Short-term versus long-term military planning

Ronen Bar-El, Kobi Kagan and Asher Tishler ()
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Ronen Bar-El: The Open University of Israel
Kobi Kagan: Department of Economics, Bar-Ilan University, Israel
Asher Tishler: Faculty of Management, Tel Aviv University, Tel Aviv, Israel

Economics of Peace and Security Journal, 2009, vol. 4, issue 1, 84-90

Abstract: This article analyzes the allocation of the government budget to civilian and military expenditure by two rival countries that are involved in an arms race. We compare the consequences of myopic (period by period) planning versus rational (long-term) planning and show that although myopic planning is always favorable for both countries, they are likely to become locked in a prisoners’ dilemma equilibrium in which they plan rationally. The prisoners’ dilemma equilibrium results in higher stocks of weapon systems and lower welfare for both countries. We also find some evidence of the existence of a prisoners’ dilemma equilibrium in the current Israeli-Syrian arms race. Generally, this article suggests that solving military/political conflicts that evolve into an arms race by relying only on military might is an expensive and suboptimal solution. Each country should identify this phenomenon and attempt to take it into account in its decisionmaking by using appropriate policy alternatives. There are two major policy options in this case. The first option is to reach some kind of agreement with the rival (directly or through a third party). The second option is to institute force multipliers techniques.

Keywords: Arms race; intertemporal defense budget allocation; prisoners’ dilemma (search for similar items in EconPapers)
JEL-codes: D74 D78 D90 H56 H68 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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