Sinking Budgets and Ballooning Prices: Recent Developments Connected to Military Spending
WZB-Markets and Politics Working Paper No. SP II 2006-04
49 Pages Posted: 14 May 2006
Date Written: April 2006
Military spending in the West generally declined after the Cold War. Given the economic pressures that many of these states confronted, they can be said to have experienced a fortuitous conjunction of lessening security demands with stable if not rising pressures to allocate more resources to social purposes. However, with declining financial resources a good part of military capital in these countries was reduced and most of what remains is growing obsolete. The excessive rise in relative prices associated with major military capital items, a rise only partially associated with an increase in real effectiveness, poses a challenge for many of these states if they are to retain their capacity to provide in some meaningful way for their own military defense.
Keywords: Military Spending, Weapon Systems, Military Personnel, Inflation, Conscription, East-West-Conflict
JEL Classification: H11, H56, D43, N40
Suggested Citation: Suggested Citation