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Does Neutrality Make A Difference? Explaining Patterns Of Swiss Defense Spending In 1975-2001

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  • Thomas Bernauer
  • Vally Koubi
  • Fabio Ernst

Abstract

We study the behavior of defense spending in Switzerland over 1975-2001. Our main interest is in determining how neutrality in international affairs (non-membership in military alliances) affects defense spending. We find that neutrality is associated with a perception of lower levels of external threat; hence it confers economic benefits in the form of a smaller defense burden. However, neutrality does not fully insulate a country from variations in the level of external threat in the global system as perceived by members of military alliances. Swiss defense spending has tracked very closely the spending trends - but at a lower average level - of the United States and other NATO countries. To the extent that post-Cold War threats, such as international terrorism, materialize primarily in the context of existing security alliances, Swiss military spending patterns observed in 1975-2001 are likely to remain the same in the future.

Suggested Citation

  • Thomas Bernauer & Vally Koubi & Fabio Ernst, 2009. "Does Neutrality Make A Difference? Explaining Patterns Of Swiss Defense Spending In 1975-2001," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(5), pages 413-422, October.
    • Handle: RePEc:taf:defpea:v:20:y:2009:i:5:p:413-422
    DOI: 10.1080/10242690802051537
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    References listed on IDEAS

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    1. Paul Dunne & Sam Perlo-Freeman, 2003. "The Demand for Military Spending in Developing Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 23-48.
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