Military expenditure in developing countries raises complex questions regarding growth, development, security and governance. This chapter provides an analytical survey of the effects and causes of defense spending in developing economies. Using stylized facts, theoretical models and empirical results, it discusses some core aspects of the interrelationship between defense and development. The chapter emphasizes two major issues in the field: economic growth and defense spending; security and development. Although the issues are placed in a broad framework, the focus of the chapter is on economic aspects of the interaction of military expenditures with growth and developmental factors.
