Does military expenditure determine Fiji's exploding debt levels?

Paresh Kumar Narayan, Seema Narayan

Research output: Contribution to journalArticleResearchpeer-review

21 Citations (Scopus)

Abstract

Fiji's total debt stands at 65% of GDP. Domestic debt constitutes 55% of GDP. The goal of this paper is to investigate whether military expenditure has contributed to Fiji's exploding debt levels over the period 1970 to 2005. Our empirical analysis, conducted within a cointegration and vector error-correction framework, suggests that, in the long-run, military expenditure has had a statistically significant positive impact on both external debt and domestic debt, while income has had a statistically significant positive impact on domestic debt and a statistically significant negative impact on external debt. We explain the reasons behind this finding and draw some policy implications.

Original languageEnglish
Pages (from-to)77-87
Number of pages11
JournalDefence and Peace Economics
Volume19
Issue number1
DOIs
Publication statusPublished - 2008
Externally publishedYes

Keywords

  • Cointegration
  • Debt
  • Fiji
  • GDP
  • Military Expenditure

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