ABSTRACT
Military Keynesianism highlights the role of military, or defense, spending for promoting economic growth, peace, and prosperity. Modern nations rarely engage in costly wars and bloody conflicts, yet they devote a sizable proportion of their economic resources to defense spending, which is commonly known as a nation’s defense burden. Defense burden had acted as a deterrent against open wars. Despite the fact that defense burden is neither necessary nor sufficient to prevent wars, as the new research shows, the average defense burden in our world has been stable roughly at 3 percent of the global GDP. Thus, defense spending can have a large opportunity cost. Out of the top ten nations in terms of defense burden, six are from the Middle East. Emulation within a regional group – popularly known as security webs – plays an important role in propelling a nation’s defense spending. Despite being a major issue in the regional context, currently no existing theoretical model has explained the precise determinants of defense burden. Ours is a first attempt to offer an economic model for explaining the determination of defense burden. In this chapter, we develop a simple theory and take direct evidence from the Middle East to highlight a common thread that runs through these nations in order to better make sense of the precise determinants of defense burden.
