Military Expenditures and Economic Growth

by Castillo, Jasen; Lowell, Julia; Tellis, Ashley J.; Munoz, Jorge; Zycher, Benjamin

• ISBN13: 9780833028969
• ISBN10: 0833028960
• Format: Paperback
• Copyright: 2001-06-12
• Publisher: RAND Corporation

Summary

This study explores the historical relationship between economic growth and military expenditures in five great power countries: Germany, France, Russia, Japan, and the United States. Using statistical and case-study methodologies, the authors examine how each country's military expenditures responded to increases in economic output levels and in economic growth during the period 1870-1939, and they offer explanations for the relationship in each country. If historical experience holds true, economic growth in some of the present-day candidates for great-power status will spur them to increase the growth rate of their military expenditures and, as a result, their military capabilities. But each country is unique, and strong economic growth need not imply a commensurate expansion of military spending or capability. History suggests that preceived threats from abroad may be the most important factor leading potential great powers to increase military expenditures.

Table of Contents

Preface	iii
Figures	vii
Tables	ix
Summary	xi
Defining the Problem	1	(4)
A Brief Review of the Statistical Literature	5	(6)
Empirical Determination of the Growth-Military Expenditures Relationship	11	(38)
Data Description	11	(8)
National Output Measures	12	(2)
Military Expenditure Measures	14	(1)
Military Personnel Measures	15	(1)
Government Expenditure Measures	16	(1)
Political Participation Measure	17	(2)
Trends in Economic Output and Military Expenditures for Five Great Powers	19	(16)
Cross-National Trends	19	(2)
Individual Country Trends	21	(14)
Statistical Analysis of Military Spending and Economic Output	35	(11)
Model 1	36	(6)
Model 2	42	(4)
Conclusion	46	(3)
Alternative Hypotheses About the Growth-Military Expenditures Relationship	49	(14)
Three Motives for Increasing Military Expenditures	49	(13)
Hypothesis One (Ambition):	50	(3)
Hypothesis Two (Fear):	53	(4)
Hypothesis Three (Legitimacy):	57	(5)
Conclusion	62	(1)
Historical Case Studies of the Alternative Hypotheses	63	(32)
France: Coping with Germany	64	(6)
Germany: Two Failed Bids for European Hegemony	70	(6)
Japan: Military Governments and the Search for Autarky	76	(7)
Russia: International Troubles and Domestic Struggles	83	(5)
The United States: Expansion on the Cheap	88	(6)
Conclusion	94	(1)
Should the United States Worry About Large, Fast-Growing Economies?	95	(10)
Avenues for Future Research	97	(8)
The Ambition Hypothesis	98	(1)
The Fear Hypothesis	99	(2)
The Legitimacy Hypothesis	101	(4)
Bibliography	105