 Technology of military conflict, military spending, and warJournal of Public Economics, 2012, vol. 96, issue 1, 226-236 Abstract: This paper studies how the technology of military conflict affects the allocation of resources in military spending (“guns”) and productive investment (“butter”). We first identify the fundamental property of conflict technology which the two commonly used contest success functions, the difference and ratio forms, share. Using this property, named the constant elasticity of augmentation, we construct a new class of contest success functions, hence generalizing the two forms. We provide axiomatic and probabilistic characterizations of the new contest success function. Then, adopting the new contest success function, we study how the elasticity of augmentation affects the trade-off between guns and butter, and countries' international policy to settle or wage a war. Finally, we estimate the elasticity of augmentation using actual battle data including seventeenth-century European battles and World War II battles and explore the implications of the estimated parameters of military technology on military spending and the preference of settlement. Keywords: Military conflict; Technology of conflict; Military spending; Wars; Contest success functions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:96:y:2012:i:1:p:226-236 DOI: 10.1016/j.jpubeco.2011.09.003 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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