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

See all articles by Thomas R. Cusack

Thomas R. Cusack

Wissenschaftszentrum Berlin für Sozialforschung (WZB)

Date Written: April 2006

Abstract

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

Cusack, Thomas R., Sinking Budgets and Ballooning Prices: Recent Developments Connected to Military Spending (April 2006). WZB-Markets and Politics Working Paper No. SP II 2006-04. Available at SSRN: https://ssrn.com/abstract=899067 or http://dx.doi.org/10.2139/ssrn.899067

Thomas R. Cusack (Contact Author)

Wissenschaftszentrum Berlin für Sozialforschung (WZB) ( email )

Institution, States, and Markets Working Group
Reichpietschufer 50
D-10785 Berlin
Germany

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