Rukhsana KalimMuhammad Shahid Hassan2014-01-162014-01-162013Kalim, R. and M. S. Hassan(2013). "Military expenditure and poverty in Pakistan: a complex phenomenon."Paper presented at 3rd International Conference on Business Management (ICoBM), UMT, Lahore, Pakistan.https://escholar.umt.edu.pk/handle/123456789/938This article investigates the impact of military expenditures on poverty along with inflation, industrialization, service sector, and foreign direct investment for both long term and short term. An effort is made to find out the role of military expenditure in poverty elimination. The question to be addressed is that whether military expenditure is pro-poverty or anti-poverty in Pakistan. A time series analysis is made for the period of 1972-2009. The problem of unit root is inspected by applying Ng – Perron (2001) test; the strength of relationship between military expenditures and poverty in the light of control variables is investigated by using Johansen and Juselius (1990), the long term coefficients are examined by using Ordinary Least Square Method and short term dynamics are computed by applying Error Correction Mechanism. The results show that military expenditures and inflation are significantly elevating poverty in both long term and short term analysis while the growth of industrial and service sectors help in reducing poverty in Pakistan.enPakistanMilitary ExpendituresPovertyInflationIndustrializationArticle