In the aftermath of the full-scale Russian invasion in Ukraine in 2022,
the European political climate displays to fundamentally be transformed. The
majority of European allies of NATO, committed to proceed on momentous
increases in military spending to contain potential external threats, by
abandoning their exclusive focus on economy, trade and welfare policies of a
long-lasting period of peace on the continent. Despite the important findings emerging from the health financing and defence
economics empirical literature, there is a limited scholarly consensus on the
direct impact of military spending on the main pillar of private health
financing for several countries. In this context, the aim of this paper is to
empirically investigate the direct impact of military expenditure on out of
pocket (OOP) healthcare financing, by using a panel data of the vast majority of NATO countries from 2000 to 2021 and
applying the Generalized Method of Moments (GMM)
estimator. After a series of several econometric tests and robustness checks
that had been applied, the findings of this study show that military
re-armaments positively affect OOP healthcare financing in the NATO Alliance.
On the foreground of a new European political economy scenery with an
unprecedented military spending impetus becoming the norm in several countries,
this study enriches the literature, as well it provides useful insights to
policy-makers that strong commitments for sharp increases in military spending
inevitably confine social and welfare policies.
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