Abstract
This study aims to analyze the relationship between military spending, fiscal balance, and the level of peace in the
member states of the European Union and NATO during the period 2014–2024. By applying panel econometric
methodologies, the study seeks to assess whether military spending is a significant determinant of the budget deficit and
whether a higher level of peace, as measured by the Global Peace Index (GPI), contributes to greater fiscal stability.
Using data collected from the SIPRI, the Institute for Economics and Peace, and Quality of Government databases,
fixed-effects and random-effects panel models were employed, with the optimal model selected based on the Hausman
test. The results indicate that, when controlling for country-specific factors, military spending does not have a
statistically robust impact on the budget deficit. In contrast, a higher level of peace is consistently associated with
lower budget deficits. These findings suggest that fiscal sustainability is influenced to a greater extent by institutional and structural factors associated with peace than by the absolute level of military spending. The study helps fill a gap
in the literature on the economics of peace and sustainable development, highlighting the role of peace as a stabilizing factor for public finances.
member states of the European Union and NATO during the period 2014–2024. By applying panel econometric
methodologies, the study seeks to assess whether military spending is a significant determinant of the budget deficit and
whether a higher level of peace, as measured by the Global Peace Index (GPI), contributes to greater fiscal stability.
Using data collected from the SIPRI, the Institute for Economics and Peace, and Quality of Government databases,
fixed-effects and random-effects panel models were employed, with the optimal model selected based on the Hausman
test. The results indicate that, when controlling for country-specific factors, military spending does not have a
statistically robust impact on the budget deficit. In contrast, a higher level of peace is consistently associated with
lower budget deficits. These findings suggest that fiscal sustainability is influenced to a greater extent by institutional and structural factors associated with peace than by the absolute level of military spending. The study helps fill a gap
in the literature on the economics of peace and sustainable development, highlighting the role of peace as a stabilizing factor for public finances.
Cuvinte cheie
Global Peace Index
Military Expenditure
Budget Deficit
Panel Data Analysis
Sustainable Development
Istoric articol
Publicat
26.06.2026
Informații autori
Citare recomandată
CIPRIAN-DANIEL RUSU (2026). THE ANALYSIS OF THE RELATIONSHIP BETWEEN THE GLOBAL PEACE INDEX AND MILITARY SPENDING IN EUROPEAN STATES. Constantin Brâncuși University of Târgu Jiu Economics Series, 1(3), 392–401. https://doi.org/10.65631/jes.3.2026.37
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