Pro Bono Publico? : Demand for Military Spending Between the World Wars

Abstract

This article analyzes the demand for military spending in the 1920s and 1930s, based on variables arising from the international system and the selected countries. The main premise is that the military spending was an impure public good, implying that both public and private benefits drove the demand for this type of expenditure. Threats arising from the autocratic states in the 1930s increased these expenditures, and democracies overall tended to spend less. Moreover, the absence of clear international leadership by the USA or UK destabilized the international system and increased military spending, with alliances failing to produce a public good effect. Military spending resulted in joint products at the level of state and within state, and the level of economic development seemed to exert a downward pressure on the military spending of these states. There were some contradictory spillover effects felt by these states. On the whole, this article suggests that scholars should expand their explanatory models to include impure public good influences in military spending analysis.