Fluctuations in Soviet Defense Spending

Abstract

Despite our efforts to understand the dynamics of the arms race, we know little about the causes of short-term fluctuations in USSR military spending. This article attempts to shed new light on the domestic causes of these fluctuations, with special emphasis on Soviet economic conditions. It is found that annual shifts in military budgets are responsive to the magnitude of the economic burden that defense outlays represent in a given year and to the stage of the five-year planning cycle the Soviet economy happens to be in. With respect to the latter, the military sector fares least well relative to the civilian sector at the beginning and end of the five-year period, but compensates for this toward the middle of the cycle.