The technological-financial-military linkage and the reproduction of inequality between countries

In recent years, military power has re-emerged as a central driver of international economic relations. Economic theories have largely dismissed militarism as irrational rent-seeking that distorts efficient markets or they have focused predominantly on its impact on domestic economic performance. Both these perspectives, however, overlook the mutually reinforcing dynamic between military power and the reproduction of global economic asymmetries. Instead, this paper introduces what we term the imperialist feedback loop, which operates as follows: the technological and financial dominance of core economies provides the foundation for military dominance, which is then instrumental to reproduce the asymmetric global division of labour underpinning technological and financial dominance itself. Empirically, we employ a hidden Markov model to dynamically cluster country panel data (1988-2023), identifying a stable hierarchical world structure, wherein the stability of the imperialist core is tied to the existence of an impoverished periphery and limited upward mobility from the semi-periphery. The empirical validation of militarism's core role in reproducing imperialist structures can inform the design of policies aimed at counteracting the technological-military dependency of less-developed countries, ultimately reducing global inequalities.