Abstract
Budgetary restrictions resulting from the present international economic crisis have tightened the need to improve efficiency in defense spending, leading to the armed forces having to undertake their duties with fewer resources. Previous reports on the subject have looked into the determining factors and effects of military spending but very few studies have analyzed the determinants for the modernization of the methodology for assessing efficiency. Thus, using a multiple regression statistical model, we have analyzed the appraisal systems in place in 28 countries to identify factors that influence the development of economic assessment of military expenditure. Our findings have revealed three factors that may favor the improvement of appraisal systems with regard to military expenditure: the quality of governance, size of the armed forces, and unemployment levels.
Acknowledgments
The paper has benefited by the comments and suggestions of an anonymous referee of this journal. This research was carried out with financial support from Regional Government of Andalusia (Spain), Department of Innovation, Science and Enterprise (Research project number P09-SEJ-5395) and from the Spanish National R & D Plan through research projects numbers ECO2010-20522-ECON-FEDER and ECO2010-17463-ECON-FEDER (Ministry of Science and Innovation). The authors also wish to thank the collaboration of all persons and institutions that answered the survey.