Swords into plowshares: Financing a world economic equalization program

Using the WEEP simulation model, this research examines the potential impact of a very large-scale foreign development assistance program (a “global Marshall Plan”), financed largely from reallocation of military expenditure, on the future development of the world economy. The benchmark simulation of the model with the program in operation indicates a dramatic reduction in world economic inequality, at the cost of a very minor retardation in the economic growth of the rich nations. Sensitivity analysis demonstrates that with certain key exceptions, the optimistic results are reasonably robust against parametric variation.