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Measuring the Peace Dividend in the United Kingdom

Author

Listed:
  • Terry Barker

    (Department of Applied Economics, Cambridge)

  • Paul Dunne

    (Department of Applied Economics and Magdalene College, Cambridge)

  • Ron Smith

    (Birkbeck College, London)

Abstract

The changing strategic climate in Europe has led to considerable speculation about major cuts in military spending. This paper examines the economic implications of such reductions in military spending for the UK. The international economic and strategic context is discussed and then a multi-sectoral macro-economic model is used to evaluate the impact of cutting UK defence spending. The simulation results show that a reduction in military expenditure to one-half of its 1992 level by the year 2000, with the released `peace dividend' allocated to other government current and capital expenditures, would lead to a reduction in unemployment of 0.52 million and an increase in output above base by 1.84%. While these results do hide potential problems at industry, company, region and local community levels, it is argued that these problems of transition are both smaller and less difficult to deal with than those experienced in the past. The restructuring of the arms industry is already taking place and the required local adjustments are no worse than those experienced by traditional manufacturing industry over the past decade and, with careful planning, could be made painless. Overall, it is clear that with sensible adjustment policies the reduction of military spending provides an opportunity for improved economic performance.

Suggested Citation

  • Terry Barker & Paul Dunne & Ron Smith, 1991. "Measuring the Peace Dividend in the United Kingdom," Journal of Peace Research, Peace Research Institute Oslo, vol. 28(4), pages 345-358, November.
    • Handle: RePEc:sae:joupea:v:28:y:1991:i:4:p:345-358
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    Cited by:

    1. Jacques Fontanel, 1993. "Méthodes, hypothèses et concepts relatifs à l'économie du désarmement," Post-Print hal-03183808, HAL.
    2. Jacques Fontanel, 1993. "Le désarmement dans l'histoire des faits et des pensées économiques," Post-Print hal-03183984, HAL.
    3. Paul, Jomon A. & Bagchi, Aniruddha, 2023. "Immigration, terrorism, and the economy," Journal of Policy Modeling, Elsevier, vol. 45(3), pages 538-551.
    4. Jenn-Hong Tang & Cheng-Chung Lai & Eric Lin, 2009. "Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 253-267.
    5. Eric S. Lin & Hamid E. Ali, 2009. "Military Spending and Inequality: Panel Granger Causality Test," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(5), pages 671-685, September.
    6. Bragoudakis Zacharias G. & Zombanakis George A., 2017. "Earning a Peace Dividend in a Crisis Environment: The Greek Case," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 23(3), pages 1-15, August.
    7. Jacques Fontanel, 1993. "L'impact économique d'un désarmement pour le développement," Post-Print hal-03184224, HAL.
    8. Antonio Fonfria & Paulina Correa-Burrows, 2010. "Effects Of Military Spending On The Profitability Of Spanish Defence Contractors," Defence and Peace Economics, Taylor & Francis Journals, vol. 21(2), pages 177-192.
    9. Kristian Colletis-Wahl & Jacques Fontanel & Ludovic Noël & Bernard Reverdy, 2005. "Les configurations de la reconversion des industries liées à la défense. Le rôle des PME, PMI," Working Papers hal-03220888, HAL.
    10. Ming Zhong & Tsangyao Chang & D. P. Tang & Yemane Wolde-Rufael, 2015. "The causal nexus between military spending and unemployment in the G7: a bootstrap panel causality test," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(6), pages 609-622, December.
    11. Jacques Fontanel, 1992. "Les dépenses d'armement : fardeau ou bénéfice ?," Post-Print hal-03286814, HAL.
    12. Jacques Fontanel, 1995. "Le désarmement pour le développement," Post-Print hal-03328523, HAL.
    13. Colletis-Wahl Colletis-Wahl & Jacques Fontanel & Ludovic Noël & Bernard Reverdy, 1995. "Restructuration régionale du secteur de l'armement," Working Papers hal-03208217, HAL.

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