Security and Development in Developing Countries

Abstract

This paper examines the impact of security on economic development in developing countries. Based on data from the World Bank, we use a sample of thirty-eight developing economies and find that security does affect development in these countries. We observe that the coefficient estimates of two explanatory variables do not have their anticipated sign due possibly to the slight degree of multicollinearity between them. Regression results show that over three-quarters of cross-developing country variations in purchasing power parity per capita gross national income can be explained by its linear dependency on the number of intentional homicides, the number of refugees hosted by a country, military expenditures as a percentage of GDP, the adult literacy rate, the agricultural value added per worker, the share of manufactures in total merchandise exports, net foreign direct investment, net official development assistance, the share of agricultural land in the total land area, the share of public health expenditures in total health expenditures, and the share of youths 15 to 34 years old in the total population. Statistical results of such empirical examination will assist governments in developing countries identify security and other issues that need to be effectively dealt with in order to stimulate economic development.