State-Provided Defense as Non-Comprehensive Planning

Abstract

State-provided defense is a form of non-comprehensive government planning subject to two inherent problems. The first is the “knowledge problem” of how to allocate scarce resources to their highest-valued uses. The second is the “power problem” due to the discretionary power granted to those in the managerial-administrative state to plan military-related policies and resource allocations. We discuss these dual problems in the context of the U.S. defense sector.

Keywords: knowledge problem, national defense, power problem

JEL Classification: H11, H41, H56, P11