National Defense Spending Research Articles

Democracy’s third wave and national defense spending

I investigate how the third wave of democracy influenced national defense spending by reference to a panel of 110 countries over the 1972–2013 period. I apply new data from the Stockholm International Peace Research Institute on military expenditures, which has been extended to years prior to 1988, and four democracy measures to address differences among indices of democracy. The results from a dynamic panel data model suggest that democracy’s third wave reduced defense spending relative to GDP by about 10% within countries that experienced democratization. I exploit the regional diffusion of democracy in the context of the third wave of democratization as an instrumental variable (IV) for democracy in order to overcome endogeneity problems. The IV estimates indicate that democracy reduced national defense spending relative to GDP by about 20% within countries that experienced democratization, demonstrating that OLS underestimates the effect of democracy on national defense spending. The cumulative long-run effect of democratization resulting from the dynamics in defense spending is almost three times larger for both OLS and IV estimates.

Paid Family Leave: A Fork in the Road of the American Welfare State

Since the War on Poverty began in 1964, the American welfare state has undergone a drastic expansion. That year, national defense spending accounted for 46 percent of all federal outlays, while entitlements consumed 29 percent. In 2020, the entitlement share is predicted to be 66 percent while national defense will have shrunk to 15 percent.With this shift in the balance of spending, government focus is now on economic redistribution. Paid family leave would cement this focus, reinforcing the American welfare state as increasingly Scandinavian in character.

Arms production, national defense spending and arms trade: Examining supply and demand

Scholars have estimated demand functions for national defense spending and investigated international arms trade for a long time. The relationship between supply and demand for military goods has, however, only been examined on aggregate level or in formal models yet. I investigate how the supply of military goods by arms-producing companies and the demand for military goods by both the national government and foreign governments are related by using a panel of up to 195 arms-producing companies in 21 countries for the period 2002–2016. The results show that if the demand for national defense spending increases by 1%, the arms sales by a country’s largest arms-producing companies increase by up to 1.2%. If exports of major conventional weapons increase by 1%, sales increase by up to 0.2%. Arms imports do not affect domestic arms sales because imported and domestically produced arms are complements, and countries mainly import those arms they do not produce themselves. Country-specific estimation results suggest that differences among countries in geopolitical conditions and international relations determine whether a country’s arms industry serves economic rather than security purposes.

Silent on science

In his first address to Congress, President Donald J. Trump echoed many of the themes from his campaign: fighting terrorism, combatting crime, creating American jobs, and repealing the Affordable Care Act. Although the prime-time speech barely mentioned science, it hinted at how Trump’s Administration will approach some topics that are important to the chemical enterprise. Likely the most vital is the federal budget. Trump pledged “one of the largest increases in national defense spending in American history.” The resulting boost in military funding would be matched with an equal cut in the nondefense budget, which includes almost all basic research spending. Earlier in the week, an Administration official suggested that cut could amount to 10%. Although the decrease might not be distributed equally among science agencies— EPA and the State Department were singled out to receive larger reductions—the idea still struck fear in scientists and educators. “We are deeply concerned

Practical Integration of Positive and Normative Approaches to Cost-Benefit Analysis of National Defense Spending

Cost-benefit analyses for national defense spending can suffer from industry trade association biases evident in inflated supposed gains from industrial multiplier effects. At the same time, ideological presumption of normative values to either increasing or decreasing defense spending (and therefore presence) by the US ignores a more effective analytic framework: first quantifying the purely financial costs of defense spending: immediate cash expense, and increased borrowing costs and slower growth due to increased debt; and the purely financial benefits: the most accurate multiplier effect.This is still only the first part of the story. Quantifying the above first allows us to evaluate the premium we may be paying for defense as a public good. This positive approach could be complemented by a normative one that ignores rhetoric, but simply attempts to assign particular defense spending line items to the particular percent reduction in the chance of a possible conflict (with an identifiable cost) to which it contributes, and use this expected value to determine the return-on-investment of defense as public good. While this framework is tested on the sequestration cuts (for the positivist component) and the costs of potential conflict in Sudan (for the normative one, where ideally defense spending items could be traced to the expected value of their ability to reduce the chance of that conflict occurring), it can be extended to any defense investment decision. This framework is hopefully preferable to anything short of combining sophisticated input-output models with a wargaming simulation.

The U.S. Imperial Triangle and Military Spending

he United States is unique today among major states in the degree of its reliance on military spending, and its determination to stand astride the world, militarily as well as economically. No other country in the post-Second World War world has been so globally destructive or inflicted so many war fatalities. Since 2001, acknowledged U.S. national defense spending has increased by almost 60 percent in real dollar terms to a level in 2007 of $553 billion. This is higher than at any point since the Second World War (though lower than previous decades as a percentage of GDP). Based on such official figures, the United States is reported by the Stockholm International Peace Research Institute (SIPRI) as accounting for 45 percent of world military expenditures. Yet, so gargantuan and labyrinthine are U.S. military expenditures that the above grossly understates their true magnitude, which, as we shall see below, reached $1 trillion in 2007This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

Globalization and the U.S.Defense Industrial Base: The Competition for a New Aerial Refueling Tanker

The growth in the global economy and the trend toward outsourcing have given rise to concerns over the composition and strength of the U.S. industrial base and the degree of U.S. dependence on other countries for certain goods. The purpose of this article is to examine the concerns surrounding the alleged inroads of foreign manufacturers into the U.S. defense industrial base, as well as the background behind the concerns, with a specific focus on the recent competition over what may be one of the largest defense contracts in U.S. history to supply the United States Air Force with a new fleet of aerial refueling tankers. The article discusses the importance of imports and national defense spending in the U.S. economy, explores the dependence (or lack thereof) of the United States on foreign imports in the defense sector, explores strategies that have previously been deployed to reduce the role of foreign manufacturers in the U.S. defense industrial base, and examines in detail the recent tanker competition. The article argues that this competition required the deployment of innovative strategies on the part of the incumbent in the industry (Boeing) and the potential entrant (Northrop/EADS) in order to balance conflicting economic, political, and military procurement objectives.

Defense spending and economic growth across the Taiwan straits: a threshold regression model

This paper employs both linear and non‐linear models to investigate the relationship between national defense spending and economic growth for Taiwan and China. Using data from 1953–2000 on defense spending, GDP, import, export and capital, we find that China's defense spending leads that of Taiwan. There exists the phenomenon of an arms race between both countries when official Chinese data are used. On the one hand, feedback relations prevail between economic growth and defense spending growth in Taiwan. On the other hand, China's national defense is found to lead economic growth.

A Cross-National Analysis of Militarization and Well-Being Relationships in Developing Countries

We focus upon linkages between militarization and development in Third-World countries. The theoretical and empirical literature variously ascribes positive or negative developmental consequences to militarization. Part of this ambiguity results from an empirical focus solely on the impacts of national defense spending on growth in the gross national product. We expand our analysis to includethreecomponents of militarization (military regimes, participation in the military, and the importation of military hardware), as influences onthreeforms of national development (economic growth, accumulation of human capital, and growth in political rights). An important part of our analysis is the use of regression techniques that address the untoward consequences of a variety of regression problems, that are for the most part untreated in conventional analyses. We find with these techniques that militarization significantly impacts development in readily interpretable ways.

The Political Economy of US Military Spending

The causes of the dramatic rise in military spending in the post-war era have been the subject of much political and academic controversy. No extant formulation seems to provide a compelling explanation of the dynamics involved in the levels of, and rates of change in, such spending. In light of this, the authors develop a new model, based mainly on a political-business cycle argument, to account for these dynamics. The basic proposition in this model is that variations in national defense spending arise from political considerations which are related to real and desired conditions within the national economy. Applying this model to the experience of the United States 1948-1976, the authors show that it has a large measure of empirical validity. If one removes the effects of war-time mobilization, it is clear that for the United States the principal driving forces in military spending dynamics were (1) the perceived utility of such spending in stabilizing aggregate demand, (2) the political or electoral value of the perceived economic effects arising out of such spending, and (3) the pressures of institutional-constituency demands.