Fear, greed, or garage sale? The analysis of military expenditure in East Asia

This paper examines the determinants of military expenditures in eight East Asian countries from 1983 to 1993. In a pooled cross-sectional time-series analysis, it finds that the security threats (either external or internal) have not been a factor in determining the governments' defence burdens. Instead, economic and bureaucratic budgetary factors are better predictors of their defence decision-making. Military corruption and subsidized defence industries are the main domestic elements driving up the budgets; but this bureaucratic 'irrationality' is checked and balanced by economic rationality, for the defence burdens generally correlate with the availability of economic resources.

Keywords:

• Military expenditures
• East Asia
• security
• arms race
• corruption