Defense expenditures - economic growth relationship in Turkey with theoretical and empirical evidence

Following the end of the Cold War, September 11 terrorist attacks have led to ethnic, religious and nationalist conflicts in many parts of the world. Since Turkey's geopolitical and geostrategic position, having rich energy sources, close to the Middle East and a bridge between the East and West, it has been the center of attention of global powers throughout history. In this context, Turkey is directly or indirectly affected by the internal and external threats, terrorist attacks. In the face of terrorist attacks, Turkey devotes a significant share of the state to defense expenditures to maintain the independence and integrity of the state. The allocation of a share for defense expenditures from national income has different effects on the economy. The relationship among defense expenditures and economic growth has attracted the attention of many researchers and there is a significant number of studies approaching the subject with various techniques. However, there is no consensus between scientists as to whether defense expenditures trigger economic growth, efficiency and other macroeconomic indicators. The purpose of this study is to examine the possible effects of defense expenditures in Turkey on economic growth between 1990-2021 using the model of Barro (1990). In the study, the distributed authority (ARDL) and Bayer-Hanck (2013) methods were used to test the cointegration relationship between the variables. After this, the long -term coefficient based on the smallest and dynamic ordinary squares (DOLS) model was estimated. As a result of the study, it was found that defense expenditures affect growth negatively. A positive relationship was found between population, human capital and gross fixed capital investments and growth. As a result, it was concluded that the Neo-Classical approach was valid instead of military Keynesian approach between 1990-2021 periods in Turkey. Keywords: Barro (1990) Model, Economic Growth, Defense Expenditures, Time Series Analysis