Home Military Spending and Inequality in Autocracies
Article
Licensed
Unlicensed Requires Authentication

Military Spending and Inequality in Autocracies

A Simple Model
  • Soeren C. Schwuchow ORCID logo EMAIL logo
Published/Copyright: October 10, 2018

Abstract

In this note, we outline a general framework for analyzing how inequality and military spending interact in a society governed by a rent-seeking autocrat. Relying on a general equilibrium model, we show that, generally, the autocrat utilizes the military for redistribution in favor of poorer citizens. However, the dictator’s own rent-seeking activity weakens the extent of redistribution and, in the extreme, can even reverse its direction, yielding more unequal secondary distributions instead. Accordingly, the initial level of inequality also affects the impact of military spending on inequality as the former has an impact on the extent of both, the regime’s rent-seeking activity as well as redistribution. Here, our model shows that primary and secondary distributions are rather equal for extreme initial equality/inequality. For medium levels of initial inequality, redistribution is rather large and can be in favor of the poor or of the rich, depending on the extent of rent-seeking and the primary distribution. Based on these results, we highlight the importance of a society’s institutional framework for analyzing the relation of inequality and military spending.

JEL Classification: H56; H23; D31

Acknowledgment

The author thanks Federica Carugati, Raul Caruso, Casper Sakstrup, and Petros Sekeris for very helpful comments. All remaining errors are mine.

References

Abell, J. D. (1994). Military spending and income inequality. Journal of Peace Research, 31(1), 35–43.10.1177/0022343394031001004Search in Google Scholar

Acemoğlu, D., Verdier, T., & Robinson, J. A. (2004). Kleptocracy and divide-and-rule: A model of personal rule. Journal of the European Economic Association, 2(2-3), 162–192.10.3386/w10136Search in Google Scholar

Acemoğlu, D., Ticchi, D., & Vindigni, A. (2010). A theory of military dictatorships. American Economic Journal: Macroeconomics, 2(1), 1–42.10.3386/w13915Search in Google Scholar

Anderson, E., Jalles D’Orey, M. A., Duvendack, M., & Esposito, L. (2017). Does government spending affects income inequality? A meta-regression analysis. Journal of Economic Surveys, 31(4), 961–987.10.1111/joes.12173Search in Google Scholar

Caruso, R. (2018). Unfamiliar consequences of military expenditures. In M. Baussola, C. B. Pellegrini & M. Vivarelli (Eds.), Essays in Honor of Luigi Campiglio, (pp. 91–103). Milan: Vita e Pensiero.Search in Google Scholar

Caruso, R., & Domizio, M. D. (2017). Military spending and budget deficits: The impact of US military spending on public debt in Europe (1988–2013). Defence and Peace Economics, 28(5), 534–549.10.1080/10242694.2016.1228259Search in Google Scholar

Caruso, R., & Biscione, A. (2018). Military expenditures and income inequality: Evidence from a panel of transition countries (1990–2015). Paper presented at the 18th Jan Tinbergen European Peace Science Conference, 18–20 June 2018, University of Verona (Italy) and CESPIC Working Paper 2018/01.Search in Google Scholar

Dimitraki, O., & Kartsaklas, A. (2017). Sovereign debt, deficits and defence spending: The case of Greece. Defence and Peace Economics, 1–16. (Ahead of print).10.1080/10242694.2017.1289497Search in Google Scholar

Dunne, J. P., & Tian, N. (2013). Military expenditure and economic growth: A survey. The Economics of Peace and Security Journal, 8(1), 5–11.10.15355/epsj.8.1.5Search in Google Scholar

Elveren, A. Y. (2012). Military spending and income inequality: Evidence on cointegration and causality for Turkey, 1963–2007. Defence and Peace Economics, 23(3), 289–301.10.1080/10242694.2011.578414Search in Google Scholar

Emmanouilidis, K., & Karpetis, C. (2018). The defense-growth nexus: A review of time series methods and empirical results. Defence and Peace Economics, 1–18. (Ahead of print).10.1080/10242694.2018.1428261Search in Google Scholar

Gilli, M., & Li, Y. (2015). Coups, revolutions and efficient policies in autocracies. European Journal of Political Economy, 39, 109–124.10.1016/j.ejpoleco.2015.04.011Search in Google Scholar

Lin, E. S., & Ali, H. E. (2009). Military spending and inequality: Panel Granger Causality Test. Journal of Peace Research, 46(5), 671–685.10.1177/0022343309339247Search in Google Scholar

Meng, B., Lucyshyn, W., & Li, X. (2015). Defense expenditure and income inequality: Evidence on co-integration and causality for China. Defence and Peace Economics, 26(3), 327–339.10.1080/10242694.2013.810026Search in Google Scholar

Schwuchow, S. C. (2018). Extractive institutions, choking taxes, and war: On the (beneficial) impact of inequality in autocracies. Paper presented at the 18th Jan Tinbergen European Peace Science Conference, 18–20 June 2018, University of Verona (Italy).Search in Google Scholar

Wintrobe, R. (1990). The tinpot and the totalitarian: An economic theory of dictatorship. American Political Science Review, 84(3), 849–872.10.2307/1962769Search in Google Scholar

Wintrobe, R. (1998). The Political Economy of Dictatorship. Cambridge: Cambridge University Press.10.1017/CBO9781139174916Search in Google Scholar

Published Online: 2018-10-10

©2018 Walter de Gruyter GmbH, Berlin/Boston

Downloaded on 8.9.2025 from https://www.degruyterbrill.com/document/doi/10.1515/peps-2018-0025/html
Scroll to top button