Venezuela and Military Expenditure Data

The Stockholm International Peace Research Institute (SIPRI) and the International Institute of Strategic Studies (IISS) both publish datasets on military expenditure that are widely used by scholars and military analysts. This article illustrates the limitations in the reliability and validity of these data, using a case study of contemporary Venezuela to highlight the issues. There is a debate over recent Venezuelan military expenditure under President Chávez: some argue that the expenditure has increased dramatically; others argue that it has not. The SIPRI and IISS datasets ought to be tailor-made for resolving this debate, but the estimates they provide are significantly flawed: military spending is reported to be quite low and to have declined as a percentage of GDP. New evidence presented in this article suggests that Venezuela's recent military expenditures were typically at least 20% to 70% higher than the estimates provided by SIPRI and IISS. Moreover, the military expenditures have at least kept pace with GDP growth as oil revenues increased over the period 2002-08. A key source of the discrepancy in the estimates is the way in which extra-budgetary purchases, especially of foreign arms and supplies, are treated. In some states, such as Venezuela in recent years, extra-budgetary purchases are responsible for a large portion of the expenditure, but these purchases are frequently not captured by standard data sources.