Opportunity Costs of Defense: Some Cross-National Evidence

This paper assesses the impact of changes in military spending on spending levels for public education and public health in a number of countries for selected years from 1950-1972. First, the opportunity costs argument is evaluated across all the nations selected and then two intervening variables — level of economic development and regime type — are introduced to specify the relationship. The major findings are: (1) opportunity costs do exist for education and health across all nations and all years, but they are weak in magnitude; (2) levels of economic development have little or no impact upon the opportunity costs for these policy areas; (3) personalist regimes tend to have higher opportunity costs of defence than do centrist and polyarchic regimes. With regard to the latter two regime types, an additional finding occurs: centrist regimes in recent years are lowering their opportunity costs of defense for education and health while polyarchic regimes have been increasing theirs. Implications of the findings for the opportunity costs notion are then summarized.