The demand for defense in East Asia: Modeling security alternatives∗

An interactive economic model of military spending is proposed. It is quantified on the basis of cross section data for East Asia. Projections of military spending to the end of the decade suggest that the growth of military spending in the region will decline slightly in the current decade. East Asian military spending can, however, be greatly influenced by the path of Chinese and US military efforts. An expansion of military spending by China could cause neighboring countries to greatly increase their military expenditures.     

Does military spending promote social welfare? A comparative analysis of the BRICS and G7 countries

Whether military spending is capable of promoting social welfare is currently a controversial issue. The aim of this paper is to investigate how military spending affects the input and output of social welfare (i.e. social welfare expenditures and social welfare index). A panel cointegration analysis and an impulse response function are conducted with multi-country panel data, over two time periods, 1998–2011 and 1993–2007. In addition, to extend a comparative analysis over different economies, BRICS (i.e. Brazil, Russia, India, China, South Africa) and G7 (i.e. the US, Japan, Germany, the UK, France, Italy, Canada) countries are selected as representatives of emerging economies and developed countries, respectively. The empirical results show that military spending enhances social welfare expenditures in developed countries, while the effect is ambiguous in emerging economies. Also, military spending is capable of promoting the social welfare index based on the FMOLS estimation. The comparative analyses indicate that unlike in the G7, the effect of the growth of military spending on the growth of social welfare expenditures is negative and shorter in the BRICS.     

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.     

The impact of military spending cutbacks on economic activity in an incentive‐wage two‐sector aggregative economy∗

We examine the theoretical outcomes of disarmament on economic activity in a two‐sector model of endogenous equilibrium unemployment rate. Three main shocks are analyzed: Exogenous cutbacks in military spending on the capital good and employment, and a reduction in public sector debt. The first shock is contractionary for equilibrium employment if the capital‐goods producing sector is relatively labour‐intensive but expansionary under the alternative factor intensity assumption. The second shock is contractionary for employment under either relative factor intensity assumption. If Ricardian equivalence fails, a reduction in public sector debt is likely to expand long‐term employment (JEL E24).     

Defence spending and growth in turkey 1954–1993: A causal analysis

This paper investigates the causality issue between military expenditure and growth in the case of Turkey, a strategically located developing country, for the period 1954–1993. Results reported herein reveal the absence of any causal ordering between the variables in question.     

Does counterterrorism spending reduce the incidence and lethality of terrorism? A quantitative analysis of 34 countries

Following the 11 September 2001 attacks, the US government increased its counterterrorism (CT) funding and created several Federal Agencies such as the Department of Homeland Security; Transportation Security Administration; and National Counterterrorism Center. Similarly, the 7 July 2005, London bombings also compelled the British government to increase its CT funding. These examples illustrate a phenomenon that when states experience terrorism, they dramatically increase public safety spending in order to reduce or eliminate the incidents of and casualties resulting from acts of terror. Using statistical data collected from 34 countries covering nine years, this article examines recent CT spending increases. Critically, the authors explore whether recent public safety expenditures can measurably reduce the number of domestic and international terrorist attacks. The implications of their findings should be salient for policy-makers’ assessments of their countries’ current CT strategies and policies concerning their respective Intelligence and Security Communities.     

The economic effects of international trade in armaments in the major western industrialized and developing countries†

We have used the Michigan Model of World Production and Trade to assess the impact of exports and imports of armaments (based on 1980 data) on sectoral trade and employment and other economic variables in the major Western trading countries. If the United States were to place a unilateral embargo on its arms exports and imports, we calculate that it would experience a comparatively small amount of employment displacement in the aggregate and that most of this displacement would occur in the transport equipment and electric machinery sectors. If all the major Western countries were to place a multilateral embargo on their arms trade, the sectoral effects on the United States would be similarly small. But the sectoral effects in several other industrialized and developing countries measured as a percentage of sectoral employment, would be larger, indicating potential short‐run adjustment problems in labor markets in some cases.     

Military spending and budget deficits: the impact of US military spending on public debt in Europe (1988–2013)

The aim of this paper is to study the relationship between military spending and sovereign debt in a panel of 13 European countries. In particular, under the assumption of the interdependence of military spending between US and European countries, we analyse whether US military spending affected European sovereign debt in the period 1988–2013. The empirical estimation is based on different steps: (i) a unit root test; (ii) an Arellano–Bond panel estimation and a linear fixed effect model; and (iii) a FMOLS estimation to highlight the long run relationship between debt and relevant variables. General results highlight that debt burden of European countries is: (1) positively associated with US military burden and (2) negatively associated with average military burden of other European countries.     

Excess capacity in weapons production: An empirical analysis∗ †

This paper analyzes a set of observations by the Congressional Budget Office (CBO) on individual weapons systems regarding whether large amounts of excess capacity exist and whether short run average cost (SRAC) appears to be severely decreasing. It is shown that the amount of excess capacity and steepness of SRAC are essentially independent of output rate. It is then argued that this suggests that production is occurring in inefficiently large plants—i.e.—off the long run cost curve.     

Missile systems: “Flexible modularity” and incremental technological change in military production∗

It is often stated that technological change in the military field is characterised by the introduction of radical innovations rather than by incremental processes of technological change. This article illustrates the diversity of military innovation by arguing that technological change in missiles systems is dominated by incremental change. While some large weapons platforms display the design rigidities normally associated with complex systems, missiles are characterised by “flexible modularity”. Flexible modularity facilitates the continuous introduction of upgrades, and makes missile systems amenable to gradual technological change. Besides, it has significant implications for the future role of missile systems, and poses special problems for missile disarmament and technology control initiatives.     

The impact of defense and non‐defense public spending on growth in Asia and Latin America∗

For a three‐sector Feder‐Ram framework, we present time‐series, cross‐sectional estimates for two cohorts, consisting of Asian and Latin American countries. The estimates indicate that private investment, and defense and non‐defense public spending are growth promoting for alternative error components representations. For the best error components representation, greater growth enhancement is associated with the two forms of public spending in Asia than in Latin America, while the opposite comparison characterizes private investment. Although defense is growth promoting, an opportunity cost exists insofar as non‐defense spending, financed by defense spending, appears to give a small net boost to growth in Latin America.     

The growth in military expenditure in Germany 1951–2011: did parties matter?

We examine whether government ideology was correlated with the growth in military expenditure in Germany over the period 1951–2011. Using various measures of government ideology, the results do not show any effect. The exception is an ideology measure based on the Comparative Manifesto Project (left-right scale): using this measure, the results show that the growth in military expenditure increased by about 2.4 percentage points, when the ideology variable (right-wing) increased by one standard deviation. This effect, however, is based on observations until the early 1960s and cannot be generalized. The major political parties agreed on how to evaluate international risks and threats. Government ideology retired to the background. We conjecture that the consensus among the major parties will persist – even if military spending needs to be increased in response to new international risks and threats.     

Daily life and motivation in war: The wehrmacht in the Soviet Union∗

Lucio Ceva, Le Forze armate. Turin: UTET, 1981, Pp. 641; L.48,000.

Bernd Wegner, Hitlers Politische Soldaten: Die Waffen‐SS 1933–1945. Paderborn: Verlag Ferdinand Schöningh, 1982. Pp. 363; DM48.

Jean Vanwelkenhuyzen, Les avertissements qui venaient de Berlin, 9 octobre 1939–10 mai 1940. Paris‐Gembloux: Editions Duculot, 1982. Pp. 398; Fr.90.

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William J. Taylor, Jr. and Steven A. Maaranen (eds.), The Future of Conflict in the 1980s. Lexington, Mass.: Lexington Books, 1982. Pp. xiii + 505.

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Richard Burt (ed.), Arms Control and Defense Postures in the 1980s. Boulder, Colorado: Westview Press and London: Croom Helm, 1982. Pp.x + 230; £15.95.     

The Millenials’ war: dilemmas of network dependency in today’s military

This work is about how the United States military has become dependent on networked technology. As arguably the largest contributor to national security, it has become so dependent that its chief doctrine integrates networked technology into nearly every specialty, with particularly intense focus on Network Centric Warfare. As the military’s old guard is replaced by the highly technical Millenial Generation, there is cause to pause when assuming this techno-acuity brings nothing but advantage and success. Vulnerabilities stemming from such extensive dependence offer opportunities for exploitation that have not gone unnoticed. The first step to moving forward from this point is to fully understand the extent to which the military has become dependent on computer networks. It might be the Millenials’ war today, but it would be quite unwise for the United States military to think about it and fight it in a purely Millenial way.     

A note on the causal relationship between defence spending and growth in Greece: 1955–93

The causal relationship between economic growth and defence spending has attracted considerable attention and has been the subject of many empirical studies. This paper investigates the existence of a causal link between military expenditure and economic growth in the case of Greece for the period 1955–93. By European Union standards, Greece allocates substantial human and material resources to defence. At the same time, Greece is the poorest European Union member facing chronic economic problems. Using the concept of Granger‐causality, the findings reported herein suggest that neither variable Granger‐causes the other disclosing thereof the absence of any causal ordering between them.