7 The Greek-Turkish Rapprochement, the Underlying Military Tension and Greek Defense Spending

NOTES

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• 2002 . Defence and Peace Economics , 13 ( No.2 ) : 85 – 107 . A comprehensive and critical survey of this literature is provided by Jurgen Brauer, “Survey and Review of the Defence Economics Literature on Greece and Turkey: What Have we Learned?”,pp. See also Jurgen Brauer, “Turkey and Greece: A Comprehensive Survey of the Defence Economics Literature,” in Christos Kollias and Gülay Günlük-aenesen (eds.), Greece and Turkey in the 21st Century: The Political Economy Perspective (New York: Nova Science, forthcoming)
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• Hartley , Keith and Sandler , Todd , eds. 1990 . The Economics of Defence Spending: An International Survey London and New York : Routledge . See, for example, (and Keith Hartley and Todd Sandler (eds.). Handbook of Defence Economics (North Holland: Elsevier, 1995a). Similarly, see Todd Sandler and Keith Hartley (eds.), The Economics of Defence (Cambridge: Cambridge University Press, 1995b). See also Ron Smith, “The Demand for Military Expenditure,” Economic Journal Vol.90, No.4 (1980), pp. 811–20, and Ron Smith, “Models of Military Expenditures,” Journal of Applied Econometrics Vol.4, No.4 1989 pp. 345–59
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• Sandler and Hartley . 1995b . 52 – 72 .
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• Dokos , Thanos . 2001 . “Greek Security Policy in the 21st Century,” . In Greece and Turkey After the End of the Cold War Edited by: Yiallourides , Christodoulos and Tsakonas , Panayiotis . 79 – 100 . New York and Athens : Caratzas . See (pp. and Athanasios Platias, “Greece's Strategic Doctrine: in Search of Autonomy and Deterrence,” in Dimitri Constas (ed.), The Greek-Turkish Conflict in the 1990s (London: Macmillan, 1991), pp. 91–108
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• Avramides , Christos . 1997 . “Alternative Models of Greek Defence Expenditures,” . Defence and Peace Economics , 8 ( No.2 ) : 145 – 87 . See, for example: Panayiotis Kapopoulos and Sophia Lazaretou, “Modeling the Demand for Greek Defence Expenditure: An Error Correction Approach,” Cyprus Journal of Economics Vol.6, No.1 (1993), pp. 73–86; Kollias (1995), pp. 311–14; and Christos Kollias, “The Greek-Turkish Conflict and Greek Military Expenditure 1962–90,” Journal of Peace Research Vol.33, No.2 (1996), pp. 217–28
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• Öcal , Nadir . 2002 . “Asymmetric Effects of Military Expenditure between Turkey and Greece,” . Defence and Peace Economics , 13 ( No.5 ) : 405 – 16 .
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• The war with the PKK guerillas can partially explain Turkish military spending trends, whereas in the case of Greece, fiscal problems may offer a possible explanation
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• Kollias , Christos . 2001 . “A Look at the Methodological Issues Involved in the Greek-Turkish Arms Race Hypothesis,” . Hellenic Studies , 9 ( No.2 ) : 91 – 114 .
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• Kollias , Christos and Paleologou , Suzanna-Maria . 2003 . “Domestic Political and External Security Determinants of the Demand for Greek Military Expenditure,” . Defence and Peace Economics , 14 ( No.6 ) : 437 – 46 .
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• Günlük-Şenesen , Gülay . 2001 . “Turkish Defence Expenditures in View of the Ups and Downs in Turkish-Greek Relations: Is There a Reaction,” . Hellenic Studies , 9 ( No.2 ) : 2001 – 89 . See pp. 73, and also Kollias (pp. 98–110
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• 2001 . 81 – 5 . Günlük-Şenesen
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• 2002 . 85 – 107 . See the surveys of the defense economics literature on Greece and Turkey by Brauer Brauer (2003)
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• 1985 . Journal of Conflict Resolution , 29 ( No.3 ) : 503 – 30 . For the discussion and analysis of these methodological issues, see Michael Leidy and Robert Staiger, “Economic issues and Methodology in Arms Race Analysis,”pp. and Charles Anderton, “Arms Race Modeling: Problems and Prospects,” Journal of Conflict Resolution Vol.33, No.2 (1989), pp. 346–67. For issues concerning the econometric estimation, see Ron Smith, Paul Dunne and Eftychia Nikolaidou, “The Econometrics of Arms Races,” Defence and Peace Economics Vol.11, No.1 (2000), pp. 31–43. For the specific Greek-Turkish issue, see Brauer (2002), pp. 89–91; Brauer (2003); Kollias (2001), pp. 98–110; and Günlük-Şenesen (2001), pp. 81–5
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• Yiallourides , Christodoulos and Tsakonas , Panayiotis , eds. 2001 . Greece and Turkey After the End of the Cold War New York and Athens : Caratzas . For a comprehensive presentation see, inter alia
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• Günlük-Şenesen . 2001 . 79 – 81 .
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• 2001 . Hellenic Studies , 9 ( No.1 ) : 71 – 100 . For the impact on Greek-Turkish relations see, for example, Panayiotis Tsakonas, “Turkey's Road Map to the European Union: Implications for Greek-Turkish Relations and the Cyprus Issue,”,pp. and Panayiotis Tsakonas, “Turkey's post-Helsinki Turbulence: Implications for Greece and the Cyprus Issue,” Turkish Studies Vol.2, No.2 (2001), pp. 1–40
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• Dokos , Thanos and Tsakonas , Panayiotis . 2003 . “Greek-Turkish Security Relations Reconsidered: A View from Athens,” . Edited by: Kollias and Günlük-Şenesen .
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• Heraclides , Alexis . 2002 . “Greek-Turkish Relations from Discord to Détente: A Preliminary Evaluation,” . Review of International Studies , 1 ( No.3 ) : 23 See p
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• The JDA Doctrine is essentially the integration of military planning and operations by Greece and the Republic of Cyprus. In the context of Greek extended deterrence, it signifies the commitment by Greece to intervene militarily in case of Turkish military operations in Cyprus
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• From a Turkish perspective, the JDAand thus the active military engagement of Greece in Cyprusas well as the possible future extension of Greek territorial waters to 12 miles in line with the international treaty currently in force, constitutes threats to its interests, rights and national sovereignty
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• It should be stressed that any attempt to quantify bilateral relations of a dyad of nations and the underlying tensions between them has inherent difficulties and is subjective
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• Reportedly, the Greek MoD directly relays the activities of the Turkish air force to NATO in real time, but since the official NATO position is that the problem of the length of Greek airspace is a purely bilateral issue the figures used here cannot be independently verified
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• Clogg , Richard . 1991 . “Greek-Turkish Relations in the post-1974 Period,” . Edited by: Constas . 15 See pp. The roots of this problem can be traced back to 1974; since then, Turkey has not accepted Greece's 1931 declaration that its national airspace extended to ten miles and only recognizes a six-mile airspace, arguing that airspace should be the same as territorial waters. Turkey has also declared a causus belli policy if Greece extends its territorial waters to 12 miles in line with the international treaty currently in force
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• Defense expenditure is influenced by a multitude of both external and internal factors: the former include such factors as alliance and external threats; the latter include economic constraints, domestic political cycles, the interests of the military and internal repression. Thus, in the case of Greek military expenditure, it would be wrong to attribute its growth over the past few years solely to security and defense considerations vis-à-vis Turkey, let alone claim that the proposed tension index is its main determinant
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• Avramides . 145 – 87 . Again, this may be cited only as a partial explanation of Greek military spending and the trend it has exhibited. A number of other factors can be cited as determinants of such spending. See, inter alia, (1997),pp., and Kollias and Paleologou (2003)
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• The t-statistic determines whether or not the coefficient of each right-hand variable is equal to zero, individually. When this is true, from a statistical point of view the variable is insignificant. In our case the obtained t-statistics indicate that the coefficients of the violations are significantly different to zero and therefore partially explain the dependent variable. Similarly, the F-statistic determines whether or not the coefficients of all the right-hand variables are equal to zero. When they are, from a statistical point of view they are insignificant
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• The observations of the variables of interest in our time series analysis contain error terms. This is because econometric models are unable to predict the exact values of the variables every time. However, sometimes the error terms in different observations of the variables are related and then the problem of serial correlation (autocorrelation) exists. Because of this problem, the most frequent and popular test is Durbin-Watson (DW), which takes the value from zero to four. Usually, a value around 2.00 suggests that there are no serial correlation problems in the estimated regression
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• This statistic indicates how well the model performs: how well the right-hand variables (independent variables) “explain” the left-hand variable (dependent variable)
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• The type of regression models we are using in the case of (1.6) and (1.7) as well as (2.6) and (2.7) are autoregressive. This means that the lagged value of the dependent variable (MGRt−1 in our case) appears as a regressor in the estimated relationship. We chose this type of model as, based on the theory of military expenditure, this type of expenditure is affected by its own value in previous periods, that is, current defense spending is affected by its lagged values or, in other words, spending decisions in previous fiscal periods. Given that the lagged dependent variable appears as a regressor, the DW statistic is biased and therefore not appropriate to check for serial correlation. Thus, the LM diagnostic test was employed in the case of (1.6) and (1.7) as well as (2.6) and (2.7), as can be seen in Table 1. Results of the Durbin's h-test for serial correlation also yielded similar results, with a value of −0.27 for (1.6) and −0.50 for (1.7)
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