Military Expenditure Trends for 1960–2014 and What They Reveal
| Published date | 01 May 2016 |
| Author | Justin George,Todd Sandler |
| DOI | http://doi.org/10.1111/1758-5899.12328 |
| Date | 01 May 2016 |
Military Expenditure Trends for 1960–2014 and
What They Reveal
Todd Sandler and Justin George
University of Texas at Dallas
Abstract
The article uses newly available consistent military expenditure data for 1960–2014 to examine past and current global spend-
ing trends during and after the Cold War. We are particularly interested in the impact of the end of the Cold War, 9/11 and
the 2008 recession on military spending worldwide. The global share of military spending of East Asia & Pacific and the Mid-
dle East & North Africa increased relative to other regions since 1985. This increase underscores the need for western allies to
bolster their power projection capacities. After 1999, both China and Russia raised their real defense spending, with China’s
increases far exceeding that of Russia. Both countries have a long ways to go to rival US capabilities. The North Atlantic Treaty
Organization (NATO) continues to be heavily dependent on US defense spending. The post-1998 expansion allies assume
about 2.4 per cent of the alliance’s defense burden, while representing significant risks to NATO, given recent Russian actions
in the Ukraine.
Policy Implications
•The recent relative growth of military expenditure in the Middle East & North Africa and East Asia & Pacific underscores
the need for western allies to bolster their air and sea-based power projection. These regional changes also augment the
required size of rapid deployment forces. Except for the US, France and the UK, western allies have not responded to
these needs.
•NATO must foster greater links with East Asia & Pacific countries, given altering defense and economic activities in the
region.
•Despite US Secretary of Defense Robert Gates’call on NATO to redress its increasing reliance on the US, his concerns are
even truer today than when delivered in 2011. Recent recovery in Europe from the 2008 recession provides an opportu-
nity to address this imbalance.
•NATO’s post-1998 expansion presents many risks to the alliance, especially because the expansion allies only account for
2.4 per cent of NATO’s aggregate military expenditure in 2014. Russian aggression in Ukraine and elsewhere underscores
these risks.
•Given recent defense buildups in China and Russia, the US and its NATO partners must consider reversing their recent mil-
itary expenditure cutbacks. Fortunately, China and Russia have a long ways to go to challenge US military might.
The Stockholm International Peace Research Institute (SIPRI)
recently extended its military expenditure database to pro-
vide consistently constructed spending estimates across
countries for 1960–2014 (SIPRI, 2015) and made these esti-
mates available to a select group of scholars. Up until now,
SIPRI’s consistent military expenditure figures were only
available back to 1988, thus excluding most of the Cold War
years. Comparing military expenditure may offer insights on
how momentous world events (e.g., the end of the Cold
War in 1991, North Atlantic Treaty Organization (NATO)
expansion in 1999, the unprecedented terrorist attack on 11
September 2001 (henceforth, 9/11), or the great recession of
2008) affected the trends, regional distribution and burdens
of military expenditure worldwide.
The purpose of the current study is to employ these new
expenditure data to assess and characterize changing
defense patterns, trends and burdens, beginning with the
global rise of total military expenditure since 1960, and the
post-Cold War fall in the median share of GDP devoted to
defense. For 1960–2014, the paper displays contrasting
regional military expenditure patterns in terms of global
shares for seven distinct regions. Of particular interest is the
marked change in regional shares –i.e., the rising shares of
East Asia & Pacific and the Middle East & North Africa and
the recent falling shares of North America and Europe &
Central Asia. These changing patterns have policy implica-
tions, later identified, for defense spending and force struc-
ture among western allies. In addition, the new data allow
for an assessment of NATO burden sharing dating back to
1960, based on two alternative burden-sharing measures
(i.e., allies’shares of total NATO spending and allies’share of
GDP devoted to defense spending). This analysis identifies
changes in burden sharing, consistent with the economic
theory of alliances (Olson and Zeckhauser, 1966),
1
after
NATO expanded from 16 to 28 members starting in 1999,
with the inclusion of Eastern European countries, many of
©2016 The Authors. Global Policy published by Durham University and John Wiley & Sons Ltd. Global Policy (2016) 7:2 doi: 10.1111/1758-5899.12328
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use,
distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.
Global Policy Volume 7 . Issue 2 . May 2016
174
Research Article
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