Özet:

The amount of use of fossil fuels in the military is among the important factors that determine defense expenditures. Especially, oil consumption makes up a large part of this amount, and it makes countries dependent on fossil fuels. In the study, while examining the relationship between oil consumption and defense expenditures, countries has grouped by considering the effect of having rich oil reserves or not on defence expenditures. The first group among countries with high fossil fuel dependency consists of countries with high oil reserves, while the second group consists of countries with low oil reserves. This paper aimed to examine the causality relationship between defence expenditures and oil consumption for 35 fossil fuel-dependent countries, for the time-period 1997-2014 by using Johansen co-integration test, error correction model and VECM Granger causality test. The results of empirical analysis indicates that there is a bidirectional causality relationship in Jordan, Oman, Malta, Ecuador and Russia, unidirectional relationship running from oil consumption to defence expenditures in Luxembourg and Egypt and unidirectional relationship running from defence expenditures to oil consumption in Italy. There is not enough evidence to reveal the causality difference between countries having rich oil reserves or not.

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