U.S. Military Deployment and Host-Nation Economic Growth

• Author: Uk Heo,Min Ye
• DOI: 10.1177/0095327X17738219
• Date: 01 April 2019
• Published date: 01 April 2019
• Subject Matter: Articles

Article

U.S. Military Deployment

and Host-Nation

Economic Growth

Uk Heo

1,2

and Min Ye

3

Abstract

Since the end of World War II, the U.S. military has deployed its troops all over the

world for regional security and/or peace building. Despite the importance of its

political, economic, and militaryimpact on the region, few studies examined how U.S.

military deployment overseas affects the host nation’s economy except Jones and

Kane (2012) and Kane (2012). To help fill the gap in the literature, we tested how

substantialU.S. troop deployment (more than100 troops on average) affects thehost

state’s investment, trade, political development, andeconomic growth for the period

from 1960 to2014, using the seemingly unrelated regression(SUR) model. The results

show that the presenceof U.S. troops does promote investment,trade, and economic

growth in the host state. The United States deploys troops for regional security

purposes, but these deployments also help economic growth directly and indirectly.

Keywords

U.S. troop deployment, economic growth, investment, trade, political development,

host nation

1

Department of Political Science, University of Wisconsin–Milwaukee, Milwaukee, WI, USA

2

Department of Political Science, Kyung Hee University, Seoul, South Korea

3

Department of Politics, Coastal Carolina University, Conway, SC, USA

Corresponding Author:

Uk Heo, Department of Political Science, University of Wisconsin–Milwaukee, PO Box 413, Milwaukee,

WI 53201, USA.

Email: heouk@uwm.edu

Armed Forces & Society

2019, Vol. 45(2) 234-267

ªThe Author(s) 2017

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DOI: 10.1177/0095327X17738219

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Since the end of World War II, the U.S. military has deployed its troops all over the

world for regional security and peace building. According to Kane (2012, p. 255),

“Counting one soldier serving in a country for 1 year as a troop-year, the number of

US troop-year deployments on foreign soil from 1950 to 2009 is 31 million, or

30,597,594 to be exact.” On average, about half a million (455,888) or about

22.1%of U.S. total military forces were deployed overseas annually between

1960 and 2014.

1

To get a broad view of U.S. military presence abroad, we described

the number and percentage of U.S. troops overseas between 1960 and 2014 in

Figure 1 and the regions they are deployed in Figure 2.

As shown in Figure 2, the U.S. military presence has long been heavily concen-

trated in Europe and East Asia, the two major fronts of the Cold War, but the Middle

East became a major destination in the new century as a consequence of the War on

Terror. However, as U.S. troops withdrew from Iraq and Afghanistan, the previously

stark regional differences started tapering off. Today, U.S. troops are more evenly

deployed across the globe.

As of 2014, the U.S. military maintains approximately 800 bases in 160 countries.

The cost to maintain these bases is about US$85 billion annually, but the figure

increases to US$156 billion if we include the U.S. military presence in Afghanistan

and Iraq (Vine, 2015a). In 2005, the last year data were available, U.S. military bases

overseas were valued at least US$127 billion and employed 81,425 local residents

(Johnson, 2006).

Figure 1. Number and percentage of U.S. troops in foreign countries (1960–2014).

Heo and Ye 235

Despite theimportance of its political,economic, and military impacton the region,

few studies have examined how U.S. militarydeployment overseas affects the econo-

mies of host nation (Schramm, 2010). According to Jones and Kane (2012), the

literature on the political economy of security has generally focused on the relation-

ship between defense spending and economic performance using supply-side or

demand-side models (e.g., Dunne & Tian, 2015; Heo, 2010;Heo & Bohte, 2012; Heo

& Ye, 2016; Hou & Chen, 2013; Yilgo¨r, Karago¨l, & Saygili, 2 014). Exceptions are

Jones and Kane’s (2012), Kane’s (2012), and Bell, Clay, and Machain’s (in press)

studies. Jones and Kane studied the impact of U.S. troop deployment on economic

growth, and Kane’s (2012) work dealt with the effects of U.S. troop presence on

measures of social development, such as life expectancy, child mortality rates, and

the number of telephone lines. On theother hand, Bell et al. (in press) investigated the

effects of U.S. troop deployment on the quality of human rights in host nations.

Intrigued by Jones and Kane’s (2012) work, we advance our understanding by

analyzing the indirect effects of U.S. troop deployment on the economies of host

nations. Specifically, we focus on how the presence of U.S. troops affects invest-

ment, trade, political development, and economic growth. For instance, the primary

benefit to a host country of having U.S. troops deployed within its borders is security

enhancement, which also strengthens stability in the region (Jones & Kane, 2012).

Improved security and stability bring additional spillover effects, such as greater

domestic and foreign direct investment (FDI), and increased trade with the United

Figure 2. U.S. troops in different regions (1960–2014).

236 Armed Forces & Society 45(2)