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The Real Military Balance: International Comparisons of Defense Spending

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  • Peter E. Robertson

Abstract

International comparisons of military spending are necessary for monitoring security risks, assessing defense capabilities, and planning defense budgets. Nevertheless, conventional comparisons do not allow for differences in defense sector input prices across countries. I use defense sector budget data to construct a database of military purchasing power parity (PPP) exchange rates for 59 countries. Real military spending in many countries, including Russia and China, is found to significantly exceed conventional estimates based on market exchange rates and GDP‐PPP exchange rates. Similarly, the US share of world military spending is substantially diminished.

Suggested Citation

  • Peter E. Robertson, 2022. "The Real Military Balance: International Comparisons of Defense Spending," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(3), pages 797-818, September.
    • Handle: RePEc:bla:revinw:v:68:y:2022:i:3:p:797-818
    DOI: 10.1111/roiw.12536
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    Cited by:

    1. Florian Dorn, 2024. "Defense Spending for Europe’s Security – How Much Is Enough?," EconPol Policy Brief 66, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Andreas Baur & Lisandra Flach & Sebastian Link & Andreas Peichl, 2024. "Who’s Afraid of Trump in the White House? How German Firms View the US Election," EconPol Policy Brief 65, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

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