Warfare, Economic Performance And The Struggle For World Hegemony In The Early Modern Period: Guns Versus Butter In Eighteenth-Century Britain And Spain

Testing the existence of budgetary trade-offs in eighteenth-century Britain and Spain can contribute to resolve the debate on the economic impact of warfare and its relationships with the military potential of nations and the struggle for world supremacy during the early modern period. We have constructed several empirical models to search for trade-offs in order to show which country had the whip hand in achieving its military and economic objectives. Britain was ahead of Spain for several reasons. Britain was more efficient in deploying the available resources because it built an effective national bureaucracy. Furthermore, the institutional reforms made from the seventeenth century onwards increased the level of resources through enhancement of the British economy.