The Political Economy of National Defense: Issues and Perspectives.

It might be enough to call this a nice collection of papers on the politics and economics of national defense, interesting to those economists and political scientists that study national defense issues, but that would ignore the editor's purpose: to integrate the disciplines of political science and economics in the study of national defense. In the first chapter, the editor, Andrew L. Ross, points out that political science and economics are not separable in any thorough study of national defense issues and attempts to define the realm of political economy as the overarching paradigm in defense research. As such, the interplay of politics and economics is common to each of the papers gathered for this volume. His point is well taken and The Political Economy of National Defense should open one's eyes to the more holistic approach to the study of defense. Following the introductory chapter, there are eight analytical chapters and a chapter that reviews the literature and makes suggestions for future defense research.

Chapters 2 and 3 deal with aggregate defense issues. In Chapter 2, William K. Domke searches for the limiting factors in defense spending. Interestingly, they do not appear to be fiscal. In a cross-sectional analysis, neither the rate of inflation or economic growth, nor the size of the budget deficit or trade balance appear to limit defense spending. The author's opinion, unsupported by empirical evidence, is that the limiting factors are political, involving the time frame and process for defense planning. In Chapter 3, Daniel N. Nelson considers the economic costs of heavy military spending in the Warsaw Pact countries. It is not surprising that high levels of spending for national defense divert resources from domestic consumption. A surprising conclusion is that the need to suppress civil unrest (itself a product of the burden of national defense spending), rather than the need to defend against Western aggression, was the dominant cause of the Soviet defense build-up.

Chapters 4, 5 and 6 deal with specific issues in defense. Glenn R. Fong presents a case study of the collaborative effort of the Department of Defense and private industry in the development of the Very High Speed Integrated Circuit program. Judith Reppy studies the relationship between military research and development expenditures and international trade performance. Not surprisingly the U.S. maintains the lead in world trade in products that incorporate defense technologies while its share of trade in products that use non-defense related technologies has been eroded by Japan. This may be spurious correlation, however, as the evidence from other countries is ambiguous. Andrew L. Ross investigates the international arms market. While it is structurally oligopolistic, its highly political and hence does not conform to the expectations of an oligopolistic market.

Chapters 7 and 8 are country case studies. Alex Mintz and Michael D. Ward find that electoral cycles influence military spending in Israel. It is the compensation of military suppliers rather than the procurement of weapons that is cyclical. David R. Davis and Steve Chan find that, contrary to conventional wisdom and the findings of Nelson in Chapter 3, heavy military spending did not adversely effect social welfare in Taiwan.

In Chapter 9, Nicole Ball examines the role of the defense industry in third world countries. She explores the requirements for, and the consequences of, substituting domestic production of arms for the importation of arms? In Chapter 10, Steve Chan concludes with a review of the existing literature and suggestions for future research. His principal conclusion is that each country is unique and that cross-sectional analysis is therefore inappropriate for a study of national defense, notwithstanding the cross-sectional studies in Chapters 2 and 5.