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Security Gradient and National Defense - The Optimal Choice between a Draft Army and a Professional Army


  • Vesa Kanniainen
  • Staffan Ringbom


The earlier work on the optimal design of the national security has focused on the opportunity cost of the draft in terms of foregone human capital formation. The current paper introduces the national security into the welfare analysis missing from the earlier work. This creates a trade-off between the private goods and the security as a public good in the social cost-benefit analysis. There are three major results. First, and arising from the intergenerational interaction, it is optimal to introduce a pay to the young generation when in duty even by resorting to a distortive tax. Second, when optimizing the size of the army, the optimal choice between the draft army and the professional army depends on the risk class of the country. A security gradient arises. Third, the choice is linked to the size and the quality of the reserve generated by the two approaches.

Suggested Citation

  • Vesa Kanniainen & Staffan Ringbom, 2014. "Security Gradient and National Defense - The Optimal Choice between a Draft Army and a Professional Army," CESifo Working Paper Series 4707, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4707

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    References listed on IDEAS

    1. John T. Warner & Beth J. Asch, 2001. "The Record and Prospects of the All-Volunteer Military in the United States," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 169-192, Spring.
    2. Poutvaara, Panu & Wagener, Andreas, 2007. "To draft or not to draft? Inefficiency, generational incidence, and political economy of military conscription," European Journal of Political Economy, Elsevier, vol. 23(4), pages 975-987, December.
    3. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
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    More about this item


    national security; draft; professional army; risk class;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement


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