The Unproductive Protective State: The U.S. Defense Sector as a Fiscal Commons

31 Pages Posted: 14 Mar 2018 Last revised: 25 Mar 2018

See all articles by Christopher J. Coyne

Christopher J. Coyne

George Mason University - Department of Economics

Thomas K. Duncan

Radford University - Department of Economics

Date Written: March 12, 2018

Abstract

Economists model state-provided defense as a value-added, public good. The actual government provision of defense, however, is a “black box” that is rarely analyzed. This chapter contributes to opening this black box by analyzing the U.S. defense budget. We provide an institutional explanation for why scarce public resources are often squandered on defense-related activities. Our framework blends insights from James Buchanan and Elinor Ostrom and models the U.S. defense budget as a “fiscal commons.” We consider the absence of mechanisms to ameliorate overgrazing and, in doing so, emphasize that waste, fraud, and abuse is a system feature of the current system. We also consider the implications for reform.

Keywords: common pool resource, defense, defense budget, defense sector, Elinor Ostrom, fiscal commons, James Buchanan, protective state, productive state, unproductive state

JEL Classification: H56, H60, P16

Suggested Citation

Coyne, Christopher J. and Duncan, Thomas, The Unproductive Protective State: The U.S. Defense Sector as a Fiscal Commons (March 12, 2018). GMU Working Paper in Economics No. 18-06. Available at SSRN: https://ssrn.com/abstract=3138643 or http://dx.doi.org/10.2139/ssrn.3138643

Christopher J. Coyne

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Thomas Duncan (Contact Author)

Radford University - Department of Economics ( email )

P.O. Box 6952
Radford, VA 24142
United States

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