ABSTRACT
As the Cold War and the attendant arms race fade into history, U.S. federal government expenditures on defense are expected to fall significantly, producing what is called a “peace dividend”. But it is already apparent that the defense build-up of the early 1980s was an easy political accomplishment compared to the “down-sizing” that is required in the early 1990s. How has this asymmetrical approach to spending on defense as a public good arisen? An anecdotal answer is provided by a news report in The Economist (June 13, 1992, p. 28):
[Senator John] Warner [of Virginia]…has been squeezed from a key seat on the powerful armed-services committee, which will limit his power to influence the military debate in the future. The squeezer is Strom Thurmond [of South Carolina]… who is first in Senate seniority, [and] has pulled rank to bump Mr Warner as the ranking minority member of the committee in order to save South Carolina from defence cuts. This leaves Mr Warner worse-placed than he was to argue against defence cuts in Virginia, which ranks first in the nation in defence spending per head.
