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Who Pays for Defense in Democracies? A Rational Theory of Inequality and Militarism

Who Pays for Defense in Democracies? A Rational Theory of Inequality and Militarism. Jonathan D. Caverley PhD Student, Political Science University of Chicago caverley@uchicago.edu Empirical Implications of Theoretical Models July 2006. Summary.

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Who Pays for Defense in Democracies? A Rational Theory of Inequality and Militarism

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  1. Who Pays for Defense in Democracies?A Rational Theory of Inequality and Militarism Jonathan D. Caverley PhD Student, Political Science University of Chicago caverley@uchicago.edu Empirical Implications of Theoretical Models July 2006

  2. Summary • M: The distribution of costs within a democracy matter • NH: Democracies spend relatively little money on defense, and spend that money efficiently • P: • Defense is produced from capital and labor • Wealth is distributed unequally among voters • Conscription is possible • C: The median voter can shift defense costs away from herself by a capital-intensive military

  3. Conventional Wisdom(s) • “Democratic Exceptionalism” • Costs of war (Kant, Doyle…) • Efficiency of public goods provision (Selectorate) • Choose war wisely and reluctantly • Democracies spread the costs of public goods less evenly than the benefits (Meltzer-Richards) • Defense is the purest of public goods (Political Economy 101)

  4. Assumptions I • Median voter dictates policy • Simplification • Normative assumption • Rational, fully-informed and utility-maximizing voters • Voters have: • An equal say in policy • An equal chance of being conscripted • A skewed right distribution of income

  5. Assumptions II • Defense is a pure public good • Consists of capital and labor • Financed through a flat tax on income • The only public good • No deficit spending or capital mobility • Value of public good rises with threat

  6. Median Voter Utility • Consumption (1-)ym

  7. Median Voter Utility • Consumption (1-)ym • Public Good • Defense production function AKL1- • Threat (lowers the value of defense) E-

  8. Median Voter Utility • Consumption (1-)ym • Public Good • Defense production function AKL1- • Threat (lowers the value of defense) E- • Draft (a public bad) EL/N

  9. Inefficiency Term Median Voter Utility

  10. Testing the Utility Model

  11. More on the Statistical Model • Unit of Analysis • Country Year • All democracies (coded from Polity IV) 1949-1999 • Other Variables in Supplemental Models • Conscription • Population over 65 (%) • Population under 18 (%) • Allies’ Capability • Country and Year fixed effects

  12. Implications for International Politics • Lower costs of war results in democratic aggression • Factor endowments matter • Capital mobility may matter • 2 legs of the Kantian triad • Democracies may prefer certain conflicts • Factor-augmenting technology • Democratic advantage of the RMA?

  13. What to Hang on the Scaffolding • “Plug and play” with international conflict models • Where does threat come from? • Dynamic model: threats and discount rates • “Plug and play” with more sophisticated public choice models • When does the MV get her way? • Comparing alternate institutions

  14. =

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