Abstract
The existence of a trade-off between military expenditures and social spending is widely hypothesized but often difficult to establish empirically. This article constructs a model to test the effects of changes in military spending on federal expenditures for health and education from 1941 through 1979. Important economic, demographic, and political changes are controlled. No systematic tradeoff between military spending and federal health and education expenditures is found, nor in this period was there any significant depressing effect on health and education expenditures by Republican presidential administrations. Thus, the current (Reagan) administration, under which there are major increases in military spending and major cuts in health and education spending, emerges as exceptional.
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Notes
- 1.
This text was first published by Bruce Russett as: “Defense Expenditures and National Well-Being,” American Political Science Review 76:4 (December 1982), 767–777. The permission to republish this article was granted by Linda Nicol, Permissions Manager, Cambridge University Press, Cambridge, UK on 13 November 2014.
- 2.
I am grateful to Yale University for computing support, to David Mayhew, Steven Rosenstone, and Edward Tufte for comments, and especially to Roy Behr for valuable research assistance and intellectual exchange. The research was supported by a contract from the United Nations Centre for Disarmament. Of course, only I am responsible for the results.
- 3.
In his time-series analysis Pryor (1968: 122–125) found a substitution effect between military spending and investment for only a few western industrial countries, but the time span was short (1950–62), the military levels low in the majority of countries, and the variation in military spending often not great enough to force significant trade-offs.
- 4.
The classifications are the standard ones reported in the Statistical Abstract of the U.S. Military does not include veterans’ benefits. Education includes education, employment training, social services and research, and general education aid. Health includes health care services, research, education and training of health care workforce, and consumer and occupational health and safety.
- 5.
Earlier analyses have indicated that the coefficients usually are not significantly different in wartime from usually are not significantly different in wartime from those in peacetime (Russet 1971: 44–46; Lee 1972: 68), except when the subsamples used are so small as to be virtually meaningless (Hollenhorst and Ault 1971).
- 6.
Because productivity and capacity data were available only for the post-World War II years, and when used they proved not significant and did not affect the coefficients of interest, in fact I do not usually report equations using them.
- 7.
Alternative demand measures, such as the proportion of the population under 18, were sometimes substituted but with no notable effect on the other variables. The total population in the age group appears to capture our theoretical concept most precisely. Obviously there is substantial collinearity between school enrollment and population under 18, as there was between our measures of capacity/productivity. If we were seeking an elegant model specification of the causes of educational spending, this would be cause for concern. But since the purpose here is rather to be sure that important control variables (correlated in the equation with both military spending and the error term) are not omitted, and thus that the coefficient military spending is consistent and unbiased, it is better to include them.
- 8.
Autocorrelation does not appear to be a serious problem with the majority of these equations, as indicated by the Durbin-Watson statistics for them. Where it is a problem, its effects are to exaggerate the apparent significance of the coefficients. Since we did not find many high coefficients for the variables that interested us, that is hardly a problem, and thus there is no cause to move to more sophisticated statistical analysis than OLS. Similarly, the relatively low power of the equations and the interesting variables suggests it would not yet be profitable to move to a complex system of simultaneous equations, despite the undoubted interdependence of these variables.
- 9.
The language of these sentences, appropriate to the 1980s, implies a concern only with trade-offs that may occur when military spending rises, not with the possible beneficiaries when spending decreases. In fact, as noted in Table 7.1, trade-offs actually occurred in. only 14 or 15 of the 39 years under study and usually occurred when military spending went down. We should not assume one is merely the opposite of the other. Experience with reductions in military spending is relatively limited, occurring in just 16 of the 39 years in our sample. Table 7.1 suggests there is some trade-off in these years, and in principle we might analyze years with military upswings in separate equations from those with downswings. However, the samples—especially for years with military downswings—would be very small for adequate multivariate analysis, and the technical problems of analyzing yearly data for years that were often not adjacent would be formidable.
- 10.
For a good analytical discussion on this theme see Ravenal (1978), Chap. 7.
- 11.
These changes are adjusted to be in constant dollars to indicate the real trade-offs accurately.
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Russett, B.M. (2015). Defense Expenditures and National Well-Being. In: Starr, H. (eds) Bruce M. Russett: Pioneer in the Scientific and Normative Study of War, Peace, and Policy. SpringerBriefs on Pioneers in Science and Practice, vol 34. Springer, Cham. https://doi.org/10.1007/978-3-319-13850-3_7
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