ABSTRACT
Before developments in public choice models, defence was one of the major components of government expenditure which was frequently ignored by economists and simply assumed to be autonomous (Hitch and McKean, 1960; see Chapter 6). This chapter outlines a taxonomy and a model which explains a nation's defence spending. The UK is taken as a case study and the challenge is to explain the facts of post-1945 UK defence expenditure. Initially, the ‘model’ is derived from Government statements (e.g. as reflected in Statements on the Defence Estimates and major defence reviews). Broadly, these suggest that UK defence expenditure has been determined by political, strategic and economic factors. These factors will be related to the conventional economic approach and to models of the arms race and alliances and to the possible economic burdens of defence spending. This approach is developed further in Chapter 6 with the application of public choice models.
