Military spending and IMF fiscal advice: An assessment of surveillance practice, 2008–2023

Abstract

Abstract

This article examines the extent to which the International Monetary Fund (IMF), in its multilateral and bilateral surveillance during 2008–2023, addressed military spending consistently across member states where defense expenditure is macro-critical. Using a comprehensive text review of IMF flagship publications, Regional Economic Outlooks, Article IV consultation reports, and program documents, the analysis assesses the scope, depth, and even-handedness of IMF advice on military expenditure. In the examined documents, this article finds that military spending received limited and uneven coverage for much of the period. Of the 63 countries in which military spending was discussed in bilateral surveillance, fewer than 30 percent featured analysis of macroeconomic trade-offs, with most references limited to brief mentions or factual descriptions. The article finds notable inconsistencies in treatment across countries with similar fiscal conditions and defense burdens, raising questions about even-handedness in surveillance. Where military spending was analyzed, IMF advice focused appropriately on fiscal and balance of payments implications, in line with the IMF’s mandate and its board guidance, while avoiding judgments on national security priorities.