The impact of defense expenditures on social wealth expenditures: A comparative analysis of Turkey with NATO member states in the post-Cold War period

Despite the end of the Cold War, defense services still maintain their importance and the expenditures in this field are constantly increasing. This situation creates a serious burden on the limited budgets of countries. This raises the question of how much of the scarce resources should be allocated to defence. Because it makes it necessary to determine an optimal level of defense expenditure in the face of the "opportunity cost" caused by defense expenditures. In other words, allocating more resources to defense services requires giving up social welfare services (education, health and social security). In this study, it is aimed to determine the trade-off relationship between defense expenditures and social welfare expenditures (education, health and social security) and the direction of this relationship. In this direction, 27 NATO member countries were included in the analysis based on the 2000-2019 period. The analysis was performed using System Generalized Moments Method (System-GMM), which is one of the dynamic panel data models. Within the scope of this method, three different models were established. In Model-1 which examines the relationship between defense expenditures and public education expenditures of 27 NATO member countries, a significant and positive relationship was found between both variables. In Model-2 which tests the relationship between defense expenditures and public health expenditures, it has been determined that there is a significant and positive relationship between these variables. However, in Model-3 where the relationship between defense expenditures and total social welfare expenditures was analyzed, a significant and negative relationship was found between both variables.