Abstract. Defense spending is one of the major public expenditure items for many states around the world. Today, defense expenditures for internal and external security are not less than past decades. In addition to the hostilities arising from historical disputes and traditional conflicts, today's governments have to endure higher defense spending for national security in the face of new threats than in previous periods. Turkey and the Central Asian Turkic Republics, which have been in geography where geopolitical and strategic positions have not always been in conflict and threats, are also trying to cope with the increasing burden of military and security expenditures. In this study, the relationship between defense expenditures and external debt is investigated in the context of Turkey, Kazakhstan, Kyrgyzstan and Azerbaijan. Findings from alternative methods suggest that there is a positive relationship between defense spending and external debt in the four countries.

Keywords: defence expenditures, external debt, panel data analysis.