Economic growth, repression, and state expenditure in non-democratic regimes

•Positive growth stimulates defence spending but reduces non-defence in dictatorships.•Positive growth has little effect on defence and non-defence spending in democracies.•Public spending is slightly sensitive to negative growth across regimes.•Corruption reduces the defence share but not the non-defence share.•A developing country spends less on public services than a developed one.

This paper examines how economic growth affects government spending in non-democracies. A robust finding is that positive growth induces a significant increase in defence spending but a decrease in non-defence spending in dictatorships, with little effect in democracies. Government spending is slightly sensitive to negative growth across regimes. Higher growth rate in a country than its neighbours induces more spending than their average. Corruption causes a reduction in defence spending but an increase in non-defence spending. Primary education stimulates non-defence spending but reduces defence expenditure, secondary education causing the opposite effect. An under-developed country spends less than a developed country.