An analysis of the determinants of defense expenditure in Thailand (1992-2022)

Abstract

A nation's defense budget reveals its security anxieties and projected military strength. While Thailand ranked 27th globally in 2022, and 3rd in Southeast of Defense spending, the value and necessity of nation’s defense budget are a public debate, and the factors that are related are crucial in political science and economics due to their significant impact on the nation's economy and society. Understanding defense expenditure is vital to public policy and other fields, encompassing studies on its connection to economic impact, its key determinants, and its spending patterns. This study delves into how Thailand's defense expenditure from 1992 to 2022, has been shaped by both internal and external factors. Using an autoregressive distributed lag (ARDL) model, the results explore how the adapted model from the neo-classical perspective, Keynesian, and other theories influence military spending in Thailand. The results of the study illustrate that the determinants of defense expenditure in Thailand can be extended to four factors. Economic growth, national security concerns, political factors such as protests, and coups all play crucial roles in determining how much Thailand invests in its military and population growth. The proposed model helps to identify how changes in GDP, income inequality, external threats, and political status impact defense budgeting. By estimating the coefficients, the ARDL model can provide insights into the relative significance of these factors in determining defense budget policy and reforms. Moreover, the findings contribute new knowledge to the field of public policy and economics domestically and abroad. The proposed model can be an alternative tool for effective budget allocation and reforms.