Ideological Military Spending: More Pay or More Weapons?
Research
21.06.2024
ZEW Study on the Influence of Political Ideologies on Military Spending in the EU and NATO
The political ideology of a government directly impacts its military spending. While conservative governments spend more money on military equipment and weapons, left-wing governments devote more funds to military personnel. Furthermore, according to a study by economist Łukasz Olejnik at ZEW Mannheim, governments whose constituencies have personal ties to the military tend to increase their military spending. The study is based on data from 29 EU and NATO countries spanning from 1999 to 2022.
Although it is clear that the degree of military spending depends on defence and budgetary factors, there has been little research to date on political factors that may be influencing the level of military spending in developed and democratic countries. “It was only when we disaggregated military spending into personnel expenses, arms purchases and other expenditures that the ideological differences in military spending became apparent,” says author of the study Łukasz Olejnik, PhD, a Humboldt visiting fellow in ZEW’s “Corporate Taxation and Public Finance” Research Unit.
He explains: “The results are consistent with theories that suggest that left-wing governments usually pursue a more expansive fiscal policy, such as through higher salaries for soldiers, along with a restrained foreign policy which results in lower arms expenditure. Conservative governments, on the other hand, strive for a more restrictive financial policy, i.e. with lower salaries for soldiers, coupled with a more forceful foreign policy, which goes hand in hand with more spending on armaments.”
An unresolved dilemma
However, defence spending strategy is not so clear-cut, according to Olejnik: “Every government has to choose between increasing wages for soldiers and purchasing more arms. While both have the potential to increase the army’s defence capabilities, their impacts on the economy are different. Increasing soldiers’ wages boosts their participation in the economy, whereas purchasing more arms can increase the amount of imports or improve the state of the arms industry.”
Although a higher level of security resulting from more military spending is a purely public good that privileges the whole of society, there are some groups who also privately benefit from increased military spending, including both individual persons (e.g. soldiers and civilian military personnel) and entire companies (e.g. the defence industry and their suppliers). For this reason, military expenditure can be used by politicians to attract or retain voting blocs, explains Olejnik: “Our study provides evidence that governments with a strong pro-military political base tend to deliver on their promises after elections and indeed increase military spending. By doing so, they attempt to retain their core electorate.”
About the study
This study analyses how governments' political ideologies affect a country's military spending. It is based on newly collected data, including a new original dataset drawing from 510 municipalities and electoral constituencies from 29 EU and NATO countries, spanning from 1999 to 2022.
