the defence burden for countries affected by coups with the evolution of an artificial control group. We find that successful coups determine a large increase in defence burden, as they directly affect the bargaining power of the military. When no effects or a decrease in the defence burden is found, it is often the consequence of a democratisation process triggered by the coup. Failed coups, instead, produce a smaller, and mostly positive, effect on military burden, possibly a result of coup-proofing strategies. The presence of country-specific dynamics calls for in-depth analyses of single units, to detect particular mechanisms that are averaged out in the aggregate.