The Localized and Spatial Effects of US Troop Deployments on Host-State Defense Spending

Abstract

We analyze how the deployment of US troops affects host-state defense spending. We test this relationship, from 1951 to 2003, by examining how the deployment of US military forces impacts defense spending in different types of states, including US allies, NATO members, non-allies of the United States, and all states. We also utilize spatial measures of US troop deployments to analyze how regional and neighborhood concentrations of forces shape host-state policies. Using both traditional panel methodology, and incorporating a simultaneous equation model for the deployment of troops, we find that non-allied states tend to decrease their defense burden when the United States places troops within their borders. However, NATO allies consistently increase their defense burden in response to the presence of US troops within their borders. Additionally, most states tend to increase spending when the United States places troops near their borders.