Factors influencing the modernization of military-investment economic appraisal systems

Budgetary restrictions resulting from the present international economic crisis have tightened the need to improve efficiency in defense spending, leading to the armed forces having to undertake their duties with fewer resources. Previous reports on the subject have looked into the determining factors and effects of military spending but very few studies have analyzed the determinants for the modernization of the methodology for assessing efficiency. Thus, using a multiple regression statistical model, we have analyzed the appraisal systems in place in 28 countries to identify factors that influence the development of economic assessment of military expenditure. Our findings have revealed three factors that may favor the improvement of appraisal systems with regard to military expenditure: the quality of governance, size of the armed forces, and unemployment levels.     

Development and conflict in the Balkans: Catch-up and military expenditure

This paper analyses the convergence between countries in relation to the catch-up hypothesis concerning the level of total productivity. The catch-up hypothesis claims that poor countries tend to grow faster than rich countries through the international diffusion of knowledge and technology. We test this hypothesis for the Balkan countries and investigate the effect of military expenditure in the region on productivity growth. The aim is to investigate empirically whether productivity growth has been greater in countries with lower military expenditure, in line with theory. The results obtained show that, overall, improvements in technological change co-exist with deteriorating technical efficiency change and that there is a negative correlation between military expenditure and either total productivity growth and technological change, and a positive, but statistically insignificant, relationship with technical efficiency change. We conclude that economic growth is the key to regional development and that too great a diversion of resources to military commitments can lead to overstretch.     

Political Military Competition and Size and Composition of Government

This paper uses a formal model to analyze the effects of political military competition among states on the size and composition of state. Great economies of scale in warfare, even distribution of military capability among contestants and greater value of contested resources generate higher level of military capacity and growth of government. If there is decreasing return to scale in state revenue generating function and provision of public intermediate inputs, then there will be an increasing size of civilian public sector relative to that of military. The paper finally studies how waves of military revolutions affected international political military competition and the size and composition of government in history.     

Military expenditure and unemployment in the OECD

The effect of military expenditure on employment is a matter of considerable importance. However, few of the standard economic analyses of unemployment take any explicit account of variations in military expenditure in their models. The purpose of this paper is to assess whether the prevalent neglect of this variable in labour economics is justified.

The paper briefly surveys previous estimates made of the employment effects of military expenditure. It then considers evidence from the simple dynamic reduced form regressions estimated on long historical series for the US and the UK and pooled post‐war data for 11 OECD countries. It does not suggest that the share of military expenditure is a significant influence on the unemployment rate. This implies that in analysing unemployment no special account need be taken of military expenditure and that the fear that reductions in the share of military expenditure will be associated with higher average unemployment levels is misplaced.     

SHOULD MILITARY UNIFORMS CARRY THE UNION LABEL?

It is widely believed that the unionization of military labor leads to reduced discipline and lower combat capability. Case studies of the performance of existing military unions, however, generally suggest that unionization has a benign impact on the performance of the armed forces. In this paper, we offer a theoretical economic analysis of the likely impact of military unionization on volunteer militaries. Our analysis suggests that military unionization will unambiguously lead to larger, but less disciplined, armed forces, leaving the overall impact of unionization on defense capability ambiguous. Military unionization, however, will clearly enhance social welfare.     

Civil-military relations and human security in a post-dictatorship

This article explores current developments in Chile, where since the return to democracy in 1990, the elected authorities have reconfigured the nation’s military resources in favour of four action pillars: peacekeeping and international conflict management, landmine removal and gun disarmament, emergency and catastrophe response, and a concern for human, economic and social rights. Successive defence policies offer a valuable case study for exploring the trade-offs between security, traditional and non-traditional threat management and institutional capabilities. The article argues that human security policymaking is not free from undesired outcomes; specifically, regarding how to reconvene the role of the armed forces when conventional war seems a thing of the past. The paper focuses on the interagency policy implications and the challenges ahead for civilians and the military.     

THE HUMAN CAPITAL PEACE: DEVELOPMENT AND INTERNATIONAL CONFLICT

This paper explores the relationship between human capital and international conflict. In theory, human capital may increase the opportunity cost of military service and the economic cost of injury and loss of life in combat; it may decrease the benefits of conflict as human capital cannot be easily appropriated or transferred; it may affect societal norms toward peace and war; and it may alter military productivity through new technology and complementarities between military technology and personnel. Using a panel of politically relevant dyads, I find robust empirical evidence that human capital may significantly decrease the likelihood of militarized conflict between nations. In short, the findings suggest that promoting human capital‐oriented development may help to increase peace in the world.     

试论经济力量向军事力量的转化

国家经济力量是军事力量的唯一源泉,军队的战斗力大小是军事力量强弱的重要标志,提高战斗力是军队一切工作的核心。但是,经济力量并不等于就是军事力量和战斗力,要把经济力量变为军队的战斗力还要经过一系列的转化过程。其整个转化过程可分为三个步骤,即经济力量向保障力量要素的转化;保障力量要素向保障能力的转化;保障能力向战斗力的转化。认真研究这些转化过程和转化环节,掌握其转化途径、方法和转化机制,对于促进和加快转化速度,提高转化效率和军队战斗力,具有十分重要的现实意义,是加强质量建军,实现两个根本转变和做好军事斗争准备的关键。     

Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict

This investigation re-examines the potential sources of positive externalities for the relationship between military spending and economic growth using recent advances in panel estimation methods and a large data-set on military expenditure. The investigation provides a new analysis on the relationship between conflict, corruption, natural resources and military expenditure and their direct and indirect effects on economic growth. The analysis finds that the impact of military expenditure on growth is generally negative as in the literature, but that it is not significantly detrimental for countries facing higher internal threats and for countries with large natural resource wealth once corruption levels are accounted for.     

Hard Balancing in the Age of American Unipolarity: The Russian Response to US Ballistic Missile Defense during the Bush Administration (2001–2008)

One of the central debates in contemporary international relations scholarship concerns the issue of whether balancing has occurred in response to US-based unipolarity, and if it has, how this should be characterised. Existing research has seen analysts argue that major power responses to unipolarity can be placed in one of either three categories: an absence of balancing, soft balancing, and hard balancing. This article contributes to the scholarly literature by providing a case study of hard internal Russian balancing against the US’s development and deployment of Ballistic Missile Defense (BMD) systems during the Bush Administration (2001–08). Russian hard balancing against the US has involved: (1) fielding new strategic nuclear and conventional weapons equipped with BMD countermeasures, and, relatedly, (2) making changes in military doctrine. As a result, security dilemma dynamics are increasingly in evidence in US relations with Russia.     

Military expenditure and economic development in China: an empirical inquiry

Increases in military spending have a big impact on the socioeconomic conditions in any country. However, there is no consensus as to whether the rising military expenditure is beneficial or detrimental to economic growth. The present study chose China as a case study to empirically examine a complex relationship between military expenditure and economic development. The findings from the Johansen cointegration test indicated that there existed a long-run relationship between China’s military spending and economic growth. Furthermore, the Granger causality test detected a unidirectional causality from economic development to military expenditure. These results were further confirmed by the findings from the impulse response function. This means that China represents an example of a developing economy where the size of military expenditure expands in the process of economic transformation.     

The impact of military expenditures on economic growth in the less developed countries∗

This paper presents the results of empirical research on the economic impact of military expenditure — milex — on the less developed countries. The hypothesis is that the impact on growth is a combination of three effects: (1) increased security — positive impact; (2) diversion of resources from productive investment — negative impact; and (3) pressure for more efficient government policies in response to the external threat — positive impact. The combination of these effects would produce a non‐linear relationship with the growth rate at first increasing as milex increased and then decreasing. For the full sample of 71 countries, we found the predicted relationship, however, it is not robust to changes in the sample. The robust conclusion is that there was no evidence of a negative impact of military spending on economic growth.     

Civil—military relations in Africa: Navigating uncharted waters

“Perception is a second reality!”

This essay discusses the military as a part of wider society and the interactions between the two. It argues that civil—military relations are complex and not always harmonious. In its focus on Africa, the essay describes some differences in the development of African militaries and civil—military relations on the continent as compared with the West, but argues that the differences are merely a matter of degree. As civil—military relations on the continent have been strongly influenced by its colonial history, which caused fear and even dislike of the colonial military, it still impacts on these relations in the post-colonial era. After examining the relationship between the armed forces, democracy and politics in the politically turbulent African environment, it is concluded that a simplistic definition of civil—military relations is difficult to arrive at. The essay identifies the key principles of democratic civil—military relations and, although admitting that these principles are not always easy to adhere to, argues that as Africa develops civil—military relations, African militaries have moved and will move closer to observing these principles. To enhance this process it is essential for African militaries to include civic education programmes at all levels of education and training in order to gain a better understanding of and commitment to these principles.     

Defence spending and economic growth: A causal analysis for Greece and Turkey*

There are a number of studies which consider the relation between military spending and economic growth using Granger causality techniques rather than a well‐defined economic model. Some have used samples of groups of countries, finding no consistent results. Others have focused on case studies of individual countries, which has the advantage of the researchers bringing to bear much more data than the cross country samples and a greater knowledge of the structure of the economy and the budget. This paper adds to the literature by providing an analysis of two countries, Greece and Turkey, which are particularly interesting case studies given their high military burdens, the poor relations between the two and the resulting arms race in the area. In addition to analysing the data using standard “pre‐cointegration” Granger causality techniques, this paper employs modern vector autoregressive (VAR) methodology that utilises cointegration via Granger's representation theorem. The standard Granger causality tests suggest a positive effect of changing military burden on growth for Greece, but this is not sustained when the cointegration between output and military burden is taken into account. The only evidence of significant Granger causality is a negative impact of military burden on growth in Turkey.     

ON THE RELATIONSHIP BETWEEN MILITARY EXPENDITURE,THREAT, AND ECONOMIC GROWTH: A NONLINEAR APPROACH

The main objective of the paper is to decipher the military expenditure–economic growth relationship, taking the level of economic development (income) into consideration. Our findings suggest the following: (i) military expenditure has a significantly negative relationship to economic growth for the 23 countries with initial incomes (threshold variable) less than or equal to $475.93; (ii) when the threat level is heightened, economic growth (23 countries) is expected to decrease. However, military expenditure in the presence of sufficiently large threats increases growth; (iii) for the remaining 69 countries whose initial incomes (real GDP per capita in 1992 price) exceed $475.93, no significant relationship exists whether the threat variable is taken into consideration or not.     

A Good Ally - Norway and International Statebuilding in Afghanistan, 2001-2014

The article examines the findings of the Commission of Inquiry established by the Norwegian government in 2014 to evaluate all aspects of Norway’s civilian and military contribution to the international operation in Afghanistan from 2001 to 2014. Concerned with the wider implications of the Commission’s findings, it focuses on two issues in particular: (1) Norway’s relations with the US, a close and long-standing strategic ally whose resources, capabilities and dominance of decision-making dwarfed that of all other coalition partners in Afghanistan; and (2) Norway’s record in the province of Faryab, where, from 2005 to 2012, a Norwegian-led Provincial Reconstruction Team was charged with bringing security, good governance and development to the province. How Norway prioritised and managed relations with the US highlights and helps to problematise the challenges – political, practical and moral – facing small and medium-sized powers operating in a coalition alongside the US. Norwegian efforts in Faryab are revealing of the dilemmas and contradictions that plagued and, ultimately, fatally undermined the international intervention as a whole. As such, Norway’s experience provides a microcosm through which the inherent limitations of the attempt to transfer the structures of modern statehood and Western democracy to Afghanistan can be better understood.     

Research communication security in the 90s: A view from the UK

This paper develops a methodology for measuring the capital value of military assets in monetary terms. We distinguish between two military capital measures. One measure, called the value of military capital (services) summarizes the value of military defense assets during a particular year. A comparison of the capital‐services value of U.S. and Soviet tactical combat aircraft is provided for the period 1970–1984.

One feature of the capital‐services measure that makes it particularly interesting is that its size can be compared with such military expenditures as operating and support. While these latter expenditures reflect the readiness of a defense establishment, the relevant capital‐services measure reflects force structure and modernization.

A second measure, called the value of military capital (wealth), summarizes the military benefits obtained from defense assets over the remainder of their service lives. This measure depreciates the capital as it ages, and is useful for comparing military wealth with other types of wealth in the economy. We provide this measure for the U.S. military capital stock for 1925–1984.     

On the production of victory: Empirical determinants of battlefield success in modern war

Using a data set of historical battles from 1600 to 1973, this paper analyzes the empirical determinants of tactical success in modern war. Based on a reduced form approach we consider key elements of military theory as production factors for combat success as an output of a military production function. The paper focuses on the relationship of material and non-material factors to battlefield success, and especially on the role of superior force strengths. Contrary to the emphasis on technology which can be found in the recent literature, our estimation results indicate that numerical superiority has retained its crucial role for battlefield performance throughout history. In general, human elements of warfare, like leadership, morale and surprise, have continued to be important determinants of battle outcome despite technological progress in weapons.     

Military expenditures,economic growth and spatial spillovers

The relationship between economic growth and military expenditure has been the subject of a large literature in defence economics. This study analyses the influence of military expenditures on economic growth in a global perspective for the time period 2000–2010 taking spatial dimension into account. The augmented Solow model is employed to investigate the defence-growth nexus using the cross-sectional data relating to 128 countries. Following a traditional regression analysis, spatial variations in the relationships are examined utilizing different spatial econometric specifications estimated by maximum likelihood. The regressions are compared with each other via likelihood ratio tests, and the spatial Durbin model is found to be the most appropriate one suggesting that the typical least-squares model is misspecified. Empirical evidence indicates that military expenditure has a positive effect on economic growth with a significant spatial dependence for the time period under consideration.