Political Institutions and the Causes of Military Spending.

Abstract

Why do states invest the amount they do in their militaries? I identify three sets of causes. First, political institutions that create public accountability shape how states respond to the likelihood of conflict. Publically accountable leaders shift how much they spend as the likelihood of conflict shifts. This relationship between democratic institutions and threat response explains both why democracies spend less on average than non-democracies, and why some democracies, some of the time, invest heavily in their military. It also helps explain why democracies win wars more often than non-democracies, even when targeted: democracies invest in their military in order to build military capacity. Autocracies invest in their military for other reasons. Specifically, they use military spending as a side payment to high-ranking members of the military. In autocracies, military spending is the cost of military support. This leads to the counterintuitive finding that when the military runs the government, the state invests less in the military. Finally, I examine the foreign origins of military spending, and find that state military spending is affected by military spending in other states through several pathways. State military spending is positively interdependent with military spending in states with which it is likely to fight. It is negatively interdependent with states with which it is allied. However, it is positively associated with the aggregate likelihood of conflict of its allies, making alliances a source of both less and more military spending. In contrast to the conventional wisdom, I do not find evidence of military spending in response to rival spending when the likelihood of conflict and ally spending are accounted for. The three papers in this dissertation contribute to the literatures on military spending and arms races, alliances, enduring rivalries, and political institutions and foreign policy.