Senan Abid Political Economy Analysis of Military Spending in the Middle East ZÖSS ZENTRUM FÜR ÖKONOMISCHE UND SOZIOLOGISCHE STUDIEN ZÖSS-Discussion Papers ISSN 1868-4947/123 Discussion Papers Hamburg 2025
Political Economy Analysis of Military Spending in the Middle East Senan Abid Discussion Paper ISSN 1868-4947/123 Zentrum für Ökonomische und Soziologische Studien Universität Hamburg November 2025
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[email protected] Universität Hamburg Fakultät für Wirtschaftsund Sozialwissenschaften Fachbereich Sozialökonomie Welckerstr. 8 20354 Hamburg
Abstract This study analyzes the determinants and dynamics of military spending in the Middle East within the framework of critical political economy, based on data covering the period (19952023). The analysis combines approaches from political economy, the rentier-authoritarian state theory, and critical geopolitics to explain the link between armament, authoritarian structures, and international alliances rather than objective security threats. The findings suggest that the persistently high levels of military spending in the region are largely used as instruments to maintain power structures and sustain strategic alliances, rather than merely to enhance defense capabilities. The diversification of arms suppliers toward Russia and China appears not to have reduced dependency but instead to have added further logistical and strategic complexity. The study also indicates a tendency toward a negative association between military spending and the indicators of democracy, development, and political stability, highlighting the prevailing priority of “regime security” over “state security.” Overall, the paper argues that patterns of armament in the Middle East reflect a hybrid politicaleconomic configuration that perpetuates the security dilemma at both the regional and international levels. Key words: Political Economy; Military Spending; Middle East; Rentier State; Authoritarianism; Security Dilemma; Geopolitics; International Alliances
1 1. Introduction The Middle East has been one of the most geopolitically turbulent regions since the midtwentieth century, where regional conflicts, international rivalries, religious and ethnic identities, and complex economic and strategic interests have all intertwined. This reality has produced a fragile security structure based on the logic of power and deterrence rather than cooperation. Since the mid-1990s, military spending in the region’s countries has remained among the highest in the world as a percentage of GDP, often linked to regional power balances and alliances with international powers. (SIPRI Yearbook 2023 | SIPRI, n.d.). It is worth noting that the concept of security in the region has developed in a way that does not separate internal from external security, as traditional security threats (such as inter-state conflicts whether border or regional and the arms race to maintain a balance of deterrence) have merged with non-traditional threats (such as terrorism, proxy wars, religious-sectarian divisions, and state collapse). This overlap has produced a security structure that justifies the continuation of high levels of military spending1 , even during periods when some countries in the region declare priorities for development and economic reform (Harari, 2017). At the beginning of the twenty-first century, the importance of the Middle East increased in global geopolitical calculations due to its strategic location and its possession of key economic resources such as energy, water, cheap labor, and untapped economic assets. In addition, it represents a large market for the distribution of products. Therefore, the Middle East is considered a zone of intense competition between the United States on one side and Russia and China on the other (Gök and Ekici, 2024). From the above, it can be said that examining military spending in the Middle East apart from the geopolitical context and the international political economy would inevitably lead to an incomplete understanding. Military spending is not merely a financial variable in the state’s budget in this region; it is a component of power structures, resource redistribution, and the state’s strategy and position within the regional system and international alignments. Hence, there is a need to study this issue from the perspective of the political economy of armament, which allows for understanding the relationship between military spending, international alliances, the rentier economy, and the building or weakening of institutions in the region’s states. Accordingly, the main question of this paper can be formulated as follows: What are the geopolitical, economic, and political determinants that shape the patterns of military spending in Middle Eastern countries, and how do they interact to reproduce the regional armament system? From this main question arise the following sub-questions: How does the U.S versus Russian/Chinese rivalry contribute to shaping the armament strategies of Middle Eastern countries? 1 The average military spending as a percentage of GDP in most countries of the region during the study period reached more than 4%, compared to the global average of 2.2% of world GDP (SIPRI, 2024a).
2 What is the relationship between the nature of the political system (rentier, authoritarian, hegemonic) and the level of military spending? How does military spending affect the “security versus development” equation in the region? Is military spending used as a tool to strengthen state security or the security of the political regime? To what extent does the diversification of arms sources represent a move toward strategic independence or a reconfiguration of multidirectional dependency? Through the previous questions, this paper seeks to fill a research gap by analyzing military spending in the Middle East from a political economy perspective rather than relying solely on econometric approaches. Most of the existing literature has adopted econometric methods that focus on the effects of military spending on macroeconomic variables such as economic growth, unemployment, and economic development, among others. (Bailes and PerloFreeman, 2016; Becker and Dunne, 2021; Dendy Pramana Putra et al., 2024; Dunne † et al., 2004; Dunne and Smith, n.d.). Although those studies are important, they have neglected the structural and political context that explains why such a high level of spending exists in the first place. Therefore, this paper does not aim to measure the impact of military spending on macroeconomic variables a perspective already addressed by many econometric studies but rather seeks to understand the structural and political dimensions of military spending and its connection to regional power balances, international influence, and the internal structure of the state. In other words, it focuses on the structural causes of military spending rather than its direct effects on other variables. Building on the above, this paper advances a multidimensional analytical approach that links the political economy of armament with state structure and regional power dynamics. It highlights how the interaction between domestic regime logics and international alignments shapes the security discourse and the allocation of military resources in the Middle East. The next section, therefore, reviews the existing literature within the broader structural context of armament in the Middle East. 2. Review of Previous Literature and the Structural Background on Armament in the Middle East To study the political economy of military spending in the Middle East and the role of international alliances in armament, this analysis begins by dividing the region into two main axes: the first axis is allied with the United States as the dominant power in the regional armament equation, while the second axis represents the alliance with both Russia and China as balancing powers in the regional armament equation of Middle Eastern countries. The discussion then moves to the dynamics of competition between these two axes and their role in shaping regional armament.
3 2.1 The First Axis: The United States as the Dominant Power in the Regional Armament Equation Since the end of World War II, the United States has played a central role in shaping the regional security equation in the Middle East through the establishment of networks of military and political alliances, as well as by creating bases and maintaining a direct military presence in the region. As a result, it has become the largest arms supplier to the region. Reports from the Stockholm International Peace Research Institute reveal that more than 52% of arms imports to the Middle East during the past decade came from the United States (“SIPRI,” 2024b), a percentage that reflects the position of the United States as the region’s primary “security provider.” The United States has used its major role in arms sales as a tool of political influence and a means to strengthen security dependence on Washington. It has also employed this role to reproduce the security system through military training and the restructuring of military doctrine in several countries, ensuring that security models are either aligned with or at least not in conflict with U.S. strategy. These arms sales have also been linked to specific conditions and guided military doctrines, as the United States has promoted armament patterns that do not allow full strategic independence for importing countries whether through maintenance systems that require American expertise or through technical limits imposed on certain types of supplied weapons (Akkas and Altiparmak, 2022). Moreover, the United States has used arms deals as part of its “security assurance” strategies (for example, with the Gulf states) in exchange for the continued flow of energy and the stability of oil markets. However, one of the main contradictions in U.S. policy lies in its simultaneous promotion of development and economic reform discourse while encouraging massive military spending. This pattern reflects a developmental trade-off, consistent with the findings of (Dunne and Tian, 2013) and supported by (Abid, 2025). This places the region in a dual position of trying to balance national development priorities with continued dependence on costly armament (Akkas and Altiparmak, 2022). 2.2 The Second Axis: Russia and China as Balancing Powers in the Regional Armament Equation Russia seeks to reposition itself as a major player in the arms market of the Middle East, especially after its military intervention in Syria in 2015, which marked a turning point in its regional status. This intervention gave Russia the image of a security guarantor for its allies, not merely an arms supplier. This role has strengthened the confidence of some countries in Moscow as a security partner capable of providing a strategic protection umbrella when needed.(Trenin, 2016). Russia has also expanded its exports of advanced air defense systems, such as the S-300 and S-400, which have been considered high-value alternatives to U.S. defense systems in the context of efforts to diversify arms sources (Denisentsev and Makienko, 2023). Russia’s role has not been limited to arms deals but has also extended to attempts to influence the structure of regional security by offering diplomatic and strategic alternatives to the U.S. security umbrella. Russia has promoted the idea of multilateral security arrangements that
4 include the Gulf states, Iran, and Turkey, in an effort to reshape regional security outside the framework of U.S. unilateralism (United Nations, 2019). China, on the other hand, has taken a different and more pragmatic path, as it has not presented itself as an alternative power to the United States in matters of security (Fulton, 2021), Rather, it has positioned itself as a power that offers countries a margin of maneuver to reduce their one-sided dependence on Washington in form, while in substance its involvement is based primarily on economic penetration, followed gradually by security engagement. The “Belt and Road Initiative” (BRI) has given China a new chapter of influence in the region through investments in ports, roads, energy, and infrastructure (Shaheen and Mangi, 2024). China has also begun to expand its security presence, whether through the sale of military equipment particularly drones or through limited defense cooperation agreements. (Wonjune, 2020) (Shaheen and Mangi, 2024). While China’s recent moves in arms sales and defense partnerships might appear as a delayed replication of the U.S. pattern, its sequencing is notably different. Beijing’s approach follows an “economy-first, security-later” logic where economic entrenchment precedes and enables gradual security influence unlike Washington’s “security-first” architecture (Rolland, 2017). This conditional asymmetry has made China an attractive partner for states seeking strategic diversification without overt political alignment. 2.3 The Dynamics of Competition Between the United States and Russia/China and Its Role in Regional Armament The competition between the United States on one side and Russia and China on the other has led to the emergence of a new pattern of balancing relations in the Middle East, where some countries have moved toward diversifying their sources of weapons and alliances in order to increase their negotiating power. Instead of the earlier model of single-source dependence on the United States, a trend has developed that can be described as a security multi-sourcing strategy, which reduces the risks of relying on only one supplier (Corporation, 2022). The presence of multiple international power alignments (the United States versus Russia and China) in the Middle East, along with the region’s geopolitical nature, has contributed to increasing armament levels overall. (SIPRI, 2025) It appears that international competition over the Middle East has not genuinely contributed to enhancing security autonomy; instead, conflicts have increased and varied in intensity (Iraq, Iran versus Saudi Arabia, and what came to be known as the Arab Spring…). This has raised the cost of security and increased the complexity of regional dynamics. The more diversified the sources of weapons become, the greater the need for complex logistical, doctrinal, and technological coordination (Stavrianakis, 2025). Therefore, the role of diversifying arms sources must be examined in terms of whether it enhances independence or creates multidirectional dependency. Based on the above, it can be said that these international powers do not “sell weapons” as a purely commercial activity; rather, they sell entire security models that include military doctrines, alliance structures, and strategic commitments. This is what makes military spending in the Middle East more than a financial or defensive decision it is a political decision
5 linked to reproducing authoritarian structures internally and shaping the state’s international alignment externally. The security environment in the Middle East is complex and extends beyond the traditional boundaries of national security to take the form of a “fragile regional security system” in which internal and external threats overlap and in which the interests of states intersect with those of international powers. The regional landscape is built on temporary, bilateral, or trilateral alliances that shift according to political contexts, making regional security closer to a “theater of interest-based balances” than a cooperative security system. On a smaller scale, the political-security scene among the region’s countries has been shaped by alliances built on overlapping national interests and international alignments. The most prominent of these alliances include (Giegerich et al., 2022): An axis between Iran and Syria (before the collapse of the AL Assad regime) and Shi’a forces in Yemen, Lebanon, and Iraq, positioned against Israel. An axis led by two major Gulf powers, Saudi Arabia and the United Arab Emirates, supported by other states. An Islamist–populist axis led by Turkey and Qatar seeking to support Islamic parties throughout the region and beyond. These regional axes broadly map onto the larger international alignments. The Gulf-led axis has remained closely tied to the U.S. security umbrella through defense agreements and arms procurement, whereas the Iran-Syria-Shi’a axis has increasingly relied on Russia and China for military and diplomatic backing. Meanwhile, the Turkey-Qatar partnership occupies an intermediate position, maintaining economic relations with both blocs while seeking autonomous regional influence, a position complicated by Turkey’s formal membership in NATO (Fulton, 2019).This multidimensional, multi-actor competition among these axes has taken various forms, ranging from direct conflict to blockades and ideological, doctrinal, and political media campaigns as a form of mass mobilization. This ongoing conflict has also placed the region in a state of persistent security dilemma, where each country seeks to strengthen its military capabilities to ensure its own security, yet such increases are viewed by other states as a threat, prompting them in turn to raise their military spending. This creates a continuous competitive cycle that fuels the arms race, which ultimately serves the interests of the military-industrial complexes of the allied powers that supply the region in the first place. In addition, proxy warfare contributes to intensifying this security dilemma, as the region has become an open arena for conflict among regional and international actors who sustain and deepen internal divisions. The collapse of the state in parts of the region such as Iraq, Libya, and Yemen (and more recently Syria) has also led to the emergence of non-state armed actors, resulting from weakened institutions and the fragmentation or collapse of national armies. These new militias received various forms of support from major international powers and other actors (Pettersson and Öberg, 2021), turning them from regional threats into global security concerns. This context has reshaped the very notion of security. In such environments, military spending is not directed toward improving state defense capabilities; rather, it is often used to fund
12 and Iran. This pattern supports both the second and sixth hypotheses: the lower HDI and weaker political stability among China/Russia–allied states suggest that sustained military spending in rentier or authoritarian contexts diverts resources from development and institutional reform, constraining long-term performance under persistent security pressures and sanctions. The results also show that the democracy index is less negative in the American group −2.92 compared to the eastern group −3.13, which means a relavely higher degree of polical openness despite the continuation of authoritarian tendencies in both cases. With regard to political stability, the average is −0.63 in countries allied with the United States, compared to −1.01 in the eastern camp, indicang relavely greater instuonal coherence among U.Sallied states. This pattern supports the second and fifth hypotheses, as it suggests that regimes maintaining stronger external security alliances experience relatively higher internal stability, while those engaged in multidirectional alliances often under greater external pressure display weaker institutional resilience and deeper authoritarian consolidation. As for dependence on oil, it is slightly higher among the American allies 17.78% compared to the eastern ones 14.47%, which reflects the dominance of oil economies in the Western alliance, especially in the Arabian Gulf. This confirms the validity of the second hypothesis. In general, these indicators show that the American alliance in the Middle East is associated with higher economic, developmental, and institutional capacities, especially in the Gulf states, which are considered rentier states that rely mainly on oil, which enables them to cover their military expenditures from large oil revenues. Meanwhile, the eastern alliance reflects a more fragile and tense defense–political model, characterized mainly by low development and weak institutional stability. 6. Conclusion In light of the study data and its descriptive–interpretive method, the expanded results show that the path of military spending in the Middle East during the period (1995-2023) witnessed a quantitative increase and also a functional transformation; the gap between the Gulf and non-Gulf countries narrowed after 2011 while Gulf levels remained higher, in a way that is consistent with the structure of the rentier state and the logic of “security in exchange for energy,” while the spending ratios rose sharply in certain cases (as in Syria) due to the transformation of armament into a tool for managing/financing internal conflict and regional repositioning, and they also rose in countries that renewed their capabilities after 2011 (such as Qatar), while a relative decline was recorded in Israel, Jordan, Turkey, and Iran, which suggests a recalibration of security priorities and public finances. At the level of alignment maps, the comparison between the two alliance blocs adopted in the study shows that the averages of military spending as a percentage of output are close between the two camps, with a slightly higher tendency among those allied with the United States. However, the more significant differences appear in the institutional-developmental indicators: the countries allied with the United States show higher averages in human development, political stability, investment, and growth, with greater oil dependence that
13 reflects the weight of Gulf economies and their ability to finance high spending, in contrast to the China/Russia group, which includes cases of sanctions/blockade that are reflected in overall and institutional performance. The relational reading within the framework of the rentier/authoritarian state supports the hypothesis of the transformation of military spending especially after 2011 into a tool of “governance engineering” in which regime security considerations prevail over developmental state security; as the high and sustained levels of spending are associated with negative correlations with political stability and democracy and with lagging development levels, and in non-diversified economies they constrain long-term performance and efforts at diversification and institutional reform. The study data also show that the diversification of arms suppliers since 2015 toward Russia/China has not produced strategic independence or a reduction in costs, but has accumulated multidirectional dependency through logistical, doctrinal, and technical complexities (differences in patterns of training, maintenance, supply chains, and system integration), which makes “plurality” a short-term balancing tool that generates extended integration costs. In this sense, the pattern of the “security dilemma” in the region is generalized across the two blocs and is reproduced through the political economy of armament: rent arrangements and funding capacity that allow the continuation of high levels of spending in some economies, versus arenas of institutional collapse and proxy wars that redefine the functions of armament from external deterrence to the management of asymmetric internal security. Accordingly, the overall descriptive evidence in the study directionally supports its six hypotheses: the level of spending is determined by the effects of the security dilemma and regional competition more than by a single “objective external threat”; in rentier/authoritarian contexts it is linked to regime survival more than defensive performance; in the long run it constrains economic performance and diversification; its growth is affected by external alliances; the diversification of suppliers does not reduce dependence or cost but increases complexity; and the sustained high levels of spending are associated with a slowdown in institutional reform. These conclusions remain structural and interpretive, bounded by the limits of the sample data, its time frame, and the definitions of classification and alliance used in the study, and they do not claim quantitative causality beyond what the descriptive-comparative analysis method allows. 7. Discussion of Hypotheses The results presented in the previous section show that the patterns of military spending in the Middle East between 1995 and 2023 are, in general, consistent with the six theoretical hypotheses formulated by the study. The data showed that the level of military spending is formed mainly as a result of structural security dilemmas and competition between regional and international powers, and not as a direct response to specific external threats, which confirms the validity of the first hypothesis. The negative correlations between democracy
14 and political stability indicators on the one hand, and the level of military spending on the other hand, also support the second hypothesis, which sees that armament in rentier and authoritarian states serves regime survival more than national defense performance. As for the third hypothesis, it finds support in the slowdown of growth and economic diversification in non-diversified economies with high and sustained spending, while the comparison between the two alliance blocs confirms the validity of the fourth hypothesis regarding the effect of external alliances in shaping spending trends. The results after 2015 show that the diversification of arms suppliers toward Russia and China did not reduce dependence but instead increased strategic and logistical complexity, which supports the fifth hypothesis. Finally, the sustainability of high levels of spending in some countries and the associated slowdown in institutional reform demonstrate the sixth hypothesis. Thus, the discussion of the hypotheses confirms that military spending in the Middle East represents an intertwined political-economic structure that reproduces the security dilemma and links the logic of rent and international alliances in shaping defense policies, making security a tool of political domination more than a purely defensive goal.
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