The Defense-Growth Paradigm: An Economic Investigation into Post-Soviet States.

One of the important questions stemming from the collapse of the Soviet Union is how the post-Soviet decline in defense spending will impact the economic performance of the 15 states of the former Soviet Union. Using a nonlinear production function for direct effects, and models of investment and employment for indirect effects, the defense-growth paradigm is investigated using data from the states of the former Soviet Union for 1992 to 2006. The findings show that the continued reliance on the defense sector in post-Soviet states has hindered economic growth in 6 of the states, while the remainder show a positive relationship between defense spending and economic growth. A negative association is also apparent in the indirect influence on growth through investment and employment due to crowding out in the economy. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]