The Economics of Defence Spending: An International Survey.

• Author: Anderton, Charles H.

In this book Professors Hartley and Sandler present case studies of the economic, political and social causes and consequences of defense spending for nineteen nations.(1) The central theme of the book is the diversity of international experience in national attitudes and policies toward defense: some nations join military alliances (e.g., former Warsaw Treaty countries); others pursue independence (e.g., France) or neutrality (e.g., Sweden); some acquire large stockpiles of nuclear weapons (e.g., U.S., U.S.S.R., U.K., France); others have nuclear weapons potential but have not acquired large stockpiles (e.g., India, Pakistan); some defense policies are driven primarily by external threat (e.g., Israel) while others seem partially designed to protect the regimes in power from their own citizens (e.g., Argentina, some former Warsaw Pact countries). Hartley and Sandler's book successfully displays the special characteristics and motivations that drive defense resource allocation within nations.

Each case study begins with descriptive statistics of economic and military indicators (e.g., GDP, growth, inflation, unemployment, government budget, military spending, defense burden). The foreign policies and military backgrounds of the nations between 1960 and 1987 are discussed with special attention paid to external or internal threats, arms rivalry, foreign commitments, alliance membership and the arms trade. The role of the military-industrial-complex within the nations is also considered. Most of the chapters present an empirical estimation of the country's demand for military expenditures. Throughout the chapters, distinctive features and problems for each nation are highlighted.

One of the most interesting chapters is Daniel N. Nelson's on the political economy of military effort in the former Warsaw Pact nations. Instead of focussing on the usual theme of the negative economic impacts of defense spending, Nelson explores the interplay between a failed economic and political system and higher military effort. Nelson's thesis is that the fundamental political and economic failure of socialism leads to higher military spending by insecure political elites. The higher military spending, however, further erodes the political and economic legitimacy of the system. The reduced capacity of the political elites to ensure their leading role leads to further extraction of resources for military protection or coercion. This negative dynamic must give...