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Thereafter, spending among
European allies and Canada increase their defense spending from 2016 to 2017 by approximately 4.87 percent. There has a significant increase in the defence spending of some Eastern Europe countries as they see a threat from Russia after the annexation of Crimea, this significant threat has seen an increase in deployment to defence equipment to this region from the likes of the United Kingdom and the United States of America. Although there has been a significant increase in the defence expenditure in some members of the alliance there are a number of countries who are very far away from reaching the 2 percent defence expenditure target.
193:
allocation among specific missions and outputs such as arms control, disarmament, civil defense, sealift, arms conversion, mobilization bases, or weaponry composition. At the same time, different ways these goals can be achieved are analyzed on lower levels. These consist of finding the optimal choice between alternative logistic arrangements, rifles, specialized equipment, contract provisions, base locations and so on. Since the defense management of a country consists of choosing between many substitutes, an analysis of costs and benefits of various options is vital.
1179:
446:
172:, the main topics included superpower arms races, establishment of strong and lasting alliances and nuclear weapon research. Afterwards, the focus shifted to conversion opportunities, disarmament and the peace dividend availability. And at the beginning of the new millennium, the research shifted its attention to an increasing number of regional and ethnic conflicts (Africa, Bosnia, Kosovo, Afghanistan, Iraq), international terrorist threats (terrorist attacks on the USA) and weapons of mass destruction. Besides that, much work was dedicated to
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232:. One branch of defense economics takes an institutional approach to analyze defense resource allocations. This approach aims to maximize the effectiveness and the efficiency of military performance, and provide measures targeted at improving the management of armies. This area also studies critical infrastructures such as road, rail, water, health, electricity, and cybersecurity networks, to improve their resilience against intentional attacks.
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136:. However, importance of the field grew especially in the late 1980s and early 1990s due to political instability caused by the breakup of the Soviet Union and liberation of Eastern Europe. This resulted in the publication of a complex overview of the current state of the field in 1995 from Todd Sandler and Keith Hartley called
1504:
was concerned that not all NATO members are "chipping in" toward the cost of a collective defense and deterrent against Russia at the time of
Ukrainian Russian conflict. According to the 2017 NATO Annual Report on Defence Expenditure, the United States of America spends almost twice the amount of US
208:
These two are closely intertwined since finding an optimal choice is worthless if institutions lead decision-makers to different choices, just as functioning institutions do not provide much help if an optimal choice is not found. An absence of a widely accepted tool to calculate the change in value
264:
In the
Neoclassical theory, military spending can be considered as a public good. The government acts as a rational agent, trying to maximise the welfare of society by taking into account the security benefits, the opportunity costs and the trade-off between military and civil spending. This theory
192:
The field revolves around finding the optimal resource allocation among defense and other functions of the government While the primal goal is to find the optimal size of the defense budget with respect to sizes of other budgets managed by the public body, the field also studies the optimization of
1492:
At the Wales Summit, it was also agreed that Allies who currently spend less than 20% of their annual defense spending on major new equipment, including related
Research & Development, will aim, within a decade, to increase their annual investments to 20% or more of total defense expenditures.
1484:
At the Prague Summit 2002, with the 9/11 terror attack not in the distant past and the enlargement of NATO into
Eastern Europe (Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia), member states agreed the need to strengthen the alliance's ability to deal with a wide range of new
268:
The best known neoclassical model is the one of Feder-Ram, developed by Biswas and Ram in 1986, and adapted by Feder a few years later. It mainly focuses on the effects of military spending on economic growth of developing countries through the export effect, thanks to a cross-country study. This
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After defense spending cuts during the Global
Recession, members of the alliance agreed at the Wales Summit 2014 that those that did not already meet the defense spending guidelines to stop cuts to associate budget, gradually increase spending, and aim to move towards the goal within a decade.
1485:
threats. After this summit, member countries committed to establishing a minimum level of acceptable defense spending of 2% of annual GDP. As of 2016 figures, only five member states (United States of
America, Estonia, United Kingdom, Poland and Greece) have reached this figure.
209:
when choosing among various options represents a major difficulty in the economics of defense because it makes the identification of the optimal allocation practically impossible. Differences of opinions on security and threat protection topics are common between people.
285:). According to Faini et al. (1984), military spending can increase growth, through an increase of capacity utilization, investment and profits. This theory is criticized because it is mainly focussed on the demand side and not enough on the supply and production side.
68:). It is an economic field that studies the management of government budget and its expenditure during mainly war times, but also during peace times, and its consequences on economic growth. It thus uses macroeconomic and microeconomic tools such as
151:
from the 18th century BC can be considered one of the earliest works dealing with problems and questions of the economics of defense. Similarly, economic aspects of war and military operations are broken down in a great detail in
2173:
325:). During the early 2000s, the United States' national defense budget rose to about $ 800 billion per year. In recent years, it has dropped to $ 600 billion annually, which is still a large figure relative to
1493:
According to 2017 estimate figures, 12 countries will have reached this target (Romania, Luxembourg, Lithuania, Turkey, Bulgaria, United States, Norway, France, Poland, United
Kingdom, Italy and Slovakia).
196:
Economizing in the economics of defense represents the principle of reallocating available scarce resources such that an output of the greatest possible value is produced. This can be achieved in two ways:
1500:, then a presidential candidate, described NATO as "obsolete" but has since withdrawn these claims, he continued to argue that the allies must spend more on their defense. The previous president
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Dollars on
Defence than their European and Canadian colleagues. Even with the significant difference in the expenditure NATO allies account for 70 percent of the global total military expenses.
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145:
While the science as such started developing in the 20th century, many of its topics can be found long before then. For example, the first written set of laws called the
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and other alliances that accepted new members and continued with developing new missions, rules and international organizations, an example being the
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In the
Keynesian theory, in case of ineffective aggregate demand, military spending increases the output of a country (see also
1023:
165:, political institutions emerged and a great step forward was made in military with the invention of devices using gunpowder.
1364:
931:
655:
1867:
Anderson, Gary M. (1992-04-01). "Cannons, castles, and capitalism: The invention of gunpowder and the rise of the west".
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is often criticized because of its unrealistic assumptions, for example its assumption about the rational agent theory.
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from 1960. A great contribution to the subject came in 1975 when the British economist G. Kennedy published his book
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In recent times, American presidents have become critical of the defense spending of their European NATO allies.
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301:(1966), this type of government spending enable to control wages and profits in case of underconsumption.
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216:, which involve allocation optimization and optimal choice identification, it also looks into several
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220:, which focus on the impact of defense expenditures on various macroeconomic variables such as
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model is criticized because military spending represents one single explanatory variable in a
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The Marxist theory considers military spending as necessary for the development of the
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Handbook in Defense Economics, Defense Economics in the post-cold war era. Volume 1
1501:
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81:
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Generally, developments in defense economics reflect current affairs. During the
17:
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298:
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69:
50:
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1610:
Defense Economics: Perspectives on Air Forces, Air Defense and Aerial Warfare.
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43:. It is a relatively new field. An early specialized work in the field is the
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36:
1988:
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In terms of economics, a distinctive feature of the defense is that it is
2311:"Obama concerned not all NATO members 'chipping in' for Russia deterrent"
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326:
169:
120:
was originally published. A major step forward can be then accredited to
204:
Improvement of the institutional arrangements that shape defense choices
1339:
880:
627:
153:
2234:"Results are in: Here's how much NATO allies spent on defense in 2017"
2004:
The security of critical infrastructures risk, resilience and defense
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1087:
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834:
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2149:"Data for all countries from 1988–2016 in constant (2015) USD (pdf)"
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1316:
1270:
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811:
673:
601:
523:
445:
1439:
1041:
857:
173:
1746:
Kramer, Mark (December 2011). "The Demise of the Soviet Bloc".
112:
The roots of the science can be tracked back to the 1920s when
317:), soft power (diplomacy and foreign assistance) and domestic
1615:
Social Science Research Network (SSRN). Accessed 21 May 2019.
84:. It has strong ties to other subfields of economics such as
1578:
Handbook in Defense Economics, Defense in a globalized World
2056:
by Giorgio d'Agostino and J Paul Dunne and Luca Pieroni,
297:
in class struggle and capitalism. According to Baran and
39:, an application of the economic theory to the issues of
1644:
The Economics of Defence Policy : A New Perspective
2058:
Assessing the Effects of Military Expenditure on Growth
2090:
Sawhill, Alice M. Rivlin and Isabel V. (March 2004).
1907:
Defense economics : an institutional perspective
2282:"Defence Expenditure of NATO Countries (2010-2017)"
2253:"Defence Expenditure of NATO Countries (2010-2017)"
2205:"Defence Expenditure of NATO Countries (2010-2017)"
2070:
1718:
2050:
2048:
2046:
1971:International encyclopedia of the social sciences
212:Although the economics of defense mainly studies
2128:Stockholm International Peace Research Institute
1613:Conflict Studies: Inter-State Conflict eJournal.
343:Stockholm International Peace Research Institute
1533:Defense economics: An institutional perspective
255:General economic theories of military spending
2178:International Institute for Strategic Studies
1900:
1898:
1546:Hitch, Charles J.; McKean, Roland N. (1960).
358:International Institute for Strategic Studies
8:
2121:"Trends in World Military Expenditure, 2016"
1973:(Reprint ed.). New York: Macmillan Co.
1784:Hartley, Keith; Sandler, Todd (1995-12-11).
1770:– via The University of Chicago Press.
1576:Hartley, Keith; Sandler, Todd (Ed.) (2007).
1561:Hartley, Keith; Sandler, Todd (Ed.) (1995).
1548:The Economics of Defense in the Nuclear Age
130:The Economics of Defense in the Nuclear Age
1937:: CS1 maint: location missing publisher (
1130:
369:
2107:"The recipe for a healthy defense budget"
1819:"The Political Economy of The Art of War"
247:. As such, it may suffer the so-called "
1602:
329:averages and other countries' budgets.
1930:
2039:The Concise Encyclopedia of Economics
1964:
1962:
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7:
2105:Livingston, Ian (6 September 2016).
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201:Improvement of the economic calculus
182:European Security and Defence Policy
161:from the 5th century BC. During the
90:economics of industrial organization
2072:"What is the Keynesian multiplier?"
351:SIPRI Military Expenditure Database
1480:North Atlantic Treaty Organization
313:uses a combination of hard power (
25:
1817:McCaffrey, Matthew (2014-08-08).
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333:Military defense spending tables
49:The Economics of Defense in the
2309:Zezima, Katie (26 March 2014).
2002:Keupp, Marcus Matthias (2020).
1905:Keupp, Marcus Matthias (2021).
1531:Keupp, Marcus Matthias (2021).
65:1960, also published as a book
141:Handbook of Defense Economics.
1:
2174:"Top 15 Defence Budgets 2015"
1786:Handbook of defense economics
1748:The Journal of Modern History
1550:. Harvard University Press.
2232:Banks, Martin (2018-03-15).
1838:10.1080/01495933.2014.941725
1694:The Political Economy of War
114:The Political Economy of War
2092:"How to Balance the Budget"
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362:Top 15 Defence Budgets 2015
295:Military-industrial complex
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1725:. Rowman and Littlefield.
367:
1881:10.1080/10430719208404723
239:, and as such it is both
1969:Sills, David L. (1972).
1721:The Economics of Defence
271:simple linear regression
134:The Economics of Defence
2037:by Benjamin Zycher in:
1788:. Amsterdam: Elsevier.
1680:Encyclopedia Britannica
1642:Hartley, Keith (2011).
260:The Neoclassical theory
94:international economics
226:gross domestic product
74:comparative statistics
1692:Pigou, A. C. (1921).
1646:. London: Routledge.
283:Military keynesianism
1826:Comparative Strategy
1717:Kennedy, G. (1975).
748:United Arab Emirates
277:The Keynesian theory
218:macroeconomic topics
214:microeconomic topics
29:economics of defense
1675:"Defense Economics"
1520:Economic militarism
2347:Military economics
2342:1960 introductions
2006:. Cham: Springer.
1677:by Gavin Kennedy,
289:The Marxist theory
249:free rider problem
178:the European Union
118:Arthur Cecil Pigou
2352:National security
2184:on 25 August 2016
2013:978-3-030-41826-7
1916:978-3-030-73815-0
1869:Defence Economics
1703:978-1-330-87596-4
1653:978-0-415-27132-5
1590:978-0-444-51910-8
1584:. North Holland.
1571:978-0-444-81887-4
1565:. North Holland.
1556:978-0-674-86588-4
1541:978-3-030-73815-0
1477:
1476:
1473:
1472:
1127:
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932:Republic of China
323:homeland security
319:counterterrorism
148:Code of Hammurabi
35:is a subfield of
33:defense economics
18:Defence Economics
16:(Redirected from
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2180:. Archived from
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102:growth economics
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41:military defense
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581:United Kingdom
571:
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241:non-excludable
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158:The Art of War
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86:public finance
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126:Roland McKean
123:
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115:
107:
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67:
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60:Roland McKean
57:
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42:
38:
34:
30:
19:
2318:. Retrieved
2314:
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2288:
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2263:. Retrieved
2259:
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2238:Defense News
2237:
2227:
2215:. Retrieved
2211:
2198:
2186:. Retrieved
2182:the original
2168:
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2143:
2131:. Retrieved
2115:
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2085:
2077:Investopedia
2076:
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2003:
1997:
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1906:
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1535:. Springer.
1532:
1502:Barack Obama
1498:Donald Trump
1495:
1491:
1487:
1483:
1207:Saudi Arabia
503:Saudi Arabia
404:
399:
395:World total
394:
361:
356:List by the
355:
346:
341:List by the
340:
308:
292:
280:
267:
263:
237:public goods
234:
211:
207:
195:
191:
167:
156:
146:
144:
140:
137:
133:
129:
113:
111:
82:econometrics
48:
32:
28:
26:
2188:13 December
2158:13 December
2133:13 December
1515:War finance
1365:South Korea
1024:Netherlands
656:South Korea
299:Paul Sweezy
163:Middle Ages
70:game theory
51:Nuclear Age
2336:Categories
2289:NATO Media
2260:NATO Media
2212:NATO Media
2022:1153811682
1925:1252763738
1597:References
1526:Literature
349:(for 2016)
230:employment
188:Principles
2060:, Chap XX
2035:"Defense"
1933:cite book
1889:1043-0717
1846:0149-5933
1768:144069540
1662:804038580
1405:Australia
1142:($ Bn.)
1140:Spending
1070:Indonesia
909:Singapore
702:Australia
379:Spending
154:Sun Tzu's
37:economics
1909:. Cham.
1854:53484253
1804:33101470
1582:Volume 2
1509:See also
978:Colombia
955:Pakistan
381:($ Bn.)
327:Cold War
170:Cold War
2154:. SIPRI
1989:3249566
1345:Germany
1137:Country
886:Algeria
633:Germany
376:Country
108:History
47:report
2280:NATO.
2251:NATO.
2203:NATO.
2020:
2010:
1987:
1977:
1923:
1913:
1887:
1852:
1844:
1802:
1792:
1766:
1729:
1700:
1660:
1650:
1588:
1569:
1554:
1539:
1465:Israel
1385:Brazil
1299:France
1230:Russia
1188:145.8
1165:597.5
1116:Kuwait
1093:Mexico
1001:Poland
840:Turkey
794:Canada
771:Israel
725:Brazil
555:France
477:Russia
2320:1 May
2294:1 May
2285:(PDF)
2265:1 May
2256:(PDF)
2217:1 May
2208:(PDF)
2152:(PDF)
2124:(PDF)
1850:S2CID
1822:(PDF)
1764:S2CID
1469:18.6
1449:21.1
1429:21.6
1425:Italy
1409:22.8
1389:24.3
1369:33.5
1349:36.7
1326:41.0
1322:Japan
1303:46.8
1280:48.0
1276:India
1257:56.2
1234:65.6
1211:81.9
1184:China
1054:16.7
817:Spain
679:Italy
607:Japan
529:India
455:215.7
451:China
429:611.2
400:1,686
384:% of
2322:2018
2296:2018
2267:2018
2219:2018
2190:2017
2160:2017
2135:2017
2018:OCLC
2008:ISBN
1985:OCLC
1975:ISBN
1939:link
1921:OCLC
1911:ISBN
1885:ISSN
1842:ISSN
1800:OCLC
1790:ISBN
1727:ISBN
1698:ISBN
1658:OCLC
1648:ISBN
1586:ISBN
1567:ISBN
1552:ISBN
1537:ISBN
1445:Iraq
1134:Rank
1123:6.5
1100:0.6
1077:0.9
1047:Oman
1031:1.2
1008:2.0
985:3.4
962:3.4
939:1.9
916:3.4
893:6.7
890:10.6
870:3.0
867:12.3
863:Iran
847:2.0
844:14.9
824:1.2
821:14.9
801:1.0
798:15.5
778:5.8
775:17.8
755:5.7
752:22.8
732:1.3
729:22.8
709:2.0
706:24.3
686:1.5
683:27.9
663:2.7
660:36.8
640:1.2
637:41.1
614:1.0
611:46.1
588:1.9
585:48.3
562:2.3
559:55.7
536:2.5
533:55.9
507:63.7
484:5.3
481:69.2
458:1.9
432:3.3
373:Rank
243:and
228:and
174:NATO
124:and
100:and
80:and
58:and
27:The
1877:doi
1834:doi
1756:doi
1120:6.3
1097:6.8
1074:7.7
1051:9.0
1028:9.2
1005:9.7
982:9.9
959:9.9
936:9.9
913:9.9
510:10
405:2.2
386:GDP
251:".
138:The
116:by
54:by
31:or
2338::
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1105:30
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1059:28
1036:27
1013:26
990:25
967:24
944:23
921:22
898:21
875:20
852:19
829:18
806:17
783:16
760:15
737:14
714:13
691:12
668:11
645:10
273:.
224:,
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2240:.
2221:.
2192:.
2162:.
2137:.
2109:.
2094:.
2024:.
1991:.
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1927:.
1891:.
1879::
1873:3
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1836::
1806:.
1758::
1735:.
1706:.
1664:.
1592:.
1573:.
1558:.
1543:.
1334:9
1332:0
1311:8
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1288:7
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1265:6
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1242:5
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1219:4
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1196:3
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1173:2
1171:0
1150:1
1148:0
622:9
620:0
596:8
594:0
570:7
568:0
544:6
542:0
518:5
516:0
492:4
490:0
466:3
464:0
440:2
438:0
414:1
412:0
321:(
62:(
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