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An Alternative Answer to: Who Pays for Defense?

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  • Hollenhorst, Jerry
  • Ault, Gary

Abstract

In a recent article (this Review, 63 [June, 1969]), Bruce Russett attempts to answer the title question by using two-variable regression analysis to estimate the “trade-off” relationships between the defense spending proportion of Gross National Product (GNP) and the other nondefense expenditure proportions of GNP for the 1939–68 period. This paper contends that Russett's method of analysis is misleading because it does not permit the detection of possible subperiod shifts in the trade-off relationships. The results of a multiple regression, dummy variable analysis indicate that significant shifts in both the sign and the numerical values of the trade-off relationships occurred between the three war periods and the peacetime period. Two attempts to identify the reasons for the shifts produced mixed results, but our tentative conclusion is that the shifts are related to subperiod differences in the unemployment rate and the methods of financing defense expenditures.

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  • Hollenhorst, Jerry & Ault, Gary, 1971. "An Alternative Answer to: Who Pays for Defense?," American Political Science Review, Cambridge University Press, vol. 65(3), pages 760-763, September.
    • Handle: RePEc:cup:apsrev:v:65:y:1971:i:03:p:760-763_13
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    Cited by:

    1. José Jurado Sánchez, 2012. "¿Se financió la defensa a costa del gasto social y la economía en el siglo XX? El dilema cañones versus mantequilla," Hacienda Pública Española / Review of Public Economics, IEF, vol. 203(4), pages 89-117, December.
    2. Glismann, Hans H. & Horn, Ernst-Jürgen & Schrader, Klaus, 1993. "Wohlfahrtseffekte von Rüstungs- und Raumfahrtausgaben: Das Beispiel der Vereinigten Staaten," Open Access Publications from Kiel Institute for the World Economy 783, Kiel Institute for the World Economy (IfW Kiel).
    3. Onur Ozsoy, 2002. "Budgetary Trade-Offs Between Defense, Education and Health Expenditures: The Case of Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(2), pages 129-136.
    4. Rabia Aslam, 2007. "Measuring The Peace Dividend: Evidence From Developing Economies," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(1), pages 39-52.
    5. Schrader, Klaus, 1989. "Gesamtwirtschaftliche Wirkungen von Rüstungs- und Raumfahrtausgaben in den Vereinigten Staaten: Eine Literaturanalyse," Open Access Publications from Kiel Institute for the World Economy 1416, Kiel Institute for the World Economy (IfW Kiel).
    6. José Jurado Sánchez & Juan Ángel Jiménez Martín, 2014. "Guns, Economic Growth and Education during the second half of the Twentieth Century: Was Spain different?," Documentos de Trabajo del ICAE 2014-14, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    7. Schrader, Klaus, 1989. "Gesamtwirtschaftliche Wirkungen von Rüstungs- und Raumfahrtausgaben in den Vereinigten Staaten: eine Literaturanalyse," Kiel Working Papers 366, Kiel Institute for the World Economy (IfW Kiel).

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