THE IMPACT OF CORRUPTION ON MILITARY SPENDING: THE ROLE OF RULING PARTY IDEOLOGY IN ISRAEL

Abstract

The present study investigates the extent to which the ideological stance of Israel's ruling party, particularly in the context of military expenditure, affects national corruption levels. Employing the Vector Error Correction Model (VECM), the analysis is based on data spanning from 2000 to 2023. The findings reveal a statistically significant and positive association between the Corruption Index (CI) and two key variables: changes in the average value of defence purchases allocated for general government consumption (DGCP), and average wage disbursements within the defence sector, excluding pension-related payments (DGCWP2). Conversely, the analysis identifies no significant correlation between the CI and variations in average government revenue from the sale of defence-related products (DGCR). The study posits that corruption tends to escalate under right-leaning Israeli administrations. Specifically, the increase in corruption is attributed to rising DGCP and DGCWP2. The ideological classification of the Israeli government is represented by a dummy variable (DUMMY).