This paper brings together studies of civil war consequences and literature on military spending, introducing a novel mechanism for how civil wars adversely affect neighbors—through neighbors’ increased military spending. Military expenditures are important because they often inhibit development. Civil wars affect proximate states’ defense spending because the potential spillover threatens neighbors. Tests on developing countries from 1950 to 2006 suggest that bordering civil wars are associated with military spending levels, independently of arms races or civil war interventions. Analyses use measures of neighboring civil war that take into consideration whether or not the civil war zone reaches the shared border.