Defense Expenditures, Oil Revenues, and Their Impact on the General Economy in Azerbaijan

Abstract

The aim of this study is to examine the development of Azerbaijan's defense expenditures
between 1990 and 2025 and the key economic, political, and geopolitical factors influencing these
expenditures. The study addresses the theoretical framework of defense expenditures and
evaluates its relationship with economic growth using different approaches. It can be stated that
defense expenditures in Azerbaijan have increased significantly, particularly since the 2000s, and
that this increase is largely due to energy revenues and security threats. Furthermore, regional
comparisons reveal that Azerbaijan's defense spending has reached a remarkable level compared
to neighboring countries. It is understood that defense expenditures in Azerbaijan are not solely
driven by security needs but are also a strategic policy tool shaped by economic capacity and
regional developments.