The demand for military expenditure
In: Handbook of Defense Economics
AbstractThis chapter provides an analytical survey of models explaining the level of military expenditure, emphasizing empirical econometric models based on optimizing behavior. After setting out the standard neo-classical model in which nation states are represented as rational agents maximizing a welfare function depending on security and economic variables subject to a budget constraint, the chapter considers: criticisms of this model, alternative theoretical specifications, data and measurement issues, alternative econometric approaches and reviews selected studies.
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