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Military spending, fiscal capacity and the democracy puzzle

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  • Rota, Mauro

Abstract

This article elucidates the complex and occasionally counter-intuitive effects of the twin phenomena of democratization and modernization on the path of military spending between 1880 and 1938 by analyzing the relationship between various traits of democracy and the state's fiscal capacity. The conclusion, in the spirit of Kant, is that it is political participation which is most effective in reducing military spending. Other elements of democracy play a distant secondary role. In addition, fiscal capacity, which often emerges and increases in tandem with democratization, is identified as one of the major determinants of defense outlays, although its impact decreased between the two World Wars.

Suggested Citation

  • Rota, Mauro, 2016. "Military spending, fiscal capacity and the democracy puzzle," Explorations in Economic History, Elsevier, vol. 60(C), pages 41-51.
    • Handle: RePEc:eee:exehis:v:60:y:2016:i:c:p:41-51
    DOI: 10.1016/j.eeh.2015.11.002
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    Cited by:

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    2. Sajjad F. Dizaji & Mohammad Reza Farzanegan, 2023. "Democracy and Militarization in Developing Countries: A Panel Vector Autoregressive Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 34(3), pages 272-292, April.
    3. Kramer, Bert S. & Milionis, Petros, 2022. "Democratic constraints and adherence to the classical gold standard," Explorations in Economic History, Elsevier, vol. 84(C).
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    5. Geloso, Vincent J. & Salter, Alexander W., 2020. "State capacity and economic development: Causal mechanism or correlative filter?," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 372-385.

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    More about this item

    Keywords

    Military spending; Democracy; State capacity; Political participation;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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