Military versus non-military government spending and the shadow economy
Using recent cross-national data, this research examines the determinants of the shadow economy, focusing on the relative effects of military and non-military government spending. Results show that, other things being the same, nations with larger military spending have smaller shadow economies, while the effect of non-military government spending is statistically insignificant. These findings stand up to various robustness checks.
Goel, R. K., & Saunoris, J. W. (2014). Military versus non-military government spending and the shadow economy. Economic Systems, 38(3), 350–359. doi:10.1016/j.ecosys.2013.12.004