Overview of defence expenditure trends: evidence from the Baltic States

Abstract

In recent years, security is one of the most important issues in political arena. Every country must ensure internal and external security for its citizens. In this context, the policy-makers have to decide how much to spend on this hot issue. The aim of this paper is to provide empirical insights of defence spending trends and its structural changes over the period of 2007–2013. The authors have employed comparative approach in order to assess the trends of defence expenditure in the context of the Baltic States, such as Lithuania, Latvia and Estonia. To that end, the findings have suggested the following: 1) different trends of defence expenditure and economic growth have been detected within the Baltic States. Lithuania and Estonia have reported a negative association between these indicators, while Latvia has demonstrated a positive one; 2) on the basis of intensity rate, Lithuanian defence expenditure pattern could be characterized as shifting over the analyzed period. It have been some times greater than in Latvia and Estonia; 3) Latvia and Estonia have almost identical structures of defence expenditure, while Lithuania and Estonia have the most significant dissimilarity.