The activity of war has existed throughout the length of human history, occurring between and within nationstates as well as other types of political units. Although war is one of the most destructive of human endeavors, much remains to be understood about war and its effects on economies, cultures, and the environment. The human cost of war is often explored and perhaps the most obvious effect to observe in terms of the direct costs of war. However, there are other long term effects of war that have not been satisfactorily explored and that continue to deeply affect citizens, as well as their communities and their countries. These include but are not limited to the multiple effects of war on international, local, and regional political climates, cultures, state resources, environmental health as well as the health of citizens, institutional constructs, and economies. The health of a state’s economy relates directly to the stability of that state and the health of its citizens. War destabilizes states and compromises the health of citizens, as well as diverts funds to war activities and away from other forms of investment. The profitability of investing in war is a topic that remains open to debate among scholars today as there remains to be found a satisfactory explanation that encompasses the costs and benefits of war. One possible benefit of war is the enhancement of state security. However, the question of whether or not war truly improves the security of states has not been definitively answered. With so many questions still unresolved about the effect of war on state economy, it is crucial to keep examining the evidence that is available.
This research explores the relationship between increases in military spending (Milex) during war and the economic performance of nation-states. As prior research is inconclusive, a statistical analysis of updated data is conducted. Data gained from previous studies regarding war spending and the growth of nation-states is utilized. The theory predicts an initial positive relationship between military war spending and economic performance, which plateaus and is followed by a negative relationship that is inversely related to the duration of the war. The multiple regression analysis revealed no significant correlations and no linear relationship was observed between the response variables and the parameters. After computing the OLS correlations, a weak positive correlation was observed between the cost and duration of a war for all wars across the entire sample, and a slightly stronger correlation between these variables was observed for inter-state and extra-state war alone. A moderate correlation was observed between duration and battle deaths for civil wars. Utilizing simple t-tests, a significant decrease in average short-term growth rates (during war) was observed over the entire sample, averaging 1.2%. After war, the average increase in military spending across the sample is 19%, suggesting that increases that occur during war may not return to pre-war levels. The possible long-term economic impact of such increases in Milex, although a subject of contemporary examination, is in need of further exploration.