ABSTRACT
This chapter identifies from a quantitative perspective the existence of, and causation involved in, the major arms races of the Middle East and South Asia. It aims to contribute to the literature in two respects. First, as is well known, causality tests are, in general, sensitive to lag lengths. The use of shorter lags than actually existed may distort the causal impact of defense expenditures from one country on those of another. Conventional wisdom stresses regional arms races as the prime culprit in accounting for the staggering military burdens, particularly those accrued by Israel, Egypt, Syria, and to a lesser extent, Pakistan. Several studies have attempted to isolate the factors mainly responsible for militarization in the Third World. C. Hsiao's method combines Granger Causality and Akaike's final prediction error defined as the mean square prediction error, to determine both the optimum lag for each variable and causal relationships.
