AD-A219 379

Military Dimensions ofCommunist Systems

Benjamin Zycher, Tad Daley

June 1988

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Military Dimensions of Communist Systems interimJ

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-~Communist Countries - (....~CommunismMilitary Budgets-Military Forces (Foreign)

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This study examines the relative tendenciesof Conmunist and non-Communist nations todevelop or overdevelop their militarydimensions, compared with other nations andwith the development of their own civilsectors. The four military dimensions arespending burden, manpower proportion,sophistication or overall levels ofmilitary and civil technology, andcivil-military relations. The analysis isbased on a sample of 26 Communist nationsand 63 non-Communist nations, and coversthe period 1966-1983. The authors concludethat Communist systems display greaterdevelopment of military dimensions than donon-Communist systems, and greaterdevelopment of military dimensions thantheir own nonmilitary ones..

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Military Dimensions ofCommunist Systems

Benjamin Zycher, Tad DaleyA, (V :' or

C ' -TD Ir C Tr ,

June 1988 UJu.: L i n

Prepared for the ByOffice of the Under Secretary of Defense Distr ibut on/for Policy Ava 1 :bi -,tv Code .

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PREFACE

This study originated in a pr',iposal by Charles Wolf, Jr., which set forth hypothesesabout the possible systematic re',.tionship between Communism and a relative emphasis upon anation's military dimensions. The proposal suggested the four dimensions explored in thisstudy: Military spending as a proportion of GNP, military manpower as a proportion of totalpopulation, relative levels of military and civil technology, and relative civil/military relationsin Communist and non-Communist states. This report has provided the basis for a shorteranalysis of Communism and national military dimensions, now in progress, written jointly byCharles Wolf. Jr. and Benjamin Zycher. The analysis has been prepared for the Under Secre-tary of Defense for Policy as part of RAND's research program in International Economic Pol-icy, in the National Defense Research Institute, an OSD-sponsored federally funded researchand development center. It should be of interest to individuals and policymakers working inthe areas of military spending and economics, comparative economic and political systems, andgovernmental behavior.

III

SUMMARY

This study examines the relative tendencies of Communist and non-Communist nationsto develop or overdevelop their military dimensions, compared with other nations and with thedevelopment of ti,-ir own civil sectors. We do not imply "aggressiveness" or other behaviorthat might be associated with this tendency as we define it; nor, obviously, does it precludesuch behavior.

No single military dimension provides a complete measure of this tendency toward rela-tively greater "militarization." Therefore, four military dimensions are explored in this study,as a means of acquiring a fuller understanding of Communist and non-Communist behavior,and as a means of providing checks on the findings for any given dimension. The four military

dimensions of interest are as follows.

* Spending burden-military spending as a proportion of GNP.* Manpower proportion-military manpower as a proportion of total population.* Sophistication or overall levels of military and civil technology.* Civil/military relations.

We begin with some simple hypotheses on the systematic relationship between Commu-nism and overdevelopment of military dimensions. First, we hypothesize that Communistsystems, ceteris paribus, tend to display higher demands for military services than do non-Communist systems. These higher demands derive from expressed or implicit systemic objec-tives and pressures.

" Democratic decision processes may tend to favor special interest programs at theexpense of spending on public goods (e.g., defense) that produce diffused benefits forthe citizenry at large. This dynamic may be offset partially, but not totally, by thelobbying activities of the "military-industrial complex" on behalf of military programsin democratic societies. Moreover, to the extent that a greater degree of economic spe-cialization characterizes non-Communist systems compared with Communist ones,other things equal, greater demands for spending benefiting private interests willresult, thus reducing the resources available for defense.

" Provision of a credible national defense can substitute for provision of a high livingstandard as a source of domestic political support.

* Communism produces a political/ideological commitment or incentive to further the

growth of Marxist-Leninist systems, as a means of enhancing domestic political sup-port (or reducing potential opposition), through expansion of military power.

Second, we hypothesize that Communism has a comparative (cost) advantage in the sup-ply of resources for military activities.

" The inefficiency of resource use in the civil sectors reduces the opportunity cost ofresource use in the military sector.

* Centrally planned economic systems work fairly well in the mobilization of resourcesfor large efforts with known production processes or functions.

In addition, we hypothesize that the higher demands of Communist interest groups formilitary services might affect such components of civil/military relations as:

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" The influence ot t he milit ary in political affairs, including the choice of politicalleadership.

* Relative military/civilian pay, in-kind compensation, and perquisites.* The extent off military involvenent in the economy." The degree of political indtoctrination of the military.

For the empirical analysis, we have choen a sample of 26 ( ommun ist nations from vari-(us surveys available in the literature. Some of these nations have been (ommunist (luringonly a part oi the sample period, 1966- 1983. For purposes of comparison, we have assembled asample of' 61 non -CmLllnnist nations, chosen on the basis of alliance comparability (e.g.,NATO vs. the Warsaw Pact), obvious historical circumstances (e.g.. South Korea vs. NorthKorea), similar geographic location, and data availability. Although our behavioral hypothesisis that Ctm munist natiOns will tend to develop their military dimensions more fully than non-Communist ones, our null hypothe,,is for purposes of statistical analysis is that there is nodifference between the tWo groups.

For all Communist nations over the entire sample period, spending burden averages 6.97percent. while the protportion for the non-Communist nations is 4.26 percent. The differenceof about 2.7 percent is statistically significant at a confidence level of over 99.9 percent. Forthe Communist nations, average manpower proportion is 1.29 percent, while for the non-Communist nat ions it is (.77 percent. Again, this difference of about 0.5 percent of total popu-lation is statisticallv significant at a confidence level greater than 99.9 percent.

These aggregate comparisons do not control for other important influences on thedevelopment of military dimensions, such as foreign threats. multilateral alliances, and thelike. A (,rude way to control for such f'ictors is through comparison of individual nations thatare similar in terms of region. population, history, and, perhaps, culture. For seven compara-tive pairings of spending burden, the Communist averages exceed those of the non-Communiststates in each case. For the seven comparisons of' manpower proportion, the Communist aver-ages are greater in six cases, the exception being South Vietnam relative to Vietnam.

Of the 89 nations in our sample, 10 changed from non-Communist to Communist (or viceversa) during our sample period. Spending burden was higher in six of the nations under Com-munism, and two under non-('olmunism: the remaining two cases did not differ by a statisti-cally significant amount. However, manpower proportion was higher in two nations underCommunism and in four under non-Conmunisn, while no statistically significant differencewas found for the remaining two cases. These seemingly anomalous higher levels under non-Communism appear to be idiosyncratic, due to such factors as the collapse of the Afghan armyafter the Soviet invasion, the end of the civil war in Cambodia, and the growing hostilitiesbetween Somalia and Ethiopia.

The national pairings can control for the effects of exogenous influences only crudely.Therefore, an econometric approach is required, so that we can isolate the effects of Communismper se. In the regressions, estimated with the ordinary least squares estimator, the right-handvariables are the following:

, A dummy variable taking the value I ftr years in which the given nation is Commu-nist, and 0 otherwise.

" A dummy variable taking the value I for years in which significant guerrilla or terror-ist activity is present in the nation as reported in a recent survey of major armed con-flict, and 0 otherwise.

Vii

* A variable measuring external threats.* A variable measuring the nation's population as a proportion of the total population of

whatever alliance of which the nation is a member.* A variable measuring the inherent "type" of regime, for which we use as a proxy the

Freedom House ranking of political democracy and personal liberty.• A dummy variable taking the value 1 for years in which the nation was engaged in sig-

nificant external hostilities or war as reported in a survey of major armed conflict.* A dummy variable taking the value 1 for years in which the nation used conscription

for the acquisition of manpower.* Regional dummy variables are included for Europe, Africa, Asia, Latin America, North

America, and the Middle East.* Per capita income is included in some estimated equations for sensitivity analysis.* Also for sensitivity analysis, manpower proportion is included as a regressor in some

spending burden equations, and spending burden is included in some manpower pro-portion equations, although specifications excluding these variables are pieferred on apriori grounds.

Our central empirical findings can be summarized as follows. Communist systems displayspending burdens that are higher than those of non-Communist systems by about 3 percent ofGNP. For manpower proportion, the difference is about 0.5 percent of total population. TheMiddle East dummy variable is important because the Middle East nations in the sample areboth non-Communist and heavily militarized. Interestingly, the data suggest that non-Communist dictatorships may develop their military dimensions less fully than do democracies,and that it is Communist systems that display the relative emphasis upon resource allocationtoward military uses among all undemocratic regimes. Finally, per capita income appears to bestatistically insignificant as a variable explaining either spending burden or manpower propor-tion.

The third military dimension is the relative sophistication or "level" of military and civilcapital or technology overall in Communist and non-Communist nations. "Level of technol-ogy" is a convenient shorthand phrase for this concept; but we are not measuring the "pure" oraverage technological level of military and civil capital. Instead, we are interested in the tech-nological level of the capital stocks overall; thus, both quality and quantity are relevant.Obviously, there is no accepted metric for the overall sophistication or level of technology,whether military or civil. For the level of military technology, we have constructed indices ofmain battle tanks and jet aircraft, where each index is the equivalent number of "modern"tanks or jets in the given nation's force structure in the given year. The index is constructedby counting the numbers of tanks and jets of the various vintages (ages), and then discountingat annual rates of 4 percent and 5 percent for tanks and jets, respectively. Thus, the indicesactually are quantity measures, weighted by technology level. The underlying assumption isthat these indices for equivalent numbers of modern tanks and jets are likely to be highlycorrelated with the more fundamental concept of "level" of military technology.

The indices were constructed for 1975, 1980, and 1985. For both jets and tanks in allthree years, the average Communist indices exceed those of the non-Communist nations byamounts that are statistically significant or marginally significant.

More fundamentally, we are interested in the ratio of military to civil technology levels inCommunist and non-Communist nations, as a means of examining the extent to which Com-munist nations emphasize the military dimension. With respect to civil technology, the

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measurement problems are equally serious, so that we must resort again to surrogates. Ouralternative surrogate measures of the level of civil technology are GNP, the number of automo-biles (and commercial vehicles) in use, and the number of telephones in use. For the threeratios of jets to our surrogates for civil technology, the Communist ratios exceed the non-Communist ones in all three years; of the nine comparisons, the differences are statisticallysignificant in six. For tanks over civil technology, the ratios for the Communist nations againare greater in all nine cases, with the differences being statistically significant in five. Fornation pairings contrasting the ratio of jets over GNP, the Communist ratios are higher in fiveof six cases in all three years. Data are unavailable for South Vietnam. For tanks over GNP,the same results obtain. Finally, eight econometric equations explaining technology levels wereestimated. Of the eight, the Communism coefficient is significant or marginally significant inall except the equations for which number of telephones is the surrogate measure of civil tech-nology.

Our fourth military dimension is comparative civil/military relations. This is the mostqualitative of the four, lending itself only to rough evaluations and judgments about centraltendencies. Nation pairings again offer a crude method with which to control for externalinfluences on civil/military relations. The qualitative evidence for four such pairings contrast-ing the four components of civil/military relations at a minimum is not inconsistent with ourhypotheses or with the evidence for the first three military dimensions.

The empirical findings on the four military dimensions are consistent with the hypothesestaken as a group. Communist systems display greater development of military dimensionsthan do non-Communist systems, and greater development of military dimensions than theirown nonmilitary ones. These findings raise further important issues appropriate for new

research:

" Does the relative overdevelopment of military dimensions in Communist systemsimply a uniquely powerful position for the military?

• How can negotiations with Communist states reflect the apparent importance to themof military considerations?

* Do the findings suggest ways of structuring the ongoing competition with Communistsystems?

* How can we measure the true total economic cost of the military effort of Communistsystems?

* Should we change the ways in which we analyze Communist systems?

ACKNOWLEDGMENTS

Many individuals provided useful thoughts and comments during the preparation of thisstudy. Thanks must go first to Dr. Charles Wolf, Jr., who formulated the original proposal forthe study, and whose detailed comments have contributed to a greatly improved product. Drs.Abraham Becker and Keith Crane of The RAND Corporation provided detailed and usefulreviews of the manuscript. Additional comments were offered by RAND colleagues ArthurAlexander, Susan Anderson, Richard Bu , Scott Cardell, Charles Cooper, David Draper,Edward Gonzalez, Eugene Gritton, Gus i.ggstrom, Gregory Hildebrandt, A. Ross Johnson,Daniel Kohler, Benjamin Lambeth, Dale M. Landi (now of the State University of New Yorkat Buffalo), Patrick Murphy, Kent Osband, Robert Perry, Steven Popper, Daniel Relies, JohnRolph, David Ronfeldt, and K. C. Yeh. Useful suggestions on the measurement of technologylevels were provided by Bruno Augenstein, Cullen Crain, Maurice Eisenstein, Nancy Nimitz,and Russell Shaver. Very helpful research assistance on civil/military relations was providedby Sharyl Cross and Anna Slomovic. Professor Robert L. West of the Fletcher School of Lawand Diplomacy, and Mr. Thad P. Alton of L. W. International Financial Research, New York,generously provided data on GNP and military spending for a number of countries. Finally,efficient and timely preparation of the manuscript was provided by Dolores D. Davis.

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CONTENTS

P R E FA C E ..... ........ ....... ..... ... . .. .. ... ... ......... ii

S U M M A R Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A ('K NO W LE1 I(;M EN TS ...... ....................................... ix

T A B L E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x iii

,sectiOn

I. IN T R O D I ('T IO N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. SOME HYPOTHESES ON COMMI.UNISM AND A RELATIVE EMPHASISUPON MIL lARY DIMENSIONS ............................ 3

The Social D-mand for M ilitary Services . .......................... 4The Political Demand for Military Services ... ......................... 5Fhe Cost of Re.source Allocation to Military Uses ......................Some Further Implications .......................................... 9

I1. WHICH NATIONS ARE COMMUNIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

IV. RESOURCE ALLOCATION TO THE MILITARY IN COMMUNIST ANDNON-COMMUNIST STATES ................................... 15

int-oduction ..................................................... 15Comparisons of Summary Statistics for Communist and Non-Communist

S ta tes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

V. ECONOMETRIC ANALYSIS OF SPENDING BURDENS ................. 20Ordinary Least Squares Analysis of a Simplified Model ...... .......... 22Analysis of Spending Burden with the OLS Estimator and Pooled

Cross-Sectional and Time-Series Data . ........................ 22Analysis of Spending Burden with the OLS Estimator and Cross-Sectional

D ata, 1973 T hrough 1983 .................................. 28Estimation of the Model Excluding th, Least Reliable Date............... 31Exclusion of the Middle F tt from the Sample ....................... 31T he T hreat V ariable .. ....................................... 41Do Non-Communist Dictatorships Underdevelop Their Military Dimensions? . . 47Does Per Canita Income Affect Spending Burden? . . . . . . . . . . . . . . . . . . . . . 54

VI. ECONOMETRIC ANALYSIS OF MANPOWER PROPORTIONS ............ 58

VII. OVERALL SOPHISTICATION OR LEVEL OF MILITARY AND CIVILCAPITAL OR TECHNOLOGY . .............................. 76

VIII. COMPARATIVE CIVIL/MILITARY RELATIONS ..................... 89

IX. CONCLUSIONS AND FURTHER ISSUES ........................... 92

AppendixA. DATA SOURCES FOR SPENDING BURDEN ........................ 93B. BORDER PROPORTIONS USED IN DERIVATION OF THE THREAT

V A R IA B L E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

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TABLES

1. Nations delineated as Communist ................................... 132. Nations delineated as non-Communist ................................ 143. Means for spending burden and manpower proportion, country pairings .......... 174. Means for spending burden and manpower proportion, national Communist/

non-Com m unist shifts ........................................... 195. OLS analysis of spending burden, cross-sections, simplified model .............. 236. OLS analysis of spending burden, pooled 1966-1983 data ..................... 247. OLS analysis of spending burden, pooled 1973-1983 data ..................... 268. OLS analysis of spending burden, pooled data ............................. 279. OLS analysis of spending burden, cross-sections, full model ................... 29

10. OLS analysis of spending burden, cross-sections, manpower proportion deleted .... 3011. OLS analysis of spending burden, cross-sections, threat deleted ................. 3212. OLS analysis of spending burden, cross-sections, guerrillas deleted .............. 3313. OLS analysis of spending burden, cross-sections, alliance proportion deleted ...... 3414. OLS analysis of spending burden, cross-sections, freedom proxy deleted .......... 3515. OLS analysis of spending burden, cross-sections, war deleted .................. 3616. OLS analysis of spending burden, cross-sections, conscription deleted .......... 3717. OLS analysis of spending burden, cross-sections, regional dummies deleted ....... .3818. Communism coefficients: spending burden ............................ 3919. OLS analysis of spending burden, cross-sections, least reliable data excluded ..... 4020. OLS analysis of spending burden, pooled data, Middle East observations

excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4221. OLS analysis of spending burden, cross-sections, Middle East observations

excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4322. OLS analysis of spending burden, cross-sections, manpower proportion deleted,

M iddle East observations excluded .................................. 4423. OLS analysis of spending burden, pooled data, war deleted .................... 4524. OLS analysis of spending burden, cross-sections, manpower proportion and war

deleted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4625. OLS analysis of spending burden, pooled data, summed threats ................. 4826. OLS analysis of spending burden, cross-sections, summed threats ............... 4927. OLS analysis of spending burden, cross-sections, summed threats, manpower

proportion deleted ............................................. 5028. OLS analysis of spending burden, pooled data, Communism deleted .............. 5129. OLS analysis of spending burden, cross-sections, Communism deleted ........... 5230. OLS analysis of spending burden, cross-sections, manpower proportion and

Communism deleted ............................................ 5331. OLS analysis of spending burden, pooled 1973-1983 data, per capita GNP

included . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5532. OLS analysis of spending burden, cross-sections, per capita GNP included ........ 5633. OLS analysis of spending burden, cross-sections, manpower proportion deleted,

per capita GNP included ......................................... 5734. OLS analysis of manpower proportions, cross-sections, simplified model ........... 5935. OLS analysis of manpower proportion, pooled data, spending burden included .... 6036. OLS analysis of manpower proportions, cross-sections, full model ............... 6237. OLS analysis of manpower proportions, cross-sections, threat deleted ............ 6338. OLS analysis of manpower proportions, cross-sections, guerrillas deleted ......... 64

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39. OLS analysis of manpower proportions, cross-sections, alliance proportion deleted . 6540. OLS analysis of manpower proportions, cross-sections, freedom proxy deleted ..... 6641. OLS analysis of manpower proportions, cross-sections, war deleted ............ 6742. OLS analysis of manpower proportions, cross-sections, conscription deleted ...... 6843. OLS analysis of manpower proportions, cross-sections, regional dummies

deleted ........................................................... 6944. Communism coefficients: manpower proportion ......................... 7045. OLS analysis of manpower proportions, cross-sections, least reliable data excluded 7146. OLS analysis of manpower proportions, pooled data, summed threats ............ 7247. OLS analysis of manpower proportions, cross-sections, summed threats .......... 7448. OLS analysis of manpower proportions, cross-sections, per capita GNP included . .. 7549. Crude indices of civil technology: United States and USSR ................... 7950. Jet indices for Communist nations .................................. 8051. Tank indices for Communist nations ................................. 8152. Jet indices for non-Communist nations ............................... 8253. Tank indices for non-Communist nations ............................. 8354. Jet index averages ............................................. 8455. T ank index averages ............................................ 8456. M ilitary/civil technology ratio: jets/GNP ............................. 8457. Military/civil technology ratio: jets/automobiles ............................ 8458. Military/civil technology ratio: jets/telephones .......................... 8559. Military/civil technology ratio: tanks/GNP ............................ 8560. Military/civil technology ratio: tanks/automobiles ....................... 8561. Military/civil technology ratio: tanks/telephones ........................ 8562. Nation pairings for jets/GNP ...................................... 8763. Nation pairings for tanks/GNP .................................... 8764. OLS analysis of technology levels ................................... 8865. Comparative civil/military relations ................................. 89

I. INTRODUCTION

Does Communism, as a political and economic system, inherently produce incentives andp ressures that lead toward greater development (or "overdevelopment") of particular nations'military dimensions than would be the case otherwise? That is the basic issue addressed inthis study, in which the central mode of analysis is comparison of Communist and non-Communist nations, both cross-sectionally and over time.

This comparison is interesting in its own right, as the empirical evidence on the relativetendency of Communist systems to develop their military dimensions may carry implicationsfor non-Communist states engaged in political and military competition with Communist ones.More broadly, we would like to know why Communism displays this tendency, if indeed it does.The empirical evidence discussed below does not allow a detailed examination of hypotheses onthe pressures and incentives leading toward varying development of military dimensionsobserved under different political and economic systems. Nonetheless, some hypotheses aboutthe systematic relationship between Communism and this behavior are offered in Sec. II. Ifthese hypotheses are sensible, and if they are supported as a group by the empirical evidenceunder Communism and non-Communism, then it is reasonable to accept them as tentativeguides for policy formulation, unless further analysis of other data casts doubt on one or moreof them individually.

If, for example, Communism somehow bestows a cost advantage in the production of mili-tary services, then it may be wise for the West to search for ways to shift the long-term mili-tary competition in directions that emphasize the systematic comparative advantages of thenon-Communist nations over the Communist ones. Because the nature of the political systemis only one factor influencing the degree to which a given nation develops its military dimen-sions, we must attempt to separate the effects of Communism per se from such other importantfactors as internal and external threats, historical patterns, regional characteristics, and thelike.

"Development of military dimensions" is, or can be, a rather loose and even emotivephrase. On the other hand, it is a convenient substitute for more neutral but narrowerphrases, such as "resource allocation to the military," or "relative development of military andcivil sectors." As employed in this study, the development of military dimensions refers to thedegree to which some classes of nations allocate resources to military uses more extensivelythan do other nations, and compared also with the development of their own nonmilitarydimensions. It refers also to the larger but looser extent to which military considerations tendto influence or dominate national decisionmaking over a broad range of matters. The phrasedoes not necessarily suggest "aggressiveness" or other kinds of behavior that one might associ-ate with a relatively heavy emphasis on military considerations as the phrase is used here.Nor, obviously, does our concept preclude such behavior; and the political incentives leadingtoward overdevelopment of military dimensions in a given nation in fact may induce aggres-siveness and the like.

Four military dimensions are explored in this study. The first two reflect the relativeburden of resources consumed in military activities, perhaps better summarized as the size ofthe military dimension: military spending as a proportion of GNP, and military manpower lev-els as a proportion of total population. The third is the overall sophistication or level of technol-ogy characterizing the military compared with that in the civil sectors. The fourth is the more

2

qualitative dimension of civil/military relations: the influence of the military in political affairs,the "social status" of the military, and the extent of military involvement in the economy.None of these dimensions alone provides a c ,mplete nl1dsure; however, as a group they providea fairly broad and reasonable basis with which to appraise the relative emphasis of Commu-nism upon nations' military dimensions.

Estimates of military spending by the Soviet Union have received enormous attention inboth the classified and open literatures.' Moreover, there exists a large body of writings oncivil/military relations in various nations and regions. 2 However, the effect of Communism perse upon the tendency of nations to emphasize their military dimensions has not received exten-sive empirical analysis. One exception is Pryor,3 who constructs and tests econometrically asimple model of defense spending; he finds no significant effect of Communism on militaryspending as a proportion of GNP. Another exception is Payne,4 who discusses the generalissue of the effects of Marxism-Leninism on national militarization. Payne constructs simplestatistical tests of data on force ratios-military personnel as a proportion of totalpopulation-and finds a large and significant difference between Communist and non-Communist nations. Pryor does not offer a conceptual argument predicting a difference in thedevelopment of military dimensions between Communist and non-Communist nations; Paynedoes argue that the ideological need for "class struggle" induces Communist regimes to over-develop their military sector (as measured by the force ratio). This relative dearth5 of explora-tion into a causal relation between Communism as a political and economic system andresource allocation to the military suggests the usefulness of such a discussion, to which wenow turn.

'See, for example, Abraham S. Becker, Sitting On Bayonets: The Soviet Defense Burden and the Slowdown of SovietDefense Spending. RAND/UCLA Center for the Study of Soviet International Behavior, JRS-01, December 1985. Seealso the Joint Economic Committee, Allocation of Resources in the Soviet Union and China, Hearing Before the Sub-committee on Economic Resources, Competitiveness, and Security Economics, Part 11, March 19, 1986. Another goodreference is Abraham S. Becker, The Burden of Soviet Defense: A Political-Economic Essay, The RAND Corporation,R-2752-AF, October 1981. Other references are discussed or noted below.

2See, for example, Morris Janowitz, Military Institutions and Coercion in the Developing Nations, Chicago: Univer-sity of Chicago, 1977. See also Roman Kolkowicz and Andrzej Korbonski (eds.), Soldiers, Peasants, and Bureaucrats,London: George Allen & Unwin, 1982.

3See Frederic L. Pryor, Public Expenditures in Communist and Capitalist Nations, London: George Allen & Unwin,1968, pp. 84-127.

4See James L. Payne, "Marxism and Militarism," Polity, forthcoming. See also James L. Payne, Why Nations Arm,unpublished manuscript, 1987, Chap. 8.

5However, see Dwight R. Lee, "Arms Negotiations, the Soviet Economy, and Democratically Induced Delusions,"Contemporary Policy Issues, October 1986, and Benjamin Zycher, "Soviet Incentives in Arms Control," ContemporaryPolicy Issues, October 1986.

II. SOME HYPOTHESES ON COMMUNISM AND A RELATIVEEMPHASIS UPON MILITARY DIMENSIONS

Consider a nation making decisions on the allocation of resources between military (i.e.,

defense) and nonmilitary activities. Such decisions must be made collectively because of thenature of defense: all citizens must consume the same amount, and no citizen can be excludedfrom consuming the amount chosen collectively. Thus, defense is in many respects an exampleof what economists call a "public" or "collective" good.6 It is reasonable to hypothesize-indeed, it is almost tautological-that choices with respect to the scale of defense activities aredetermined by the perceived value and cost of defense. That is, thinking about the variabledegree of military dimensions across nations usefully can begin by considering the differencesin demand and supply conditions faced by different nations in the military "market." Ourworking hypotheses upon which the subsequent empirical analysis is based can be summarizedas follows.

1. Communist systems tend, other things equal, to display higher demands for militarygoods and services than do non-Communist systems; these higher demands derive fromexpressed or implicit systemic objectives and pressures.

" Den ucratic decision processes may tend to favor special interest programs at theexpense of spending on public goods (e.g., defense) that produce diffused benefits forthe citizenry at large. This dynamic may be offset partially, but not totally, by thelobbying activities of the "military-industrial complex" on behalf of military programsin democratic societies. Moreover, to the extent that a greater degree of economic spe-cialization characterizes non-Communist systems compared with Communist ones,greater demands for spending benefiting private interests will result, thus reducing the

resources available for defense.* Provision of a credible national defense can substitute for provision of a high living

standard as a source of domestic political support." Communism produces a political/ideological commitment or incentive to further the

growth of Marxist-Leninist systems, as a means of enhancing domestic political sup-port (or reducing potential opposition), through expansion of military power.

2. Communism has a comparative (cost) advantage in the supply of resources for militaryuses.

" The inefficiency of resource use in the civil sectors reduces the opportunity cost ofresource use in the military sector.

" Centrally planned economic systems work relatively well in the mobilization ofresources for large efforts with known production processes or functions.

This discussion assumes implicitly that the collective decisionmaking process would yield a unique choice on thelevel of defense. In other words, it assumes away the transitivity or "cyclical majority" problem analyzed by KennethArrow in Social Choice and Individual Values. New York: Wiley, 1963. Certain assumptions about the preferences ofdecisionmakers render the intransitivity issue unimportant. See Duncan Black, The Theory of Committees and Elec-tions, Cambridge: Cambridge University Press, 1958. For a discussion of the reasonableness of these assumptions, seeScott L. Feld and Bernard Grofman, "Partial Single-Peakedness: An Extension and Clarification," Public Choice. Vol.51, No. 1. 1986, pp. 71-80.

-Note here an observation by Holloway:

Military R&D is more effective than civilian R&D in the Soviet Union. The defense sector is well suitedto the development and production of follow-on systems (for example, tanks) where no great shift of mis-sion or technology is required. The Soviet Union has also been able to organize large-scale innovation

3

4

In short, our general prediction is that Communist systems tend to develop their militarydimensions more fully than du non-Coammunist systems, whether democratic or not. Thesehypotheses can be elaborated as follows.

THE SOCIAL DEMAND FOR MILITARY SERVICES

The demand for military services can be divided into a "social" or "collective" demand forsecurity from external threats, and a separate "political" demand for military services on thepart of decisionmakers. Consumption of a unit of defense satisfies both of these demands;defense, therefore, in many respects constitutes an example of a collective good in that provi-sion of a unit of it for one purpose (or to anyone) automatically satisfies other purposes (ordemanders) as well. Therefore, conceptually, the two demands can be aggregated vertically ina supply/demand framework. Our hypothesis is that both of these demands are likely to behigher in a Communist state than in a non-Communist one, ceteris paribus.

Consider democratic and undemocratic governments making allocational choices betweenmilitary and nonmilitary outputs. For simplicity, assume that both governments have perfectinformation on the value and cost of defense.8 It is reasonable to hypothesize that democraticsystems using majoritarian decision processes would tend to favor special interest programs atthe expense of defense. By inducing through political processes a reduction in defense spend-ing, special interests (coalitions) can benefit themselves at the expense of the polity at large. 9

This is a public sector variant of the standard externality problem.' 0 Thus far, then, we predictthat the observed social demand for defense will tend to be greater in undemocratic than in demo-cratic regimes, ceteris paribus.

Non-Communist economic systems as a group are likely, ceteris paribus, to be more effi-cient economically than Communist economic systems." This greater economic efficier.cy islikely to result not only in greater national wealth per se, but also in a greater degree of

when the political leaders have deemed it necessary; the R&D system is well suited to the concentrationof resources on specific goals such as the development of the atomic bomb or ... intercontinental ballisticmissile. It is not so well adapted to the lateral or horizontal transfer of technology across departmentalboundaries, unless this is organized as a matter of priority from above.

See David Holloway, "War, Militarism, and the Soviet State," Alternatives, VI, 1980, p. 72.'It is unnecessary to assume that this information is perfect or costless; it is sufficient, and reasonable, to assume

that both governments face equivalent information costs.9See, for example, Richard E. Wagner, The Public Economy, Chicago: Markham Publishing Co., 1973, pp. 38-52.

Military expenditures are not wholly indivisible because military bases and defense contractors are located in particu-lar geographic areas or congressional districts. Thus, the practice of dispersing bases and contracts among a largenumber of congressional districts may be a method of increasing the defense budget relative to the nondefensc budget,by enhancing the degree to which the benefits of defense spending are divisible. This might achieve greater efficiencyin the allocation of resources in the public sector overall. Nonetheless, defense is likely to embody considerably more"publicness" than the nondefense expenditures of government.

'°Transfer programs may embody some "collectiveness," particularly if democracies choose to fund them in partbecause of the indivisible benefits received by taxpayers from the knowledge that others thus are provided access tosome minimum level of "necessities." See, for example, Harold M. Hochman and James D. Rodgers, "Pareto OptimalRedistribution," American Economic Rev'ew, September 1969. Nonetheless, if the collective or indivisible benefits ofgovernment redistribution programs were the only or main objectives of such spending, then we would expect the pol-icy to take the form of straightforward pecuniary subsidies for charitable activity chosen by private individuals. Taxdeductibility for charitable donations is an obvious form that such subsidization can take. That the governmentchooses to undertake major redistribution programs oriented toward particular groups of beneficiaries indicates thatthe private or divisible benefits are the more important motivation. See Jameq D. Rodgers, "Explaining Income Redis-tribution," and James M. Buchanan, "Who Should Distribute What in a Federal System," in George E. Peterson andHarold M. Hochman, Redistribution Through Public Choice, New York: Columbis University Press, 1974. See alsoJames M. Buchanan, Public Finance in Democratic Process, Chapel Hill: University of North Carolina Press, 1967,Chap. 9.

"1This is discussed more fully below in the subsection on the cost of resource allocation to military uses.

5

specializat~on and "division of labor. ' 2 Demsetz has pointed out that this expansion in special-ization tends to increase the number of concentrated interest groups, and thus the demand forpolicies providing divisible benefits for those groups. 13 The resulting greater demands uponnon-Communist governments for private transfers are likely to reduce the resources availablefor collective goods, such as defense. In short, we hypothesize that the social demand fordefense may tend to be greater in Communist than in undemocratic but non-Communist coun-tries. On the other hand, non-Communist systems without relatively force-functioning mar-kets may not display greater efficiency in resource use than do Communist systems. At aminimum, therefore, this social demand should be no higher in the non-Communist systemthan in the Communist one."4

Note that our implicit definition of an "interest group" is one receiving the divisible bene-fits of a particular government spending program. Our hypothesis is not that Communistregimes escape interest group pressures. Instead, we hypothesize that Communist systems tendto produce fewer pressures against spending on collective goods. Nor do we suggest that Com-munist systems are likely to spend an optimal amount on defense; indeed, our distinctionbetween the "social" and "political" demands for defense suggests the hypothesis that Com-munist states may consume too much defense from a purely social perspective. The demandfor military goods and services may be particularly high on the part of Communist specialinterest groups (the core of the Nomenklatura); this demand may be satisfied by virtue of theundemocratic policy process and the role of the military in official political mythology. 15

THE POLITICAL DEMAND FOR MILITARY SERVICES

The "political" demand for military services on the part of regimes can be hypothesized tocomprise two separate demands: a demand for protection from internal competitors, coups,and subversion, and a demand for the political support among the population that can beassumed to be an ancillary benefit of provision of a credible national defense. At a minimum,it is reasonable to assume that the demand for military protection from internal competitors isno greater in democratic than in undemocratic regimes. As between Communist and non-Communist (but undemocratic) governments, coups may be more frequent or probable amongthe latter than among the former, but that may be the endogenous outcome of more efficient(that is, ruthless) internal militarization in Communist countries. It is reasonable to assume,then, that this component of the political demand for military services is roughly equal betweenCommunist and non-Communist nations.

In terms of the political demand for enhanced political support derived from provision ofa credible defense, it is reasonable to hypothesize that democratic governments have lowerdemands for military services as a source of domestic support than do undemocratic regimes.After all, the very process of winning elections generates such support. Moreover, it is

'See, for example, George Stigler, "The Division of Labor Is Limited by the Extent of the Market," The Organiza-tion of Industry, Homewood. Illinois: Richard D. Irwin, Inc., 1968.

"See Harold Demsetz. "The Growth of Government," Economic, Legal, and Political Dimensions of Competition,New York: North Holland, 1982.

"Another reason for differences in the behavior of Communist and non-Communist nondenocracies may be thefollowing. Communist parties can be viewed as institutions with secure "property rights" (or interests) in the futuresecurity of the nation. As such, the Party (i.e., future leaders) has incentives to impose constraints upon the ability ofcurrent leaders to enrich themselves at the expense of defense. Political authorities in non-Communist nondemocra-cies may have weaker incentives to consider the future security of the nation because of the relative absence of suchlong-lived institutions as a Communist Party.

' This last point was suggested by Abraham Becker.

6

reasonable to hypothesize that Communist regimes have a greater demand for such supportassociated with national defense than do other undemocratic governments, for two reasons.First, political support is likely to vary with (growth in) living standards and with popular per-ceptions about the ability of the regime to provide a credible national defense. 16 If Commu-nism, because of inherent economic inefficiency,17 is less able to deliver the former, Communistgovernments may attempt to substitute the latter in the pursuit of such support.

Moreover, to the extent that popular political support is enhanced by implementation ofideology, external subversion as an aid to "historical processes" may serve as a further vehiclefor strengthening political support. Export of revolution was implicit or explicit in much ofwhat Lenin had to say. An example is Lenin's argument about the international responsibilityof proletarians, put forth at the Third International: "The Third International took over thework of the Second International .... and began to carry into effect the dictatorship of theproletariat." Another example, from Against the Stream (Lenin and Gregory Zinoviev, Len-ingrad, 1925) is the following:

Uneven economic and political development is an absolute law of capitalism. Hence, the vic-tory of socialism is possible first in a few or even in one single capitalist country takenseparately. The victorious proletariat of that country, having expropriated the capitalist andorganized its own socialist production, would rise against the rest of the capitalist world,attract to itself the oppressed classes of other countries, raise revolts among them against thecapitalist, and, in the event of necessity, come out even with armed force against the exploit-ing classes and their states. For "the free federation of nations is impossible without a moreor less prolonged and stubborn struggle of the socialist republic against the backward states."

It is reasonable to assume that Communist regimes view growth rather than contraction of theworld socialist "system" as consistent with preservation of their domestic political power.,, It islikely to be the case then, that the demand for military services is derived in part from thedemand for external subversion, which probably is greater for Communist than for non-Communist regimes.

Thus far, then, our hypotheses with respect to the demand for military services can besummarized as follows:

16Holloway notes that "inside the Soviet Union the Soviet military effort is widely seen as being legitimate and aspursuing legitimate goals." See Holloway, fn. 7 above, p. 77. Of course, this may stem in the Soviet context from theexperience of the Great Patriotic War, but the constant emphasis in official Soviet writings about the need for vigi-lance against the threat of "imperialism" is consistent with this argument. Moreover, the daily reminders of the Sovietsufferings and heroism during the Second World War are consistent with a hypothesized political incentive to associatethe regime in the popular mind with provision of a credible national defense. Holloway notes that one reason forpopular acceptance of a high military burden in the Soviet context is the lengthy period of "peace and internal stabil-ity" enjoyed by the Soviet Union in the postwar period. This again is consistent with a relationship between militaryservices and political support, as is Holloway's observation that "[military-patrioticl education can be seen as aresponse to the problems of legitimation that the Soviet state has faced in the post-Stalin period."

"The relative economic inefficiency of Communism is discussed below."5 Moreover, external subversion may be necessary as a means of reducing foreign living standards, to the extent

that comparisons that can be made by the domestic population reduce political support for the regime. This is pre-cisely the argument of Voslensky in Nomenklatura: The Soviet Ruling Class, Garden City, New York: Doubleday andCompany. Inc., 1984. p. 326:

Because the mere existence of a free and affluent West shows its subjects that the capitalist system, inspite of all its faults, provides better living conditions, the nomenklatura believes that the day might comeIthat it, subipcts tire of living in fear). As this has nothing to do with any provocative attitude on thepart of the West, but is a consequence of its mere existence, no anuat of detente or "good conduct" onits part will cause the Soviet leaders to depart from . . . their objective of destroying the Western system.

Interestingly, in a recent article in Pravda (reported in the Los Angeles Times, July 11, 1987) Yevgeny M. Primakovargued that "the exclusion of the export of revolution is an imperative of the nuclear century," thus acknowledging thepast role of external subversion for the Soviet Union.

1. The observed social demand for defense will tend to be greater in undemocraticregimes than in democratic regimes.

2. The observed social demand for defense may be greater in Communist countries thanin non-Communist but undemocratic ones.

3. The political demand for defense derived from the potential for internal coups isroughly equal between Communist and non-Communist nations.

4. Democratic regimes have lower demands for military services as a source of politicalsupport than do undemocratic regimes.

5. Communist regimes have a greater demand for military services as a source of politi-cal support and as a vehicle for external subversion than do other undemocraticregimes.

THE COST OF RESOURCE ALLOCATION TO MILITARY USES

With respect to the perceived cost or supply of military services, our hypothesis can besummarized as follows: the inherent economic inefficiency of Communism suggests that theopportunity cost of (marginal) resource allocations to the military under Communism is lowerthan that under more efficient economic systems. This relative economic inefficiency of Com-munism is hypothesized to result both from the inefficient incentives provided by Communismas an economic system, and from the inefficient incentives necessarily provided by Communismas a political system.

In terms of pure economic incentives for producers and consumers, a large literature onthe effects of various kinds of property rights arrangements, a weak or absent profit motive,and bureaucratic organization of supply conditions suggests that poor resource allocation, poorresource productivity, and reduced wealth are the predictable results of centralized planningand state ownership of most capital assets.1 9 This general prediction of economic theory is con-sistent with the available empirical evidence. 20

Moreover, Moore has pointed out that the problem of agency costs is likely to be particu-larly important in centrally planned systems in which .apital markets, the market for cor-porate control, and the market for managers are absent or severely attenuated.2' Since theseexternal constraints and exogenous monitors of manager behavior are absent, authorities mustmonitor the behavior of managers through the planning system. But much of the informationprovided through the planning system comes from the managers themselves.

19See, for example, Armen A. Alchian and Harold Demsetz, "Production, Information Costs, and Economic Organi-zation," American Economic Review, December 1972; Eirik Furubotn and Svetozar Pejovich. "Property Rights andEconomic Theory: A Survey of Recent Literature," Journal of Economic Literature, December 1972; WilliamNiskanen, "Bureaucrats and Politicians," Journal of Law and Economics, December 1975; and William Niskanen,Bureaucracy and Representative Government, Chicago: Aldine, 1971; Louis De Alessi, "Implications of Property Rightsfor Government Investment Choices," American Economic Review, March 1969.

20See in particular, Abram Bergson, Productivity and the Social System-The USSR and the West, Cambridge:Harvard University Press, 1978, for a detailed examination of relative productivity and efficiency in the Soviet Union,the United States, and the West. An extension of that analysis is presented in Abram Bergson, "Comparative Produc-tivity: the USSR, Eastern Europe, and the West," American Economic Review, June 1987. A useful conceptual andempirical discussion of the relative efficiency of market and nonmarket modes of economic organization and produc-tion is provided by Charles Wolf, Jr., Markets or Governments: Choosing Between Imperfect Alternatives, Cambridge:MIT Pre.s. 1987, Chaps. 6 and 7. See also Keith Marsden, "Private Enterprise Boosts Growth," Journal of EconomicGrowth, first quarter, 1986, for an examination of the effects upon economic growth of various levels of direct govern-mental management in 17 African and Asian countries.

2 1"Agency costs" are the costs or difficulties of monitoring the behavior of enterprise managers (or, more generally,individuals who act on behalf of others) so that they make decisions and perform in ways that further the interests ofthe enterprise owners. In the Communist context, the "owners" are the political authorities. See John H. Moore,"Agency Costs, Technological Change, and Soviet Central Planning," Journal of Lau and Economics, October 1981.

8

In addition, the implicit capital structure of state-owned enterprises leads the politicalauthorities to reduce agency costs by imposing disincentives for innovation and risk-taking.Managers cannot establish equity positions in the enterprises; in effect, all capital is borrowedfrom the state. This creates an inherent bias toward risk-taking, particularly if the rewards forsuccessful innovation are not offset sufficiently by penalties for failure. Thus, the implicit cap-ital structure of state-owned enterprises provides incentives for risky behavior by managers, asthe costs of failure would be borne by others. The rewards would be captured (in part) by themanagers in the form of bonus income or reduced managerial effort. The latter form may bethe more likely as it would be more difficult to detect. In addition, to the extent that success-ful innovation yields career advancement, with attendant nonpecuniary rewards and per-quisites, incentives for risk-taking by managers would be stronger still.

But such risky behavior would be inconsistent with the interests of the political authori-ties. Their efforts to monitor and control the behavior of enterprise managers-that is, toreduce agency costs-leads them to impose an incentive structure different from that inherentin the capital structure of the enterprises. Specifically, they discourage innovation and risk-taking by managers, because innovation would increase the difficulty of oversight by the cen-tral authorities. Moore cites data indicating the weak incentives for innovation provided bythe central authorities in the Soviet Union.22 Moreover, failures of innovative undertakings arelikely to have adverse implications for the supply system, and the reasons for such failures toreach target outputs would be obscured by the innovative activity. The political authoritiesdiscourage innovation, and provide strong incentives for fulfillment of output quotas instead.

These problems in oversight of enterprise management lead the political authorities tofavor long runs of standardized products, the production of which is easier to monitor. Agencycosts lead the system to favor long service lives for capital equipment as well, which againreduces the problems of monitoring manager behavior. The political authorities have incen-tives to resist requests for replacement of capital equipment on grounds of obsolescencebecause "obsolescence" is difficult to measure without markets for capital and for capital goods,because replacement would tend to increase the frequency of supply interruptions, and becausethe obsolescence argument would provide excuses for poor performance by others, thus increas-ing monitoring costs.

In short, Communism as an economic system provides important inherent incentives toresist innovation and technological advance. Since technological advance is equivalent toincreases in the supply of resources that are complementary with labor and capital, theinherent resistance under Communism is likely to reduce productivity and efficiency relative tothat under non-Communist economic systems. This is another reason to hypothesize thatCommunism tends to lower the opportunity costs of military resource use.

There is an important caveat to "his argument. For production of advanced weaponry ofhigh technical sophistication, resources used by Communist countries may have high civil sec-tor opportunity costs in terms of highly skilled labor, costly materials, and the like. In otherwords, the civil sector productivity of these resources may be very high in certain applications.The greater economic efficiency of non-Communist economic systems may yield even higheropportunity costs, but there may be certain conditions and sectors under which this generalrule may not apply. Such exceptions are likely to apply largely to the Soviet Union andperhaps the PRC for production of some advanced weapons. Moreover, the opportunity costof, say, defense labor is likely to vary substantially among such nations as the Soviet Union,Czechoslovakia, and Angola. And for some non-Communist underdeveloped nations, theopportunity costs of arms production may be very high.

22See Moore, fn. 21 above, p. 21C.

9

It is reasonable to hypothesize that the effects of Communism as a political system uponefficiency and productivity also are likely to be negative. A central systemic incentive forCommunism as a political system is the elimination of political competition outside the con-fines of the Party, and the creation of economic dependence upon the Party23 for most individ-uals, particularly potential competitors. Political competition outside the confines of the Partycannot be allowed because competitors inevitably would be driven to promise higher livingstandards, which are likely to be attainable most easily through expansion of the private sector.Moreover, the incentives required to achieve substantial increases in aggregate output neces-sarily would lead to accumulation of sizeable personal fortunes by significant numbers of indi-viduals;24 but it is wealthy individuals, with independent access to resources and other instru-ments of influence, who can fund underground publications and who otherwise are moreimmune from the preferences of the political authorities. 25 In short, we hypothesize that Com-munism provides its leaderships with incentives to avoid economic arrangements facilitatingthe growth of a class of individuals more or less independent from Party fiat. Economic ineffi-ciency is likely to be the result. Our next hypothesis, then, can be summarized as follows:

6. The cost (supply) of military services systematically is lower (greater) under Com-munist than non-Communist economic systems. 26

Taken as a group, our hypotheses suggest that both the demand for and supply of milita-rism are greater under Communism than under non-Communism.

SOME FURTHER IMPLICATIONS

As noted above, Abraham Becker has suggested that the demand for military goods andservices may be particularly high on the part of Communist special interest groups. Militaryconsiderations thus may be relatively important in the political calculations of authorities inCommunist systems. This is not to suggest that the Communist militaries systematically "con-trol" the civilian leaderships; indeed, Communist political institutions seem designed to achievethe opposite. Instead, if military considerations loom relatively large in political calculationsand decisions, then this may carry implications for what can be termed "civil/military rela-tions" as a fourth military dimension. It is reasonable to hypothesize that systematic differ-ences in such relations between Communist and non-Communist states may be reflected bysuch parameters as:

23 Hence, the requirement for the "leading role of the Party" in most dimensions of group activity. Note that politi-cal pressures for high productivity in the civil sectors-that is, a relatively high opportunity cost for resources used inmilitary activities-are likely to be highest in democracies because of the political pressures for higher living standardscreated by political competition.

24 1n other words, individuals can be induced most effectively to produce wealth if they are allowed in the process tobecome wealthy themselves. An effort to make a nation wealthy necessarily must make large numbers of individualswealthy as well.

"51ndeed, the goal of enhanced productivity and wealth requires that resources be allocated more efficiently. Suchefficienc' requires decentralized markets, which would make the preferences and whims of Party authorities lessimportant or even irrelevant. Obviously, the underground economy in the Soviet Union has enriched some individuals;this may be the price necessary to achieve living standards necessary for political stability. Thus, such activity moreor less has been tolerated during several periods. Nonetheless, the general conflict between individual wealth and amonopoly of political authority by the Party seems clear.

26Note that this lower cost (greater supply) means that ceteris paribus, Communist regimes will tend to consumemore units of defense than non-Communist ones. It does not mean that they necessarily will spend more on the mili-tary, since if the demand for militarism is relatively inelastic, a lower price will lead to lower total spending. On theother hand, elastic demand would lead to greater spending.

10

* The influence of the military in political affairs, including the choice of politicalleadership.

" Relative military/civilian pay, in-kind compensation, and perquisites." The extent of military involvement in the economy.* The degree of political indoctrination of the military.

In other words, it is reasonable to explore, if only in a qualitative fashion, the extent towhich the higher demands of Communist interest groups for military services may affect thesecomponents of civil/military relations. We discuss this subject next, based upon the extensiveliterature on civil/military relations. Section VIII presents four nation pairings.

Influence of the Military in Political Affairs

While "influence" is a concept for which measurement is difficult at best, it perhaps mostusefully can be thought of as the degree to which military leaders participate in politicaldecisionmaking as a matter of course. And as a crude generalization, it is the case that inCommunist systems senior military leaders are-and are required to be-members of the rulingCommunist Party, members of the ruling elite, (Nomenklatura),27 and often, members of theforemost political decisionmaking body. This overlap or "blurring" of the distinction betweenpolitical and military authority seems to be a phenomenon found in Communist systems moresystematically than in non-Communist ones. 28 Given individuals sometimes hold positions ofauthority simultaneously in Party, government, and military institutions. This is particularlythe case in China and Vietnam; and some political/military overlap exists in varying degrees inmost of the Communist world. Moreover, there is some evidence that, notwithstanding the"ethic" of military subordination to the Party, Communist military establishments do exerciseimportant political power at times during succession crises or power struggles. Obvious exam-ples are the support by the Soviet military for Khrushchev in 1957, for Brezhnev in 1964, andthe actions of the Chinese PLA during the Cultural Revolution and, later, against the Gang ofFour.

Counterexamples among non-Communist nations are important. There are the variousmilitary regimes in Panama and elsewhere in Latin America. There is the important politicalrole played by the militaries in Egypt, Iraq, and South Korea. There is the prominent roleplayed by the Philippine military in the ouster of Marcos and in the current troubles faced byAquino. There are the military regimes in Asia, such as Pakistan and Thailand. Thus, theinfluence of the military in non-Communist nations covers a spectrum both smaller andgreater than that displayed as a central tendency by Communist systems. The qualitative evi-dence then is mixed in terms of the relative political influence of the militaries in Communistand non-Communist systems. While Communist militaries appear to be involved in politicaldecisionmaking on a more systematic basis than non-Communist militaries, the larger varianceamong non-Communist systems makes it difficult to draw general conclusions. The issue ofmilitary influence in political affairs is revisited with four nation pairings in Sec. VIII.

27'See, for example, Michael Voslens.-v, fn. 18 above.28See, for example, Samuel P. Huntington, The Soldier and the State, Cambridge: Harvard University Press, 1957;

Monte R. Bullard, China's Political-Military Evolution: The Party and the Military in the PRC, 1960-1984, Boulder:Westview Press, 1985; Jonathan R. Adelman (ed.), Communist Armies in Politics, Boulder: Westview Press, 1982;June T. Dreyer, "Civil-Military Relations in the People's Republic of China," Comparative Strategy, 1985; Ali T.Sheikh, "Civil-Military Relations in China," Strategic Studies, Autumn 1984; Dale R. Herspring and Ivan Volgyes(eds.), Civil-Military Relations in Communist Systems, Boulder: Westview Press, 1978; and Carl Beck and Karen EideRawling, "The Military as a Channel of Entry into Positions of Political Leadership in Communist Party States,"Armed Forces and Society, February 1977.

11

Relative Military/Civilian Pay and Perquisites

Herspring and Volgyes 2 9 note that "the Party is ofter able to enhance the loyalty of theofficer corps by offering rewards not available to the remainder of society, such as specialstores, and special housing." The literature provides some evidence that it is predominantly inCommunist systems that military officers receive economic benefits substantially greater thanthose enjoyed by comparable individuals in civilian careers. Volgyes notes, for example, that inBulgaria, officers' salaries are 50 percent to 70 percent higher than comparable civilian com-pensation; and this does not include the easier access to housing, health care, clothingallowances, a lower retirement age, and recreational facilities enjoyed by Bulgarian militaryofficers. 30 While such superior compensation certainly is present in some non-Communiststates-an example was the largesse given loyal Philippine military officers by Marcos-theavailable data and descriptions in the literature indicate that such attractive military compen-sation is not more prevalent in non-Communist than Communist systems.

Military Involvement in the Economy

The literature suggests that military involvement in economic matters, as a generaliza-tion, is more pronounced among Communist nations than among non-Communist ones.31 TheChinese PLA long has established and managed civilian industrial facilities, conducted con-str -ion of irrigation systems, and managed construction and operation of extensive segmentsof the railway system. Although less involved in economic production activity than the PLA,the Soviet military nonetheless pursues more such activity than most non-Communist armies.In particular, the Soviet military has important functions in food production and in construc-tion of railroads, buildings, and roads. 32 Moreover, active-duty Soviet officers often fillmanagerial positions in such prominent industries as machine building. Non-Communist mili-taries serve important economic functions in some cases, but the literature indicates that suchactivity is more pervasive among Communist states. With a few exceptions, the participationof non-Communist militaries in their respective economies is limited to disaster relief and druginterdiction.

Degree of Political Indoctrination of the Military

While there are a few examples of political indoctrination directed at non-Communistmilitaries (e.g., Taiwan), it is among Communist nations that such "education" usually consti-tutes a central feature of military training This phenomenon is manifested by the presence ofpolitical officers in most units; in many cases, they share command responsibility with the pro-fessional military officer. Johnson et al. and Volgyes describe in detail the organizational and

29See Herspring and Volgyes, fn. 28 above."OSee Ivan Volgyes, The Political Reliability of the Warsaw Pact Armies: The Southern Tier, Durham: Duke

University Press, 1982.31See Edward A. Olsen and Stephen Jurika, Jr. (eds.), The Armed Forces in Contemporary Asian Societies, Boulder:

Westview Press, 1986.32See Rebecca Strode, "The Soviet Armed Forces: Adaptation to Resource Scarcity," Washington Quarterly, Spring

1986; Harriet F. Scott and William F. Scott, The Armed Forces of the USSR, Boulder: Westview Press, 1981.

12

indoctrination features of the Warsaw Pact armies directed at enhancement of their politicalreliability.

33

These hypotheses and qualitative tendencies suggested by tie literature are revisited withfour nation pairings in Sec. VIII.

33See A. Ross Johnson et al., East European Military Establishments: The Warsaw Pact Northern Tier, New York:Crane Russak, 1982; Ivan Volgyes, fn. 30 above.

III. WHICH NATIONS ARE COMMUNIST?

We must delineate those nations to be classified as "Communist" or "non-Communist" inorder to pioceed with the empirical analysis. As Payne3 4 points out, a useful method withwhich to begin such a delineation is self-classification. Payne reproduces a compilation ofnations that have declared themselves publicly to be adherents of Marxism-Leninism; 35 there isa total of 29. Starr lists Communist Parties worldwide, with the 24 ruling ones delineated assuch.3 6 Finally, Szajkowski discusses 25 nations in his survey of Marxist governments. 37 Fromthese sources, and with some adjustments for data availability, the 26 nations classified as"Communist" in the empirical analysis found in the following sections are listed in Table 1.

Note that some of these nations have been "Communist" during only part of the sampleperiod. The 63 nations classified as "non-Communist" are listed in Table 2. They were chosenon the basis of alliance comparability (e.g., NATO vs. the Warsaw Pact), obvious historical cir-cumstances (e.g., South Korea vs. North Korea), similar geographic location, and data avail-ability. Some non-Communist countries were excluded because they do not provide aninteresting regional comparison with one or more Communist countries. Examples are Canadaand most of the countries in South America. These nations are non-Communist and tend tohave low spending burdens and manpower proportions, so that exclusion of them from thesample is likely to make the findings conservative.

Sections IV through VIII present empirical and qualitative examinations of ourhypotheses, in terms of the four dimensions noted above.

Table I

NATIONS I)ELINEATID AS ('OMMtINIST

Africa Asia L.atin Anieriwa

.- lkinia Angola Atghmii,lan C'uba

B1'ulg ria heginning 197)) beitining 1971 NicaraguaBe\ ni Ile in (Cainlidbia tlegilninig 198(1)

(i eriIman I enirit" lReoibic Iig1 theginning 197,7fitingirv [ 111"p>lia (Chhnl

Poland hbeginning I77) North Ktrea}{t~lla li~t( ;tild[IO

bleginning 197-

thegionini 1977iS-milia

ihetore 197iSAuth Y'clie-t

14Payne, 1987, fn. 4 above.'The compilation was made by Philip (G. R eder in "CMEA and the New Marxist Leninist States: A Socialist

Dependencia?" delivered at the 1984 Annual Meeting of the Atnerican Political Science Association.' Richard F. Starr, "'Checklist of ('omnunist Parties in 1984." 'rbl'ms of (Cnurnuninsm, March/April 1985; and

"Checklist of Communist 'arties in 198-. 'roblems of ('ounnituoisrn. March/April 1987.Bogdan Szajkowski led.), Marxi.st G(a rnbnntts. A World Sur'e , Vols. 1 3. London: The Macmillan Press, 1981.

13

14

Table 2

NATIONS DELINEATED AS NON-COMMUNIST

NorthAmerica, Latin MiddleEurope America Africa Asia East

Belgium Colombia Botswana Bangladesh EgyptBritain Costa Rica Burkina Burma IranDenmark Dominican Republic Cameroon India IraqFinland El Salvador Central African Japan IsraelFrance Guatemala Republic South Korea JordanFederal Republic Honduras Chad Pakistan Libya

of Germany Jamaica Ghana Philippines SyriaGreece Panama Ivory Coast S. Vietnam North YemenIreland Kenya Taiwan TurkeyItaly Madagascar ThailandNetherlands MaliNorway NigeriaPortugal NigerSpain SenegalSweden Sierra LeoneSwitzerland South AfricaUnited States Sudan

TanzaniaTogoZaireZimbabwe

IV. RESOURCE ALLOCATION TO THE MILITARYIN COMMUNIST AND NON-COMMUNIST STATES

INTRODUCTION

What we would like to compare, ideally, are the relative consumption levels of the mili-tary "good" in Communist and non-Communist nations, holding all else constant. Since it isdifficult even to define such a good, and more difficult still to measure it, we are forced to relyupon surrogate measures of this consumption. This section addresses military spending, as aproportion of GNP, and military manpower levels, as a proport" .. of total population, as sur-rogates for military consumption (or as military dimensions) that are both reasonable and

widely accepted.Military spending is measured, in the analysis below, in local currencies as a proportion

of GNP. Local currencies are used instead of conversions into dollars in order to avoid thecomplications and possible biases introduced by shifts in exchange values between the localcurrencies and the dollar. Moreover, official exchange rates are often arbitrary and unrealistic,so that use of local currencies can avoid possible resulting distortions. Since comparisons can-not be made in terms of differing currencies, spending is presented as a proportion of GNP asa reasonable measure of the burden of military spending in each country. This burden mea-sure can be compared meaningfully across nations.

It was noted above that one reason to expect greater consumption of units of the militarygood in Communist states is the lower effective "price" (opportunity cost) faced by such statesfor military consumption, due to systemic economic inefficiency. This lower price might resultin lower total spending, or a lower spending burden as a proportion of GNP, if demand for themilitary good were relatively inelastic. Therefore, while examination of spending remainsimportant, interesting, and informative-because we wish to know whether Communist statessystematically can be expected to devote a higher or lower proportion of their GNP to militaryactivities-examination of military manpower levels as a proportion of total population mayprovide a more direct answer to the fundamental issues motivating this study, as well as acheck on the empirical findings provided by analysis of spending burdens. This assumesimplicitly that military manpower is a better proxy measure for consumption of units of mili-tary services than is the spending burden. That is likely to be a reasonable assumption, partic-ularly if the use of military manpower is roughly proportional to consumption of the military"good," or, equivalently, if use of military manpower is roughly proportional to use of otherinputs in production of units of military services. 8

As noted in Sec. III, our sample consists of 26 Communist nations and 63 non-Communist ones, for the years 1966 through 1983. Data are not equally available or reliablefor all, so some observations are missing. This problem is relatively greater for the earlieryears in the less developed countries.39 Nonetheless, our sample contains a substantial amountof data, allowing us to pursue meaningful statistical analyses.

A brief note on data sources may be useful at this point. Data on manpower proportionsare NATO and U.S. Government estimates, as reported by the Arms Control and Disarmament

'18Payne, 1987, fn. 4 above, offers a similar justification for his use of manpower proportion ("force ratio") as themeasure of militarization.

9The data sources and derivations for spending burden are described in App. A.

1 11

16

Agency, World Military Expenditures and Arms Transfers, various issues. The ACDA datacomprise consistent series for each nation; moreover, they include special forces (e.g., KGBforces) with national security missions, and exclude forces primarily engaged in such noncom-batant services as construction.

One source for the spending burden data is the Stockholm International Peace ResearchInstitute (SIPRI) Yearbook, various issues, which reports data for non-Communist nations asestimated by NATO, the International Monetary Fund (IMF), the United Nations, and otherinternational agencies. The SIPRI series appear consistent and free from systematic biases.Other data were obtained from Professor Robert L. West, Director of the Development andSecurity Project, Fletcher School of Law and Diplomacy. This project has reduced gaps andapparent inconsistencies in Arms Control and Disarmament Agency (ACDA) and other dataseries. Most of the data for eastern Europe were obtained from Thad P. Alton of L. W. Inter-national Financial Research, Inc., New York. The data for the most part are official, adjustedfor gaps and inconsistencies; Keith Crane has shown that the official east European datalargely are unbiased.40 Much of the data for Africa were obtained from Daniel Kohler ofRAND; his research on defense and development in Africa used consistent data series obtainedfrom the sources already listed. Some GNP data were obtained from the IMF and the WorldBank. Some remaining gaps were filled with data from ACDA and from the InternationalInstitute for Strategic Studies (IISS), The Military Balance, various issues. The data arepoorest for Bulgaria, North Korea, Cambodia, Laos, and Vietnam. Econometric findingsexcluding those observations are discussed in Secs. V and VI. For the other nations, the datado not appear to be biased systematically. Indeed, if a bias is present, it probably would weighagainst our hypotheses in Sec. III, as officially reported defense spending in Communist coun-tries is more likely to be underreported than exaggerated.

The data on tanks and jets were obtained from IISS, Jane's Armour and Artillery, andJane's All the World's Aircraft, various issues. They appear to be the best data available inopen sources.

COMPARISONS OF SUMMARY STATISTICS FOR COMMUNISTAND NON-COMMUNIST STATES

Before turning to the more formal econometric analysis, it is interesting to consider theinformation inherent in the straightforward sample statistics for the Communist and non-Communist nations. For all Communist nations over all years in our sample, the averagespending burden (military spending as a proportion of GNP) is 6.97 percent, whereas the pro-portion for the non-Communist nations is 4.26 percent. The difference of about 2.7 percent isstatistically significant at a significance (or at) level of less than 0.001.41 For the Communistnations, the mean manpower proportion is 1.29 percent, whereas for the non-Communistnations it is 0.77 percent. Again, this difference of about 0.5 percent of the population is sta-tistically significant at an (y level below 0.001.

These aggregate comparisons do not control for exogenous influences upon the chosenconsumption of military services, such as foreign threats, multilateral alliances, and the like. Acrude way to allow for such factors is through comparison of individual nations that are "simi-

41'See Keith Crane, Milita'v Spending in Eastern Europe, The RAND Corporation, R-3444-tISDP, May 1987.

41Looselv speaking, this means that the null hypothesis of no difference between the two means can be rejectedwith confidence greater than 99.9 percent.

17

lar" in terms of region, history, population, and, perhaps, culture.4 2 In addition, some nationshave been Communist for only part of the sample period, so that a before/after examinationcan be particularly useful. What follows are such crude comparisons for a few individual Com-munist and non-Communist nations in our sample. The comparisons depend heavily upon thechoice of pairings, and so are somewhat arbitrary; nonetheless, they are revealing.

Table 3 presents the mean spending burdens and manpower proportions for seven pair-ings. The spending burden and manpower portion data in the table are means for each nationfor the period 1966-1983.

For the Soviet Union, one appropriate pairing is the United States. The higher averagespending burden and manpower proportion for the Soviet Union over the United States aresignificant at an a level below 0.001. The next pairing compares the People's Republic ofChina (1983 population of about 1019 million) and India (1983 population of about 733 mil-lion). The Chinese spending burden and manpower proportion exceed those of India byamounts statistically significant at a levels below 0.001.

While data for prerevolutionary China are available only on a nonsystematic basis, vari-ous editions of The Statesman's Yearbook provide data on military manpower and populationlevels in the 1920s and 1930s.4 3 The manpower proportion in 1920 was 0.3 percent of the popu-lation, as it was in 1929 at the end of the civil war. The proportion fell to 0.16 percent in1932. During the post-World War II civil war leading to establishment of the Communist

Table 3

MEANS FOR SPENDING BURDEN AND MANPOWER PROPORTION,

COUNTRY PAIRINGS(Percent)

Spending ManpowerNation Burden a Proportion a

Soviet Union 16.89 <0.001 1.64 <0.001United States 6.48 1.19

Peoples Republic ofChina 13.28 . 0.001 0.39 .0.001

India 3.07 0.26

GDR 3.91 0.001 1.29 - 0.001FRG 3.38 0.80

South Yemen 12.38 0.004 0.99 - 0.001North Yemen 8.61 0.53

Cuba 6.73 0.001 1.78 -0.001Dominican Republic 1.94 0.41

North Korea 12.21 - 0.001 3.34 . 0.001

South Korea 4.86 1.73

Vietnam 22.10 .0.001 1.95South Vietnam 16.94 4.87 -0.001

42Some of the comparisons are dictated by obvious historical circumstances rather than by population or GNP simi-larities. Examples are the German Democratic Republic (GDR) and the Federal Republic of Germany (FRG), orNorth Korea and South Korea.

4VThe Statesman's Yearbook, published annually since 186.1, is now edited by -John Paxton. It is published in NewYork by St. Martin's Press.

18

state, the Nationalist army numbered about I million, and that of the Communists about500,000. As the population of China during that period was about 450 million, this suggests acombined manpower proportion during the civil war of about 0.33 percent. Interestingly, theFebruary 1946 agreement between the nationalist government and the Communist forces pro-vided for a total combined army within 12 months of 108 divisions (about 1.5 million men), ofwhich 18 were to be Communist units. The 108 divisions were to be reduced to 60 over the fol-lowing six months, yielding a total intended "peacetime" force of about 840,000 men. Thiswould have represented a manpower proportion of about 0.19 percent. Thus, manpower pro-portions in pre-Communist China during various periods of peace and civil war fell in a rangebetween 0.16 percent and 0.33 percent, respectively. It is reasonable to compare this with theaverage for Communist China of 0.39 percent during 1966-1983, which includes the periods oftension and conflict with the Soviet Union and Vietnam.

The Cuban spending burden exceeds that of the Dominican Republic by almost 4.8 per-cent of GNP, whereas the Cuban manpower proportion is greater by about 1.35 percent of thepopulation. Both differences are significant statistically at an a level below 0.001. Additionaldata on Cuban spending burdens and manpower proportions during the 1950s are available invarious editions of The Statesman's Yearbook. In 1954, the Cuban spending burden was about3.1 percent of GNP; in 1957 it was 2.2 percent. The Cuban military numbered 21,000 in 1954and 1955, 22,400 in 1957 and 1958, and 33,400 in 1959 and 1960. These represented manpowerproportions of about 0.35 percent until 1959, when the proportion rose to 0.5 percent.44

With respect to spending burden, the Communist figures exceed those of the non-Communist states in all seven cases. For manpower proportion, the Communist figures aregreater in six of the seven pairings; the exception is South Vietnam. Moreover, the availabledata indicate that manpower proportion grew in China, and both spending burden and man-power proportion in Cuba, after the nations became Communist.

Table 4 presents the spending burden and manpower proportion means for the tennations that changed from non-Communist to Communist (or vice versa) during our sampleperiod; the table offers ten before/after comparisons on spending burden, and eight on man-power proportion. Spending burden was higher in six of the nations under Communism, andin two under non-Communism; the remaining two changes did not differ by a statistically sig-nificant amount. Manpower proportion was higher in two nations under Communism and infour under non-Communism; no statistically significant difference was found for the remainingtwo cases. These seemingly anomalous higher levels under non-Communism appear to beidiosyncratic, due to such factors as the collapse of the Afghan army after the Soviet invasion,the end of the civil war in Cambodia, and growing hostilities between Somalia and Ethiopia.

We next turn to econometric findings on spending burden.

44A complication affects the interpretation of the data for Cuba, and perhaps also for the GDR and a few othercountries. An explicit or implicit quid pro quo for Soviet aid may be increased military activity; an example is theongoing Cuban military involvement in Angola and elsewhere in Africa. It may be more appropriate for such militaryservices provided by proxy to be counted as Soviet consumption. This would he particularly true if the resources pro-vided by the Soviets as a quid pro quo could not be transferred easily by the proxies into nonmilitary uses, that is. ifthe nonmilitary opportunity cost of the aid were very low. If the aid could be transferred easily into nonmilitary uses,but the military services were still chosen, it would be appropriate to classify the military consumption as that of theproxy nations. This study implictly makes the latter assumption.

19

Table 4

MEANS FOR SPENDING BURDEN AND MANPOWER PROPORTION.NATIONAL COMMUltNIST/NON-COMMU.ILNIST SHIFTS

(Percent)

Spending ManpowerNation Burden It Proportion 1

Communist Afghanistan 4.79 0.001 (0.42Non-Communist Afghanistan 1.88 (0.81 000

Communist Angola 8.07 (0.01

Non-Communist Angola 2.82

Communist Ethiopia 7.3 1 -0.001 o.63t 0.001Non-Communist Ethiopia 2.35 0.20

Communist Guinea .2.5 )4 0.26Non-Communist Guinea 4.65 .0.001 0(.63 0.003

Communist G;uinea-Bissau 5.56 .0.001 0.98Non-Communist Guinea-Bissau 0(.52 1.00 (a)

Communist Mozambique 2.67 ((((4Non-Communist Mozamhique 1.59

Communist Somalia 3.81 0.89Non-Communist Somalia 6.67 0.003 1.0(2 Wa

Communist Nicaragua 7.631 0.001 1.4(0 0(.01Non-Communist Nicaragua 1.96 0.32

Communist Cambodia 11.00) 0.73Non-Communist Cambodia 11.16 (a) 1.96 0.002

Communist Laos 10(.70 1.37Non-Communist Laos 11.00 (a) 2.25 - 0.001

'Insign if icant.

V. ECONOMETRIC ANALYSIS OF SPENDING BURDENS

The simple comparisons of statistical means under Communism and non-Communism inthe preceding section, while interesting and suggestive, cannot be conclusive because they failto control for other important influences on the relative tendencies of nations to emphasizetheir military dimensions. Hence, an econometric approach is required, so that we can isolatethe effects of Communism per se. The dependent variable analyzed in this section is spendingburden, that is, military spending as a proportion of GNP. (Manpower proportion is analyzedin the next section.) Both terms in this ratio are measured in national currencies in order toavoid complications introduced by dollar conversions and exchange rate fluctuations. Theright-hand variables used in the econometric equations are as follows.

For purposes of sensitivity analysis, the first variable is the manpower proportion. In ourdata set, the simple correlation between spending burden and manpower proportion is 0.64;this is not surprising since higher spending is likely to lead to higher manpower levels, andhigher manpower levels are likely to lead to higher spending. Moreover, spending, purely as amatter of definition, comprises units of military inputs, of which manpower obviously is impor-tant. Thus, inclusion of the manpower proportion as a regressor reflects the definition of mili-tary spending rather than its causation. Since we are interested in the latter, we prefer on apriori grounds specifications excluding manpower proportion. However, some specificationsinclude it in order to examine the effect on the Communism coefficient; when included, a posi-tive coefficient is expected.

The second variable takes a value of 1 for years in which the given nation is Communist,and 0 otherwise. This is the variable that should allow us to isolate the tendency of Commu-nist states to emphasize their military dimensions. The null hypothesis is that the coefficienton this variable does not differ from zero by a statistically significant amount; the alternativehypothesis is that it exceeds zero by a statistically significant amount.

The third variable takes the value 1 for years in which significant guerrilla and/or terror-ist activity is present in the nation under observation as reported in a recent survey of majorarmed conflict; otherwise, the value of the variable is 0. 5 It is reasonable to assume that guer-rilla or terrorist activity would lead decisionmakers to opt for a larger military sector, otherthings equal, so that this variable is expected to carry a positive coefficient.46

Fourth, we include a variable measuring external threats. The behavioral hypothesis isthat decisions on military spending (burden) respond to neighboring threats as represented byspending (burden) undertaken by neighbors. Since a threat can be posed not only by neigh-bors' spending but also by their manpower levels (or proportions), or more generally by theirorders of battle, an alternative variable is the sum of neighbors' spending burdens and theirmanpower proportions. Because perceived threats are affected by the absolute size of neigh-bors, and possibly as well by the proportion of total borders shared with the threatening neigh-bor in question, the threatening spending burden (or summed spending burden and manpowerproportion) is weighted twice: first by the ratio of the neighbor's population to that of the

45See G. D. Kaye, D. A. Grant, and E. J. Emond, Major Armed Conflict: A Compendium of Interstate and IntrastateConflict, 1720 to 1985, Canada Department of National Defense, 1985.

46One potential problem is presented by the likely nonlinear relationship between guerrilla activity and militaryspending: the marginal response to guerrilla warfare is likely to grow as the problem worsens. The dummy variable inour econometric analysis can capture this nonlinear effect only crudely.

20

21

given nation, and, second, by the proportion of the given nation's total borders shared with theneighbor in question. 7 Most of the analysis in this section employs the weighted spending bur-den of neighbors as the measure of external threat, but sensitivity analysis is performed withthe summed threat variable.

An example may be useful here. Suppose that nation A shares 60 percent of its totalborders with nation x, and 40 percent with nation y. Suppose also that the spending burden ofnation x is 10 percent, and that of nation y is 7 percent. Suppose as well that the populationof nation x is twice that of nation A, while the population of nation y is 1.4 times that ofnation A. The threat to nation A is computed as follows: 48

(0.60)(2.0)(10.0) -- (0.40)(1.4)(7.0) = 15.92

Some adjustments to this variable were made in the interest of greater realism; for exam-ple, the threat posed by Belgium to France was ignored, while that posed by the Soviet Unionwas included despite the absence of a French/Soviet border.49 Obviously, we expect the threatvariable to carry a positive coefficient.

The fifth variable measures the given nation's population as a proportion of the totalpopulation of whatever alliance the nation is a member. If the nation is not a member of analliance, then it is, in effect, in an alliance with itself, so that this variable would take thevalue 1. The variable is intended to capture the efforts of nations to obtain free rides on thedefense efforts of others; as a nation grows larger relative to the alliance as a whole, the collec-tive costs of such efforts to obtain free rides increasingly are borne by the nation itself. There-fore, this variable should carry a positive coefficient, since the opportunity and effort to obtaina free ride should diminish as the nation grows larger. 50

The sixth variable is intended to control for the inherent "type" of the regime. A surro-gate measure is the Freedom House ranking of political democracy and personal liberty.5' Thehypothesis is that a greater degree of freedom or democratization should be associated with lessdevelopment of military dimensions. Since the Freedom House rankings rise as the level offreedom falls-for example, the Soviet Union receives a higher ranking than the UnitedStates-the expectation is for this variable to carry a positive coefficient. In the discussionbelow, this variable is called the "freedom" variable as a means of reflecting the fact that it is asubjective judgment of Freedom House. Since the ranking varies inversely with the level offreedom, the variable perhaps should be thought of as a "dictatorship" or "anti-freedom" vari-able.

The seventh variable takes the value 1 for years in which the given nation was engaged insignificant external hostilities or war as reported in Major Armed Conflict; otherwise, the vari-able takes the value 0.52 This "war" dummy variable should carry a positive coefficient.

"In "The Effects of Defense and Security on Capital Formation in Africa: An Empirical Investigation," unpub-lished draft, Daniel Kohler uses a similar threat variable, but only the border proportion is employed as a weight. Thispresents a possible problem in that a small neighbor, while perhaps spending a large part of its GNP on defense,nonetheless might pose a small threat because of its small absolute size.

"'In symbols, the threat variable for a country j bordered by countries i is defined as:

tj - (pop,/pop,) (border, /border,) (Y , i j9 The derivation of the threat variables is described in App. B."'See Mancur Olson, Jr., and Richard Zeckhauser, "An Economic Theory of Alliances," Reuiew of Economics and

Statistics, August 1966.51See the annual editions of Freedom in the World: Political Rights and Civil Liberties, New York: Freedom House.

See also Freedom at Issue, January-February 1987.2G D. Kave et al., fn. 45 above.

22

The eighth variable takes the value 1 for nations that use conscription for the acquisitionof manpower, as reported in the annual editions of The Military Balance.53 Otherwise, the vari-able takes the value 0. Conscription is included as a regressor because it may affect perceivedlabor costs, and thus the amount of labor employed and perhaps total spending. The sign ofthe coefficient is indeterminate because conscription could lead to greater spending on militarymanpower if the demand for such manpower is relatively elastic or if training and other costsrise; if it is inelastic, spending could decrease.

Regional dummy variables are included for Europe, Africa, Asia, Latin America, NorthAmerica, and the Middle East, as a crude control for regional peculiarities not captured by theother explanatory variables.

Finally, the effect of per capita GNP as a regressor is examined at the end of this section.

ORDINARY LEAST SQUARES ANALYSIS OF A SIMPLIFIED MODEL

Before turning to the results of the full econometric model, it is useful for two reasons toconsider the evidence provided by a simplified econometric model. First, the coefficient on thethreat variable is insignificant when manpower proportion is excluded, but carries a negativeand thus implausible sign. Thus, it is clear that our threat variable, at least in the spendingburden equations, is not capturing the intended effect. Second, the "freedom" proxy for regimetype is a subjective ordinal measure of Freedom House; this may present a problem for theordinary least squares (OLS) estimator if the "true" but unobservable variable for regime typediffers nonlinearly, from our freedom proxy, and if the difference is correlated with the otherregressors. In short, our simplified model drops the threat variable, and substitutes for thefreedom variable a dummy variable for democracies and another for undemocratic but non-Communist regimes.

Table 5 gives these f'ndings for spending burden, estimated cross-sectionally for 1973through 1983. The Communism coefficient carries a positive sign, is significant in 10 of theeleven years, and is marginally significant in the eleventh. If we delete the largest and thesmallest of the coefficients, the results suggest that Communism induces an increase in spend-ing burden of 3.4 to 5 percent of GNP, ceteris paribus. As discussed below, this finding is con-sistent with those provided by the full econometric model.

ANALYSIS OF SPENDING BURDEN WITH THE OLS ESTIMATOR ANDPOOLED CROSS-SECTIONAL AND TIME-SERIES DATA

Table 6 presents the results of OLS regressions of spending burden on the right-handvariables discussed above. The data are for the 89 nations listed in Sec. III for the years 1966through 1983. The manpower proportion is highly significant; the estimated coefficient sug-gests that an increase in the manpower proportion of 1 percent of population results in anincrease in spending burden of about 2.5 to 4 percent of GNP. As noted above, however, thespecifications excluding manpower proportion are preferred on a priori grounds.

The coefficient of the Communism dummy variable is significant at a significance levelbelow 0.001; it suggests that Communist systems tend to spend about 1 to 3.5 percent of GNPmore on the military than do non-Communist systems, ceteris paribus. The coefficient fallsupon deletion of the regional dummy variables; this is likely to be due to the effect of the Mid-dle East in the sample, since that region is both non-Communist and heavily militarized.

3See, for example, The Military Balance. 1985-1986, London: International Institute for Strategic Studies.

23

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25

The coefficient of the threat variable has an implausible negative sign, and is significant.This is discussed further below. The guerrilla dummy variable is significant, and its coefficientsuggests that guerrilla activity induces an increase in spending burden of about 3/4 of 1 per-cent of GNP. 54 The alliance proportion has the expected positive sign and is significant. Thefreedom variable carries an unexpected negative coefficient (unless the alliance proportion andregional dummies are deleted), and is significant if the regional dummy variables are includedin the specifications. The dummy variable for wartime is highly significant, and suggests thatwar induces an increase in spending burden of 3 or 4 percent of GNP. 55 The coefficient on theconscription dummy variable is positive and significant when the regional dummy variables areincluded. The positive sign may indicate elastic demand for manpower, or the adverse effectsof higher turnover and training costs and the like. On the other hand, it may indicate insteadthe p , -ence of some simultaneity in that nations which opt for large spending burdens alsochoose to conscript out of a perceived need for a larger military sector. For the purposes ofthis empirical analysis, conscription is treated as a predetermined variable: most nations con-script in a given year because they did so the previous year.

Tne most interesting, although expected, finding for the regional dummy variables is thecoefficient for the Middle East. It is always positive and significant. As noted above, thisexplains the consistent decrease in the Communism coefficient upon deletion of the regionaldummy variables.

The data set is most complete for the years 1973 through 1983. Accordingly, Table 7presents results of OLS regressions estimated with the pooled data for the 89 nations duringthis time period. The coefficient on the manpower proportion variable tends to rise slightlyduring the latter period. The threat coefficient again is negative and significant. The allianceproportion variable is positive and significant, whereas the coefficient on the war dummy vari-able falls slightly. All other results are consistent between the two sets of regressions. Theadjusted R2 in Tables 6 and 7 never falls below 0.812 in the specifications including theregional dummy variables.

As noted above, it is reasonable on a priori grounds to exclude manpower proportion.Table 8 presents the results of regressions estimated with pooled data and excluding the man-power proportion as a regressor. Specification (1) was estimated with pooled data from 1966through 1983, while the other equation was estimated with pooled data from 1973 through1983. The main effect of excluding the manpower proportion is an increase in the magnitudeof the Communism coefficient; the regressions suggest that Communist systems opt for higherspending burdens by over 4 percent of GNP, ceteris paribus. As noted above, specificationsexcluding manpower proportion are preferred, because we are interested in the determinants orcausation of military spending rather than its components or definition. Adjusted R2 is a bitover 0.77.

"11t may be reasonable to assume that the effect of guerrilla activity on military spending is nonlinear, since some

"threshold level of internal insurrection may be required to induce a spending response. Thus, our dummy variablemay approximate this true relationship only crudely.

-' 'The effect of war, like guerrilla activity, reasonably may be assumed to be nonlinear; again, the dummy variablewould approximate this effect only crudely.

26

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CC--c:)

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00

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27

Table 8

OLS ANALYSIS OF SPENDING BURDEN, POOLED DATA

[Estimated coefficients (t-statistics)]

Variable Eq. (1) Eq. (2)

Manpower

proport ion

Cor nmunism 4.61 4.27

(13.26) (11.34)

Threat -. 010 -. 007

(-4.74) (-2.83)

Guerrillas .872 .910(3.27) (3.28)

Alliance .018 1.38proportion (5.02) (3.22)

Freedom -. 292 -. 322

(-3.77) (-3.73)

War 4.18 3.45

(9.79) (7.30)

Conscription 2.04 1.81

(7.69) (6.45)

Europe .936 1.33

(2.72) (3.41)

Africa .744 1.58

(1.27) (2.36)

Asia 4.25 4.16

(8.65) (7.38)

Latin -.205 .433America (-0.37) (0.68)

North 3.63 5.08America (4.34) (5.10)

Middle 11.80 12.76East (17.18) (16.98)

Constant

Adj. R2 .772 .775

NOTE: Equation (1) was estimated withpooled cross-sectional and time-series datafrom 1966-1983; Eq. (2), from 1973-1983.

28

ANALYSIS OF SPENDING BURDEN WITH THE OLS ESTIMATOR ANDCROSS-SECTIONAL DATA, 1973 THROUGH 1983

When the data include time series for given nations, the estimated coefficients reflectboth short-run and long-run effects of the variables determining spending burden choices.While it is possible that an 18-year (1966-1983) or even an 11-year (1973-1983) time seriesmight capture a full adjustment to long-run exogenous conditions, estimation of the modelswith cross-sectional data only is reasonable on a priori grounds: a cross-sectional "snapshot"can be interpreted as reflecting long-run adjustments. Thus, cross-sectional analysis shouldfacilitate estimation of the separate long-run effects of the exogenous variables without theambiguity introduced by the use of time-series data also. Accordingly, Table 9 presents resultsof cross-sectional regressions of spending burden on the right-hand variables described earlier;the equations are estimated with data from the 89 nations for each individual year from 1973through 1983.

The estimated coefficient for manpower proportion is significant for all years; the coeffi-cients suggest that an increase in th( manpower proportion of I percent of popul..' n -esultsin an increase in spending burden of about 2 or :3 percent of GNP. The Communist, coeffi-cient is significant in all years except 1977. (It is marginally significant in 1979.) The coeffi-cients suggest that Communist systems tend to display military spending burdens about 2 to3.5 percent of GNP higher than do non-Communist systems. This is consistent with the find-ings shown in Tables 6 and 7.

The threat variable is significant except in 1980 and 1981, and is marginally significant in1978. 1982, and 198:3. However, it still carries a negative sign. (This is discussed furtherbelow.) The guerrilla activity coefficient has t xpected positive sign, but is significant onlyin 1977. 1979, and 1981. It is marginally .sigi ant in 1980 and perhaps also in 1973 and1978. The coefficients suggest tas a linear approximation) that such internal hostilities lead toan increase in spending burden of somewhat over I percent of GNP. The alliance proportiongenerally is significant also; the coefficients suggest that an increase of 10 percent in the pro-portion of alliance population leads to an increase in spending burden of about 0.25 to 0.4 per-cent of GNP.

The freedom proxy for regime type is significant in 1980 and marginally so in six otheryears, but carries a negative sign. This is unexpected, but not implausible; it is discussedfurther below. The coefficient on the war dummy variable is significant in seven of the elevenyears: again, this coefficient may be a linear approximation of a more complex relationship.The significant coefficients suggest that war leads to an increase in spending burden of about 4to 6 percent of GNP; this seems to be a reasonable finding. The conscription dummy variableis significant (or marginally so) in five of the eleven years; the significant coefficients suggestthat conscription leads to (or perhaps that nations employing conscription also opt for) anincreased spending burden of between I and 2 percent of GNP. Finally, the Middle Eastdummy coefficient is significant (and "large") except for 1980 through 1982. In these cross-sectional regressions, adjusted R- lies between 0.780 and 0.914.

Again, we are interested in causation rather than definition. Accordingly, Table 10 showsthe annual cross-sections with manpower proportion excluded. As expected, the Communismcoefficient rises and becomes more highly significant; if the high and low estimates are ignored,it suggests that Communism induces an increase in spending burden of between 3.4 and 5 per-cent of GNP. The threat coefficient continues to carry a negative sign, but is insignificant inall years. The alliance proportion is significant or marginally so in some years and insignifi-cant in others, but the expected sign is displayed in all years except 1978. The freedom

29

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rO "- Er wC' 01D 0 00. w'C (v,- mc- F0 w-- 04 00 O(' t0E>m 0 0 c : I 3 ,-4 -.- c-C 10 :3 -4.-' 0) m'I <' ' 0n-' 0o .'0

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coefficient again carries a negative coefficient, and is significant or marginally significant in sixof the eleven years. The wartime dummy carries the expected positive coefficient in all years,is significant in four of the years, and is marginally so in at least one other. The significantcoefficients suggest a spending burden effect of war of about 5.5 to 8 percent of GNP, again areasonable finding. The conscription coefficient is positive in all years, and is significant ormarginally significant in seven of them. Finally, the Middle East dummy variable is signifi-cant and large in all years. With the manpower proportion excluded from the annual cross-sections, adjusted R2 lies between 0.714 and 0.868.

Tables 10 through 17 present the results of sensitivity analysis conducted by excludingeach of the regressors from successive sets of annual cross-sectional regressions. Table 18summarizes the findings for the Communism coefficient obtained through exclusion of each ofthe other regressors in Tables 10 through 17. The most important finding is the expecteddecrease in the importance of the Communism variable caused by exclusion of the regionaldummy variables. With the regional dummy variables included, the Communism coefficient ishighest and most significant in the specifications excluding manpower proportion (Table 10).It is lowest and least significant in the specifications excluding the freedom proxy for regimetype (Table 14). With that specification, the Communism coefficient is significant in six of theeleven years, and is marginally significant in two others. Excluding the highest and the lowestof these eight significant coefficients, the results in Table 14 suggest that Communism leads toan increase in spending burden of between 1.5 and 2.4 percent of GNP. Exclusion of the man-power proportion (Table 10) yields a range of 3.4 to 5 percent of GNP. With the manpowerproportion and all other regressors included (Table 9), the range is 2 to 3.5 percent of GNP.These results suggest that as a reasonable and conservative estimate, Communist systemsdisplay higher spending burdens than do non-Communist systems by about 3 percent of GNP,other things equal.

ESTIMATION OF THE MODEL EXCLUDING THE LEAST RELIABLE DATA

It was noted in Sec. IV that the data for Bulgaria, North Korea, Cambodia, Laos, andVietnam are likely to be the least reliable in the sample. This relative unreliability stems not

from obvious bias, but from evident availability of substantially less information upon whichthe various estimates were based. Hence, Table 19 presents annual cross-sections with thesefive nations excluded from the sample. Manpower proportion is excluded on a priori grounds;

a comparison of the estimates with those of Table 10 reveals that exclusion of these five coun-tries does not affect the results. In particular, the Communism coefficient tends to fallslightly, but does not differ from those in Table 10 as a matter of statistical significance.

EXCLUSION OF THE MIDDLE EAST FROM THE SAMPLE

As discussed above, the Middle East dummy variable has an important effect in the

estimated equations because the Middle East is both non-Communist and heavily militarized.Exclusion of the Middle Eastern nations from the sample is a convenient way to see if theMiddle East dummy variable is a reasonable method of controlling for the peculiarities of theregion. Accordingly, Table 20 presents findings from regressions estimated with pooled datafor 82 non-Middle East nations, both for 1966 through 1983 and 1973 through 1983. Theresults are consistent with those discussed above. The Communism coefficient is highly

32

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co C C O.I O r- n 0 1 4 0-4 r-W in CH wSJ <

O - nN r- Cr-4 1 0 -~- - I - M iCJ 10 C~,4 ,4 0 C-4C 0 l C;0

Cn r, - COO cn ,L

r- m A n , - -- in.- 4 -. r-- 'D - -i n -r - o

o4 1- 1-1 r I C14 C14 1 1-4 Un d 0-4l-4 1 0-40 -4 0 ~C4

-. oa -zr- 0 U 0 t-4 cj r- m 04. T %DW CN~i M m - c) Ln col0 ac'JW r--4r- 60 a-A oW o oL om n N -coc 0 0 LIO a r- U) OW %D Dr- a o C

I *C I I I C ; C C

CD 0 w' -4! c 4) CJ1 iWnO ~ x cJ- 'ar- - c 00 0, U-) OD 0 0 mj ino ~ mm rr-o qn L

r- 1- aN 0 0 U' r-.m 0 0 0 iN W n0 l0 - ( o 1- y -1 --0 Wo

-* Nn m4. . 0 i 0 0 10-40 C' -40 0\

a. - rj- LA-. d20. - (v 0). Ln.. - -. .UA ) i Cn O e 0, Ne' m (4-T ( O eiN c Wr, r- r- .WO r 0

m. c- N0 0~. -T r-r- O r- iCl'Jq c LO 00o L cr- coo - r -Ln r-imn 0

-4 in'C' C'J 0 C J cry-) 0 14 0 o 10 4 r,40 0iC12 -. ID m co 'T In c

zn NJ ON M . ~ m N- ~ 0Na1, 0 0 N r-1 NW C'

r, LO r- 0N W 0l co U-)0 coW~ W

I- Il f IY -; In

00)

r- 0~ C:L ON Ci 0 0n- "A (Dn (o m- inii.l O

.-4 Qni 0 -i p 'A 0H in 10 0~ 0 0- 4 in f-4 0) ., )

> o - 04 -40 : 14U-(4 w 0 '-4 I-4j. II)-4 u 0 w < KcIII x

38

OD* U1-) NU-) I . 0 - 0N 'ID co m N M 0j"

I ~ - )

Nc C!) NN Oc )I 00 0 T N (N 0- W) 0 C* '0

0~~~ 0n 10 0a (1 LO N -- ON -

0)

-4 (1 r--4 m -4C 0 (1 0 0 m c) -4

II

r-I co r- 0 0 ID cIf oa

o .n

0 (10-4- n 1 0- 0 10 ( 1Nm % 0 Il 0O

0- N r- N -4 (1nD0 C4N ~0 r- OW 4.-I H0 0Nc

OC- 000 n li 0 Wn ON 0(D 4- (O 00) a% -

-o m4 I o I

Z - -iN 00 00 1 ) 0n1 0 O,- r ' WO Na) W-0 ON

- ko 1' 0 1' N4 1 0 a)n 0 C(1 -iN N

-- -i oD c, r,~ 00 r-- 00 Our- O ) Ua)

0) "- 1 0 -4- IC . (1) 0 0 . 4 N' N

MOLA 0 N 0 W m 0 0 WOM O

LOW 0(

H ~ O 1 N ~I0 0 N

zr 0- - 4 C 0 0 4 D (0m L

I' . 0 0 (al QW 1 r-r 04 ,4 0 4 -Ar- r- a) 0 14 L) 'A 0 4) oi~ 0 r-W Ll 4Ja)'0 v

>- 10 (.0 3 -1 01 0H 0 0 (1-4 o ( < 0

(1 uO E1- 0 9c Er- ON 0( (1 Nw LI)4 u 4

39

m~ 00 -0 0 U) dr- ,o om

CC-a4 Cf~ Um ) o X r-m co~- ~ CJ U-)

co c0 0d n n- 7 ~ rm C C P

04 Lnr Im coo No o Io~ co

N -l - - -. 1~f

W C 0d ur- o o r- o LO o r- coc mo

-D -4 C. -

z r- iN om n m om N C 0) -m 0 0

CD EC

N Z Do Ln r- ~ rot-i co 0

c - C! .!

-1 Mm m 0 C).- - - 00 -4-4 .- f- ~-4 1-4

m .-c llc4 c I C;

o -I~-- - ~ . -

in mo F--N inN 00 cqi C 'OnN- inm mm LO1 nm co m ni C-i CO zr co04 1 4

mm i mm mm mm0s-s -n -m 1

C ON 0 40 Ci O mm) mm r- i mm C

a%) C C u 1 o1Ln mm mm mm m mm

v)

C: 0

w E)

mj -a 0 0 mim wr (0s m4 u~4 o .sN .O N a)i co n C m n '4

zC 4 (

044 -

>) 44J- ~ ~ )0 U

40

0D o1 C I~ I- I( AL or- c-r 0 .- 4 -T1

,-4 r- ' -4 0o m 0 r,4 .4 .,- -40~ a, 0 LC' ~00 - I M ,r In - O N~ co -o r-'-

O n 0-L o1 1 0Lf (1( CN 0 LAL4 1-4 cL C'1- tO r-l

0'',

COD< -CD Lo '-4 -o -4 0j O'. - r-~ -4 -m C\J- 0 r-_ C ( (D

- -T m I C - 0 - 4 -4- - -0 LO

CDD

-4 0( 0 m 4 0o m N -4 C'c4o- -44 C..4 (~4 0 L,4 C(C 0 0 IV r- I -4 - -~ 0) m -LOm - LO LO

r- --D LA- 0-D -M0 C-0 co" "D - C ,

C-- CD 0 C- 0o 0 1 17 CD 0-) C'oC (1 7m Vc0 L (n 00( in L M 'L ON r C--

0 - C'C' I 4 4 I - I '- LD I 4- (N C 'J- C '1- 0 C4 04

r- CXD- - C- ~-W- . - m~ co U) o ~ C

I, CDC-W O D (1-4 OC:> L1 1-4 0 C1-4 '-40 Lm-4 C-C- LAO U-)- 1 L C-

S r- - 0-4 LDC 0m 0C -4L oDA w( N'- OCD CDL r1C (17 o - r nco

o -4l N1( 10 0 0 I-.L~-4 C-1C- CYe- L C\41 C'.- LA,-

I ON

cw 1-4 1 'C .4'- O V' LL CDO C -- C C C4 I C LAO OL C

-W - (1L I n 0 D - 'C)- or - 0 -4C' CL,4 (.4 '' -,H L,4 L

- O (1(1 '0' -cl- -44 H I- C'1C' C-4 m4 0 aC' 10 0'4 LD

r-A r r- (No- o% - oA- c) 1 -n c n o -r o(-. (n 0 O co c

C C r CC01' --1 C C;L C 1 C

C:0

C- -1 ~ -AC' U~ (\J' (-1 (1 LD '4 -C D 11 -

(a4 C 4 (0 '-4 ' 0 0CC 0 10 ('10 LN 4 -4L

o 1 LA- (vD OL (1 0 0 LC ( 0 (D(C' ( ~-1 a) CC'(a E-r O4 (vr HC L 40 CLA CDL CD4 E'- wDD OA ,4D

>4 (C- 0 -4 :I 0 ::3 -4.- 0) 10 C -4 4 '0 0 "o- I -4I I

41

significant in all four specifications; it rises substantially upon exclusion of the manpower pro-portion, lying in the range of about 3.5 to 4 percent of GNP. This is consistent with our ear-lier findings. These results suggest that the linear approximation of the effect of the MiddleEast, through use of the dummy variable, is a reasonable way to control for that effect.

These findings are confirmed by Tsbles 21 and 22, which give the results of cross-sectional regressions excluding the Middle Eastern observations, with the manpower proportionincluded and excluded, respectively. Even with the manpower proportion included, the Com-munism coefficient is significant in eight of the eleven years, and is marginally significant intwo others. Both the size and the significance of the Communism coefficient rise upon exclu-sion of the manpower proportion. Moreover, the magnitude of the Communism coefficient isabout the same as in Tables 9 and 10, where the Middle East nations and dummy variablewere included in the sample and specifications.

THE THREAT VARIABLE

The most troubling aspect of the empirical findings is the negative coefficient on thethreat variable. The finding is obviously implausible. It is reasonable to hypothesize that per-ceived threats combine considerations of the proximity, the capability, and the hostility or bel-licosity of potential enemies. Our threat variable measures proximity crudely (with the borderproportion), and capability directly with the foreign spending burden weighted by the popula-tion ratio. Hostility is included in the variable in a rather crude and ad hoc fashion: asdescribed in App. B, judgments were made about the realism of threats from neighbors andnonneighbors alike. Thus, for example, the "threat" posed by Belgium to France was ignored,but a parameter for the threat posed to France by the Soviet Union was included despite thefact that they do not share a border. The crudeness of the threat variable may account for theimplausible coefficient. Another possibility is that the wartime dummy variable is capturingthe effect of external threats, leaving the threat variable as a proxy for some other, althoughunknown, effect.56

Accordingly, Table 23 presents specifications excluding the wartime dummy variable,estimated with pooled data from the 89 nations for the two time periods. The threat variableretains its negative coefficient, and is significant. Table 15 cross-sections with the wartimedummy variable excluded; again, the threat variable has a negative coefficient, which is signifi-cant or marginally significant in nine of the eleven years. Table 24 repeats the cross-sectionsexcluding both the wartime variable and the manpower proportion. The negative coefficientremains, but is at most only marginally significant in several of the years.

It is possible that the regional dummy variables are capturing some of the effects of per-ceived threats. However, the threat variable retains the negative coefficient in Table 17, inwhich the regional dummy variables are excluded.

Another possibility is that external threats are perceived not as just the weighted sum ofneighboring spending burdens, but as the sum of the weighted sums of neighboring spendingburdens and manpower proportions. This sum of weighted threats may be a better proxy forperceived force structure threats.7 Table 25 presents findings from pooled regressions which

,'However, it would he curious if this were the case, since external threats ought to arise before the outbreak of warand linger beyond the cessation of hostilities.

However, the simple correlation between the old and new threat variables is 0.997. Moreover, the numbers them-selves are close in magnitude because the measured spending threat is much larger than the measured manpowerthreat; simply adding the latter to the former yields a sum that is not very different from the original threat variable.

42

Table 20OLS ANALYSIS OF SPENDING BURDEN, POOLED DATA, MIDDLE EAST OBSERVATIONS EXCLUDED

[Estimated coefficients (t-statistics)]

Variable Eq. (1) Eq. (2) Eq. (3) Eq. (4)

Manpower 2.60 2.66proportion (15.81) (16.38)

Corrnmunism 3.28 2.58 4.01 3.56(12.24) (9.77) (13.67) (11.98)

Threat -. 013 -.010 -. 011 -.009(-7.73) (-6.21) (-6.19) (-4.27)

Guerrillas .834 .845 .335 .298(3.92) (4.24) (1.45) (1.32)

Alliance .032 .029 .020 .016proportion (11.40) (9.64) (6.53) (4.72)

Freedom -.362 -.268 -.116 -.085(-5.86) (-4.33) (-1.74) (-1.20)

War 4.57 4.56 6.06 5.88(12.34) (11.95) (15.08) (13.55)

Conscription 1.15 .864 1.78 1.52(5.43) (4.32) (7.75) (6.69)

Europe -. 889 -.767 .738 .994(-3.19) (-2.72) (2.58) (3.29)

Africa -.265 -. 150 -.105 .349(-0.60) (-0.33) (-0.21) (0.67)

Asia 1.64 .814 .365 3.35(4.20) (1.98) (8.91) (7.61)

Latin -2.12 -1.87 -.603 -.183America (-5.06) (-3.74) (-1.55) (-0.19)

North -.306 1.79 2.72 4.55America (0.48) (2.64) (3.92) (5.96)

MiddleEast

Constant

Adj. R2 .817 .826 .767 .763

NOTE: Equations (1) and (3) were estimated with pooleddata from 1966-1983; Eqs. (2) and (4) from 1973-1983.

43

CO~ Nc LO -A oo) CD -O oy Dr- m -) o co' 0-A LO(N 0o m N CQ co 1 00 0c0D M CO C C C) 0 0 (D - NO m O U) Q (N- ~r 0 w -0 C> zrC4 mC) c

m~ . . 1. -. - - - --NA ~ ' 0'. U-) (n) <NDf CD- q'.- I.- 'Cr Z-i> I(' <D 1:"

0 ~ C 4f) 00 O) uy)) 0a4 0"> U.4 o- ~'O~ - 0 '.C Nu

.,r (NX> r-( kD --4 0 -i m -,Q zr (N(N Ln I ) -Hco -) CI OD m D m N I- al

m4 . . --- . 0- .- ( .- r- .--- .r' .~. .\'. . .N ' .0 fN --.- Lf 0 0i LC)~ C N N L)- , 4 ' > L)'

-4 ~ ~ L (NC mNNNd) -4( 4 IoX -i 0 - 0 r4) IC N-

- -A I N -A I o '- - C) C>~

CD 0 - 00Lf CDC' C> c') (4 0-4 C 0 >YC C12 .-- ( 1)0 m C' (ND C 0D r o jcc -oX (NC' 10 mN (D r- 0rD <z: A m c 0 _j Cj ) (N o r-~ 3, N

HN L l I I: INO ' z "

-; q.0 >n .- ', cc) (NO m Lo4 c)0 (0 N C:) Lr o

r- 1-r C1 )0 C Ut-) c~ 00 M ~ f (Y) ( -IT 0o.-14 In L'0 '(,A LO~ 000

H~ ~ LO ,I,,) -4:-- C-4 I'.-- C', I - 'D - ) I N

r - IY r- r- c: cc - 00 I

0- r-I() C CD 01-i ( DN (N m N -4 zr .- 1 'D-T4 -40 ( 00 N(7).- :3, D-4 0,NC- r(Y (y 400 ODX) r - CN Or) NU -4 -C ')U coLC I-f N( i))0 -qk 0D - D . 4

-4 'IX -4-I -4 .-- (N I - ')~' 0C0 -40 C-I

H r- C c 00I .- C' o C) (NO (NO a)~- Uo') q ) W CD q ()O C (D -r-

C-- cc:))) >0 0((>4 O) (N.H, 00 :1 >( , 40 0- 0-0N 0-Ar- 00C '0o C rC

u.., ir -4 > ) (N C-4 (N ) ,-D CD-40- r-- -A 0 D r-- r-4-A C>- IV Il C> I ( I I

Z - 4 (N 040 >0 040 .- I0 I )-A ) .- I0 *) ), 00, 0U

0 nA ,:)- CNr- r C'DU .(y) I -4 C')N ko - C ) (Y) q -- C-H O-4 . -00 (N( N-0 T 11 c o I

(N~~~ ~ ~ 'I (Y I Nc)C* DC

0 V

-~ 4J (N ff) -- A (X) 4') M >400 4-I(N 0 0 0 )X) 0

C: 0 00 400 (1) (13 0> (NO (N > 0 0 'H >

--4 0N a)( I -(N. ' - > 0 r H 0 C( u0(f

(a) QC: -4E 1 4 wC - 4 '

> (L' X) 0 -NC' a( wX O- 0 >0 400U)0 -4W 0~~j) K ( ~ 0 4 0 40 UN( ulC' <( C'C' z0 4 xH u0

44

N- . W 0. - ... -. .4 .~ 0 .. . -

NU) L 1; 10 0 - N 0 CJ 0-40 0 C-) N

N~ LC .- ;O O '~~4C~l' 0 c" No- NO N .- N0 o O1 CQ o CN ON C 00 u C 0r

I' IH 10 I c 4 1* C'c- 0; 0 1N 0 4flNI I

1i I 04 -4 0 0 0 n .-4 .-- 4 N- mi 0 -4 U l

0m "-.) cL--. o iz

00r

ZO)o- '.0 - .-- cfl- -o "r- ~ - -

r- "o0 04 .0 0 N-4 ON c '0 C! .-7O c n ON m 04 0 0

-4 zC. 15 m H 0 0 0 N w' m -4- 0 (i- 0

co r- -IT - ,

'i.Du) - 0o. v -o - -D -.j -. c-% 40oM'N O W O O

N I0 04. oH 00 NO c~0 N~ 00 (i 40 (

c)) 'o o, Nnrl I

mZ o rio i ) I 400'I o U)c N (i- _4 0 ;r -,r m D c'(n2 I* o - ' I NI C n cj I ; -

Nz 4.o) 0,- r- Or) H) NN U1'0 00 0 4 0co.4 .

H -I' 4 10 .- 'AN -4- 'A.- 40C- -40 41C

m4-0 ( nNi'! NC' -4 0 mi OC') N-4 m 0 NN (n 00 40D co

Nlj NN ONl 0i' w- ON oA' N''0 00 OL . i 4 0

0 . r

:3: i 0 c H r0 0 0 '.4' .4 0(I i - 0 L--

(a 0r.! ON Q) NA N-4 W .0 (IN c .4. w O NOw -4 40.E

>4 (1 ~ '4 0 N 03 LOC' 0-4- 10 0 A4 N) Nm < 00-u C. z~-- - -

45

Table 23

OLS ANALYSIS OF SPENDING BURDEN, POOLED DATA, WAR DELETED

[Estimated coefficients (t-statistics)]

Variable Eq. (1) Eq. (2) Eq. (3) Eq. (4)

Manpower 2.89 2.83

proportion (18.37) (17.29)

Commnunism 2.93 2.37 4.27 4.04

(9.01) (6.79) (11.83) (10.44)

Threat -.015 -.013 -.012 -.009

(-7.45) (-5.62) (-5.34) (-3.27)

Guerrillas .794 .881 .862 .954

(3.22) (3.54) (3.09) (3.33)

Alliance .034 .029 .021 .016proportion (10.02) (7.56) (5.52) (3.65)

Freedom -.323 -.247 -. 197 -.249

(-4.59) (-3.24) (-2.46) (-2.81)

War

Conscription 1.47 1.12 2.37 1.99(5.93) (4.43) (8.61) (6.88)

Europe -1.24 -.861 .635 1.19

(-3.77) (-2.37) (1.77) (2.97)

Africa -. 560 -.165 .072 1.09

(-1.05) (-0.28) (0.12) (1.58)

Asia 1.30 .589 3.84 3.75(2.76) (1.11) (7.50) (6.47)

Latin -2.62 -2.14 -.897 -.121

America (-5.06) (-3.74) (-1.55) (-0.19)

North 1.67 2.03 5.06 5.25

America (2.17) (2.26) (5.87) (5.11)

Middle 37 6.31 12.06 13.06

East (8.37) (8.17) (16.81) (16.88)

Constant

Adj. R2 .815 .825 .751 .760

NOTE: Equations (1) and (3) were estimated with

pooled data from 1966-1983; Eqs. (2) and (4) from1973-1983.

46

-n- i- - 0- - r - t o -

co(Tc 0 .- ~ r m oc0 No mi -7 'I 01~f ,- -c o- oc D ( cc

o or inr- 0 4 .-1 C 1~r 0c' .- 0 1 C 1 n Ca'-

cI m -o 0 H 0 c) 0-- 0D r 43 o m 0 10 )0 'T r- ' co

04 ('4 Hin -I' o4 Win cl)~ O ~d WH (O

0r (,Do 04 ) ) O W n W 1--) O ") i r-- O0m

cor n o -WNc 0 cfl o m 04n W) Ln 01 m ~ r-N ) 4 0 4 N cz< i 1~ 0 4 H 0 ,4 00 1* 0(1 C;

zIII

'-4~c Cn 10 0 0 N -.- H 0~ 14 H 0I- 0(n

'I -D CI -T* M 0 ) -1> I - -'r C) I R r

0).3 c -0-. (1.- W.-. (1- 0 m q- C> r - -cr m -4D - 0 - -

.Td M -Id( 04 -n 0 w in 04.- Wm 4O w d)D a, -Idm)-T Ln T

r- . - 0 -. 0.(n - .c - -rC - L a) c - (D ('In-T C0- L'W 0r C -I( 0 c 0 w ~ WO m1- m0 cW m* 0( r-c -r!(1o O u- D c

0)n . , ' - -

' H (0 1 n co 00 c 0 I o .-1 rH- 0T -IT If)-- r-0 -40 N )- m(1D 4

IN N , I

v)CI 0> (1W L 0- c) 0n HO 0 W HO al.- 4)0 -H0m 04

0 .n

3: 0 1( 4 0 -4 C1 0 0 -4 -0 4- (1443 4.I L.1 W

~0 04 >(1 -d 13 04 u 04> wd '> Ld > o IwI 0(1 0 0- a) (1( (1 0 H( 04J ,( o C' LIW

-1(11 H - 4 -4 I) wI 00 -4-IH 0 E 10 14 E 0 > C

Q, 0 0.w0 7 1 ) I

47

substitute this new threat variable for the old one, estimated with data from the 89 nations forthe two time periods. Again, the threat variable retains its negative coefficient, which is signif-icant. Tables 26 and 27 present the results of annual cross-sections including the new threatvariable, including and excluding the manpower proportion, respectively. Again, the negativecoefficient remains, but exclusion of the manpower proportion largely reduces the coefficient toinsignificance.

The statistical correlations between the threat variables and the other regressors are notsufficiently high to explain the anomalous behavior as the result of collinear data. Thisbehavior of the threat variables remains the most troubling result of the empirical analysis, butit is likely that the wartime dummy variable captures a substantial part of perceived threats.On the other hand, the threat coefficient, although largely insignificant when the manpowerproportion is excluded, remains negative whether the wartime variable is included or excluded.It is clear that our threat variable is not capturing the intended effect, but thus far we havebeen unable to devise a better variable. In any event, our findings on the effect of Communismupon spending burden are robust with respect to substitution for or exclusion of the threat orwartime variables.

DO NON-COMMUNIST DICTATORSHIPS UNDERDEVELOPTHEIR MILITARY DIMENSIONS?

One unexpected finding is the negative coefficient on our freedom variable, which isincluded in the regressions as a measure of the inherent "type" of the various governments.The null hypothesis was that less freedom (a higher Freedom House ranking) ought to be asso-ciated with greater emphasis upon the given nation's military dimensions. Our regressions,however, have yielded a negative estimated coefficient for this variable, which often is signifi-cant. With the Communism dummy variable included in the specifications, this suggests thatnon-Communist dictatorships tend to develop their military dimensions, as reflected by spend-ing burden, more than do democracies, and that it is Communism which increases the tendencyof undemocratic regimes to overdevelop their military dimensions.

One implication of this is that exclusion of the Communism dummy variable ought toreduce the absolute magnitude of the freedom coefficient, and perhaps change its sign to posi-tive, since Communist nations receive high (i.e., "bad") rankings from Freedom House.5 8 Table28 presents the findings from regressions estimated with pooled data for the 89 nations duringthe two time periods. With the Communism variable excluded from the specifications, thefreedom variable indeed does carry a positive coefficient, which is significant when the man-power proportion is excluded from the equations. Table 29 gives cross-sections with the man-power proportion included. The freedom coefficient is positive in five of the eleven years, butis largely insignificant. Table 30 gives the same cross-section regressions, with the manpowerproportion excluded. The freedom coefficient is positive in all eleven years, but is significantin only two or three. Comparison of these findings with those in Tables 9 and 10, while farfrom conclusive, may provide some crude evidence in support of Ambassador JeaneKirkpatrick's conjecture that "authoritarian" regimes pose less of a threat than do "totali-tarian" (i.e., Communist) ones.

r"We already have seen in Table 14 that exclusion of the freedom variable reduces the magnitude and significance

of the Communism coefficient.

ILm m Immu ~ mmml( m

48

Table 25

OLS ANALYSIS OF SPENDING BURDEN, POOLED DATA, SUMMED THREATS

[Estimated coefficients (t-statistics)]

Variable Eq. (1) Eq. (2) Eq. (3) Eq. (4)

Manpower 2.66 2.73proportion (17.05) (16.71)

Communism 3.22 2.40 4.44 4.01(9.98) (6.85) (12.51) (10.24)

Summed -.012 -.010 -.010 -.007Threat (-6.85) (-4.92) (-5.12) (-2.79)

Guerrillas .692 .740 .697 .745(2.83) (2.99) (2.54) (2.62)

Alliance .032 .027 .020 .001proportion (9.66) (6.95) (5.55) (3.30)

Freedom -.380 -.280 -.269 -.277(-5.46) (-3.64) (-3.43) (-3.11)

War 3.66 3.26 4.66 4.00(9.52) (7.75) (10.80) (8.20)

Conscription 1.23 .936 2.04 1.80(4.98) (3.66) (7.40) (6.18)

Europe -.834 -.642 .908 1.24(-2.57) (-1.77) (2.60) (3.08)

Africa -.125 .205 .404 1.29(-0.24) (0.35) (0.68) (1.88)

Asia 1.81 .926 4.19 3.98(3.91) (1.75) (8.44) (6.91)

Latin -1.99 -1.57 -.477 .333America (-3.88) (-2.74) (-0.83) (0.51)

North .509 1.95 3.22 4.96America (0.69) (2.22) (3.90) (4.96)

Middle 6.62 6.65 12.10 12.90East (9.42) (8.67) (17.07) (16.60)

Constant

Adj. R2 .825 .834 .772 .773

NOTE: Equations (1) and (3) were estimated with pooleddata from 1966-1983; Eqs. (2) and (4) from 1973-1983.

49

17 in-. k - . 9 . N- . - 4 0 .- %. o 7 f-

1-4 ('J (N- I 0, 0 1 0 0 o1 M 1 0 - - 0 0 140 -TN U o N

I I-~ 0 N - - I - - ~- - -~ -

(N c am00 ! 0 W (NN Zv 004 co' oa u- oo LO~co ,-r. 0 O ~ .4N 00C) (N L (1m OW 0 W OD u'W f-I

N- 'rJ (N(Nl I '4 1 0 (j 1' 0 ID! (NO ' -4.c1 -4 0 0 - 0 m1- (Nl H

asN - C -. . - 9N . C .- . N- -. . A-. -! C! - LA- 0

a) c,4 000- I~ - ON (N0 a-0 Ns 004 0) "4 s~).4a

rA

C) (1o "TA Ho 3-A '- 0c) 0 -0 0 0 .oN ( O

0D Win (1-T04 o 0~ )( A)N Ln N N40m -40 3(10 04Nr4cDu) - W 0404-7Ln o

a)~ A) W a) - ONA Ia) (N)0-4 (( .J4 a a) ONDL

r- (1W CrC' 0 -m4A) a -4 a%4 uI) 00 - 0 kD- 0l m0 (NO 0 4r4a c

.- I 44 I- 4 4 I' C;WL 0 0 1 0 0 uA) 4

a), Or- (NN D Oa) Lcq) (N r- NOD co4L 04.- (Ni (14 0o A HN- 0a 04) OLA L>u- ) co 0- m1w 040 Lu) w 04cj Wa)o o aLO 4a, V~) .H4O

'A I.- 0 A) II C C 0 1 0 0- 0 koc.)

w - -0 -co -' '7 m

-o - -N r-N 04! -4 v)4 0Ia (N04 m 4 004 (la 40 m 04 - IT u) m 1-1- C. N ON 1NA 0) I'- C) (1 (IA C04 NW 0 IA )L

.- 4 (IL I n (N I - 0 -- 0 10T 0 . 4 n

Z NW COA -4 4!) MAC M CO -) 0 r- A)N ALOA (-i - 'C4 Na N ) 0W 0NW Ndr'

7 - (1W Io 04 Q. .0 co.-00 N 7 m c 4 10u) o 104 0- 1-1 -4 - 4-r0 Ca)(1

z - I ~0..;c C:

A)4 (N~- I (N 0) 0N 1 - 4 0 0 .- 40 (- -0 a.(1

-T mIl I Ij 1 I I 14 I a 1

Nz WO 401 -4 m 0400 (1( A)- WW LAO '0 a) W -4 '9- 9N (IA m (:N 0 (l CI .4 0- 4 4 0 : C1 (NO 0

N m O 0 4 ()01 A)4 ON4 m( I(1 0 (N ~' N m a % (n

C:C0 W 0

-i H E 4-) V)a Hj(1) WJJ -, -1 Wi- 0. E) -

.0 0 H: -4 c 0 - 0 0

0 00 0 HO 1 I 0 H1 (V 4-) (J) fnU v)

c 44 D -4W w ) k4 C 4 4 -W H E w E 0U Cz> In o. 0 :3C z5 -40. CL I 0 m -4 U) (a~ O4 0 w 0

50

- :; - c1-" IOID mm -O-D -

co wc) M~ 00o ~ r- U-W) OD~ 1C-4 LO 4 cli tn

I 0 0 0 Ur)1- 0 N'J(N 0 04 .- 40 ID( M l.In

Il OD r - -L' -)0

c00 mnd c0 cl oN m~~ 00 co ( ( \fl m~-0

I -4 1 I . r- ((m 1 0 -4 0 M (N 0 Un C' O m

Lo I I Im

-o C14 0 ~ M 0 - -C- 14-

I 4 4. -4 C - (-4 0 LO 1-4OD

.-4 c(1 I 0 - C4m 0 o Cn 7 N -40 In .4 ONJ- 4 CO M' O- 0 LO - 7 C'14

- 0 I 0- 04% Z, '- 'D m cc 'D(

C' I0 0 O\0 01 4 [-a .- ( a U (10 C')( .( .

(1) 10 0 0 - NLr) - -4 (.1-4m1-4 -7' (.-4 LJ).-4 (I l!

C- ('ACr- 0 1-!' 0 Lldm r- LO 4 n --4( - 4CJ a'( C m n 0r- fLn O 'n(V

10 0 1*0 1' .-4 CN Lf(' L Cd 1-4 LA-4 L

C-

cn00 C, 'A -l -- - -4a% 0 OD C- 'rD 0.- OLr %D 01!' U)L C--4 n O c r- co(' LO %DJ - ) ON-

- C-4 ' 0~ -1D 1-1 . W 0 1'4L -1 C-'- _;A L C- (IN 1

m I

C- (I a% 0!. 0 !' 0 11 AJ a'( cl DI LON r-14 0 0LD -4 (1 O

-4( ) I' -4 .- I' -I 0 4!-4-4-4 10 '1 0 LA- U D

oI a' 1 I)0-4(1)I 0 -4 1 1-4 0 C-4 04 0 1 0 Rr' .- 0 LO ID ko

0 0!')0 '0( OLD0 C O .H L LO (N 0 00( M C4 - LO0 -4 04 0 N rLA(14 I -4-4-4 -4 1 0 10 CS)!.) C 0-4 14 ('4- Ln4 LL

C,'-4 O (1LA C')\ 1 '( aN 00 ( 0 C-0 ' 04 TN- w r- 0C) LO( m ~ ; 0 (Na L'(-- N S) O La 0% (

(C) I.4 . (N 10 00 -4. 0 (N N'4-4 m(1-4 (10 W-4

0 0 04) -1 -

w4 41j. V) w4 G) 01(w ). H- -4l 0~ w dU 100~ a - 1 " C 0 0- ) ( - H ) (

- 0 0. n (D 0 p M 010.0 0- 04 0 C ) 0A 4) j-4 0. 0 4 ~ ) 44 HOG0 ) V) i r4 G - G L

Q 0 .p ~ E E. w, 4) -- 4 c 1 4 1 E w E 0 - . 0->0 tt Q 0 4 - c. :) '-4-1 4 G) 44 0 4- 0 -'

,En 19U)- O 0 U C) . 'o z

51

Table 28

OLS ANALYSIS OF SPENDING BURDEN, POOLED DATA, COMMUNISM DELETED[Estimated coefficients (t-statistics)

Variable Eq. (1) Eq. (2) Eq. (3) Eq. (4)

Manpower 3.10 3.11proportion (19.89) (19.68)

Communism

Threat -. 014 -. 012 -. 011 -. 008

(-7 .20) (-5.38) (-5.00) (-2.81)

Guerrillas .582 .750 .525 .731

(2.33) (3.00) (1.83) (2.45)

Alliance .034 .028 .020 .013proportion (9.84) (7.29) (5.03) (2.93)

Freedom .072 .054 .415 .321

(1.32) (0.90) (6.85) (4.58)

War 2.77 2.60 3.62 3.00

(7.03) (6.20) (7.89) (5.92)

Conscription 1.23 .937 2.18 1.89

(4.88) (3.67) (7.60) (6.27)

Europe -1.75 -1.33 .047 .643

(-5.37) (-3.73) (0.13) (1.56)

Africa -2.10 -1.33 -2.25 -.999

(-4.18) (-2.37) (-3.83) (-1.48)

Asia -.062 -. 610 2.04 1.97

(-0.14) (-1.24) (4.08) (3.46)

Latin -3.52 -2.83 -2.16 -1.28America (-6.93) (-5.10) (-3.69) (-1.93)

North -.031 1.26 3.06 4.49

America (-0.04) (1.40) (3.38) (4.21)

Middle 2.76 3.54 8.02 9.42East (4.33) (5.18) (11.87) (12.68)

Constant

Adj. R2 .809 .823 .733 .740

NOTE: Equations (1) and (3) were estimated with

pooled data from 1966-1983; Eqs. (2) and (4) from1973-1983.

52

LA-. d'- A-.'- 0 - , - -

n LOAN OL "'r OH Co O\O D 0 ~ '4' co ~4 ~ N00 ~ Or, 0 -W r-ODk -4 CN LAN c 0~ OL m~- 0~ co O

H4 CLA04 0 -4 r- N 0 1 0 0 HO4 HO NH NO1 4 l

co-4 -T . 00 ko W- Lo-

0 r--- -1 1-4. -4 - N -4 *0 ! 0- 1' - - 1 - a

-4 WN O.H (Dd 1 m-L 4CT O LAW z',- 0(1 LoL 0-4 OL ,OD 4,- 00 o O m( C% Wco (1c' .-V H M'L OH L

H 11 I 4 H 1NH 0 ( N 0 H 0 C'4 HO H

- LA- - a-.L -D 1D.oo -1- I-- LA'-), a%0D M- 0L 0 .H .- 4 mA~ MA d(n C-O L~ OD U)LOr- H

Co. LALA to NL oro 00 OH N OO LA N 'W LAL OD-I

H- (Ir- 1* 0 _HH H1 I 0 (IN 0 1 0 0 1' 0 O O 0

, I, m I Io

m HI -4 LA-. N -1 W0 LA- LO~. H 04-

C4 WN o- WNa )0 W N -ON HOL W(I LAO w- mI -T~ 004 HW 0

H4 (I I 1' 1 N N- 10 LALA 1 1 0 1 0 O 4 'A HO NH -

Cli

on . w - D a' H N 0 H -4 - - NE4 kO r- (N 0 L O A OW NW ()1% HH dOLOr- LOW O W N CO'J0r-- D - U

H q oI I H Hn N0 mWW - 0 I H1 1-0 o 0 10 NH4 CDM - 0 'H-I In I I* I I*

0. M' - 0O

D a, N~ O H - 1wH1 mo0 U' LO w k W r-W W -; WH C-W kD mW -T LOC- H1 W 0~ CO OO14 W ONC C 004 Nr- (IN 04M TW M M aLO WDN LAH

-r : C-44 rN- wo W r, N -0 Wj 0 Lo ~ - ~ -

H- 0I0 ) N 0 (1) I 0 HH HH4 (1H 'rI D mU o 0 WN 0 (n - N lCl)

Z W -L L-, r- - WLA NH Ha' LAC( ' O N ', OW LAO )C-- CN 0(1 00 o H OW m' 04L 02- LA (( 1 N -

a' . C' .L L 1H- NW4 I N 0 m1 0 0 HH NH 1H HO LA')N HOT 1-4 (1

0-, e A C-- C-- I 1C--- - - -

H : N0 C N 01 . C 0 We) H H W41 A H W

C4 04 00 ) W ' z( ) U(arW H E (4) -4 42a 4 C A 4 4 E f

> (a- a H Ic :3 -'- O) w() 3 44 V a4 0u( EO 0C 1. Ht CO ItI WA (( x H W<

53

m ~ C 00 CW 0 -) km-oCCJC~4 04 .~~ N CJA ~I 0) 0 I 0 .-4 CN 1- -4 ,-40C 0 -4 0 0 U - 00

I41 C 0 0 M4 L V All 0 0 ('J.-4 0 LA -4 -4-

- I -I

'LA U.) 4Lo ac C\ ~ L~ k N 0- '0 ;3 00 aON 4Al OLr -4 c- 11 o- N4 -A - cJ a' l

I 10-4- 0 1-4 C 14-4-4- 0 I 0 0 I1 0 -w -4 o C-

o CI I

I0 0 0 u) - ,4 .1 O - -4 w 04 co- 0 - -T c.J

1 - - -0 -C; - 0 1 1 '-

a' C Dcl ocs zo C '- Aln C10 Nm 0co~(C' 0 lQ0 1~ C%( O r-a -I~ MA r- L M 4 0 CO -M L

14I0- - 0 0 1~ 0 I; 0 c-4 c c(1

En ID -4 r- -

-0 r- co ~w 0 (1 L - W 'r r-4( 0-L OD1 OD LO MN r a%~ (n0t

410 0 1 0 0 -4 -q . m-4 -10-4J1 0 Lo-4 M4LW

I- y oJ 4r I N - - )r- -n -.o 0 - -'-m04--D

- *- r- 0 " 4 0 - 4 - -7 OIC? LAN CO NO A ' - "L C14 Na' M ~ C1 r

H ~ ~ -.4 1~0 10 0 0OD l---0 Al4 0 L- 1(L" I1 0% - -

.noL r- -4( 0L w'I 0 Nco (10- d Lclj 00 r' 0 D 1 N Dc

o C)I- .4 . I 0) l l 0 -:0714 l- -4 (1k

0 N N-4 C -4 0- -4 0 10 A 1 0 ('-m 0'- (1 7-4 4 'cT

N- mL 14 00 r- A co m- r)A AN m N '(1 4

I- 1 -4 0 Alj N Al -T 1 1 0 -7 0 r 04 *-4 co M

C:

N4 Om 4-4a ONW ~ .-4 (A (v Nj ~(o 40 0 l

I: 0 Al Al1 -4 c-.- I 00A C. *4

0 0 -4r r 4 C - - -0 H E 00 Q)4 0 )V 1 l a . 0 " ) Vc4 "- 4 (D -Al~ 0. d) '0 c 4 4 E U r

>0 m 0 C1-4 -- 4 -4 fo- 0 :34-W4 0 < C) 0 '(0D zO C 4 C OII 0 ( - -0 0 0

54

DOES PER CAPITA INCOME AFFECT SPENDING BURDEN?

The literature offers conflicting hypotheses on the effect of per capita income on thedemand for military services. Some analysts argue that spending burden can be expected torise with per capita income. 9 Thus, defense is assumed to be a superior good. On the otherhand, some analysts present in effect a hierarchical ordering model, in which a certain thresh-old amount of defense is needed, beyond which the marginal value of defense falls sharply.Thus, the share of defense in GNP is predicted to fall after that point. Until that point isreached, a credible threat of invasion or takeover by a foreign power obviously can reduce theincentive to acquire goods or capital subject to destruction or low-cost confiscation. Still, alarger stock of capital that can be confiscated may increase the incentives for invasion byforeigners.

In order to test these hypotheses, per capita GNP (in real dollars) was included in theeconometric specifications. Table 31 presents the results of regressions estimated with pooleddata for the 89 nations from the period 1973 through 1983. Per capita GNP actually carries anegative and significant coefficient. Table 32 presents cross-sections with manpower propor-tion included in the estimated equations. Per capita GNP carries a negative coefficient in tenof the eleven years, but is largely insignificant. With manpower proportion excluded in Table33, per capita GNP has a negative coefficient in all years, but it is marginally significant inonly about three of them. These findings allow us to reject the null hypothesis that spendingburden systematically rises or falls with per capita income.

In any case, inclusion of per capita GNP as a regressor does not affect our findings on thestatistical relationship between Communist states and upon relative development of militarydimensions.

Section VI discusses our econometric findings on the determinants of manpower propor-tion.

_9See, for example, Payne, fn. 4 above. Note that this hypothesis suggests not that military spending is merely a

normal good, but that spending rises as a proportion of GNP as per capita GNP rises. The data on per capita GNP indollars were obtained from the U.S. Arms Control and Disarmament Agency, World Military Expenditures and ArmsTransfers, 1986.

,55

'Fable 31

OLS ANALYSIS OF SI'ENDIN(; BURDEN. POOLED 1973 .1983 D.I'A.

PER CAPITA GNP INCIA'DED

[Estimated cefficients (t-statistics ]

Variable Eq. (1) Eq. (2)

.Manpocwer 2.70proc ot in ( 16 .80)

-usrn 2.75 4.42

(8.01) (11.72)

Threat -. 011 -.007(-4.91) (-2.76)

gurillas .689 .660(2.78) (2.33)

Alliance .026 .014propcrtion (7.06) (3.20)

Free 5om -. 392 -. 458(-4.82) (-4.90)

War 2. 95 3.48

(7 .25) (7.41)

Cons:ript ion 1.06 1.87(4.26) (6.69)

Per capita -.012 -. 0002(-2.42) (-3.60)

Europe .395 3.13

(0.71) (5.06)

f rica .820 2 45

(1.33) (3.49)

Asia 1.64 5.09

(2.86) (8.26)

Latin -1.09 1.21

(-1.84) (1. 82)

North 3. 65 7.84

.erica (3.29) (6.28)

Mi "'X l, ! .e 7.19 14.16East (8.62) (16.99)

2 j .8 tan7tArij. .".835 .778

56

Om n~ W O ) o- .- rr - ) 04) CNN OX) cm c 0- n )X c - m a- a

a)L-X) W) OX), U.- ON 0 'r a 0 )-D) > )) 00

a,'-4 N X 1*I - 0 1'0 ~ ' ~ 0 0 I0 1 0 '-T ~ '-

a) I) r- O N O 0 NO W 0- ON 00 Na InX N> m ) Ln

NW~~~ NN0.0 N I.4 l) -N I- 10 0 0 (n 0 -4 .I I

a) cm c c CID ~ ON 0.- -K7 ON 00 ,ra 0-f N.- OX ) N-o . aN) - 0

m4 1> 0N N m- C-4 -I 1~ ~' 0 1 0 0 0 0 mO 0

% r- co o - -c In I ~ N r- m C 0

Z 11 ~-) 0l~ NX) .- a) M) Na0' l- CJ) W- ) )) aa a- o a) Na) a0 O- NW r-- cl O ~~ m~ mC o ~ co) o-U X)0 00 00> n

a)

Z~ -47 OW CN 101'- - N N 0 0 NC4 -0 10 O N

CL I ' C0 CD r- M D (n

r- Na" U)D Or-m 0m <n> a)W co OW m) C14 No 'D- CD>a)

-4 m- .s- 4-N N 1 H XX 0 10 0 -- 4 1-4 0 1 0 NO N

r- I o kD 0) I0 -r co ~

0~~~~~~~~~ U)U -4a C-~ N O C-- >) O )) O N (n, X)-4 aX) C

0 a) a) OW a-)' con IU) C-C-m mn ~ 0 -X "1 ) 0) 0 m

C- q: mW N 1* - -) N 1 0 1 0 0 0 0 .9)

(1 - -3 m~ 6 k-- 0)- 0D .o n mo -a) N- 0-- 10 - a) - 00 -

.0j m rn C14 00 OaC0 4 10 ' Cm Na 1W CN N4 Or- a) n m~)a))

(Vn

-4~~I Nm -,4 I - - 0 1 0-4 -0 10 NO1

0J

: 4 W 0>UC) m) N) a) )) )4 ~ X o N XC- >04 N0 C. X-- ON Ma -1a - ) 0 O.4 a- )4 X

X ) F 2 .

57

0o 4A.- 0 -T . 00ON .- 4 0.- co r- cA 04 c4 4!) . 0 OD

I 0 0 I C 1 0 cn - N 1 -40 N.4 0 NN 04 'r

(D - r- I L I - -

q ON 00 Ndi ) Ni -40 " N~ 0 ll m ~ - 0c0 CO 0(10 0D 00coi00 0 C 0 0 ! l 1

-n zr 00i .- n0 I'0 N-~ ON 0 -4 -I ON 'r N Cl ) ( ! O (

0 U1N 00 N 0 l 0 N Od N 00 00, ;T)N 0 ) C N

- 0 ON 00040 co) -(1 'o 04) 0 L N 0 00 N

m 10 0 0 1 -4 j 1'.- -44 10 N Q:- cN 0 0 OC

m '0 Ic, Iu, u- -D

- (nr 00 X ON 04! 'n 4!r ) 00 m14) 0 -4 NO 0Cl k o 0 0 C l moo

-4 cC. 1 4 0 I'r 801 O4 0 mi <OD N~ N N4 C)- ) r- (D C: -( 0 n 0 0 o m r D

r- N Cl0uL r n o1'~ N 0 O cl 1'C 0 0,- 1N Cl Of. N NN .-- ' 0 00 1?- C.)

r-N NO 0-4) o)N 0 4 00 o C 00 co cc) N(1 q1 fL) N o a-4 10jcD" 0 < 0 r~ D 0 I Ir 0-~ 10 -1J~ M?' 4 0 T 'IT- V).- ' 0

I c c I ID

LO N 1'C' 00 o" O. 0- 0 04' OC.J I' ('40 cC'Ji W 0 ' N a,0 N

040

NcLI -4 L -100 A D -0 O 0)1- 0 M4 NO , 00 r-~ r- 0V - N-fl N'? 04 0r- c) o 04m oc D cor

-~CC I -4 0 4 IC 0 4 IliJ M - ? - 0 1 0 41

4!)ON -4' 0 - 1) 1 0''0 '?0 11l 11 N O '

> _c(1 : - 0 , i I 10 NN 1 :- 4 uN mN - 0 < 4X

VI. ECONOMETRIC ANALYSIS OF MANPOWER PROPORTIONS

The dependent variable analyzed in this section is manpower proportion-the proportionof the total population serving it) the armed forces.'3> The right-hand variables for the most

part are those used in the analysis of spending burden in Sec. V, with the exception of thethreat variable, which now is the weighted sum of neighboring manpower proportions. 1 Forpur)oses of sensitivity, the sunned threat varia)le (Tables 25-27 above) is used also.

As discussed in the previous section, the equations excluding manpower proportion as aregress(Jr were preferred on a priori grounds to those including it. It is reasonable also to

exclude spending burden from the right-hand side of regressions explaining manpower propor-tion. In a behavioral sense, one can assume that because of shifts in exogenous circumstancesor internal pressures and incentives, decisions are made to expand the force structure, or, in a

larger sense to develop military dimensions more highly. Examination of relative costs and

military value of alternative spending programs leads to decisions on how to expand the forcestructure, and thus on total additional spending. It is unreasonable to assume that a decision

to spend more simply emerges in the absence of changes in other exogenous factors; therefore,exclusion of spending burden from the manpower proportion equations is sensible for reasonssimilar to those given in the last section. We are trying to estimate causation instead of mere

correlation or definition.

Before turning to the empirical results derived from the full econometric model, it is use-ful to examine tile evidence inherent in a simplified model, as was discussed in Sec. V on

spending burden. Again, we delete the threat and freedom variables, and substitute dummyvariables for democracy and for non-Communist nondemocracies. Table 34 presents these

findings. The ('ommunism coefficient is positive and significant, suggesting that Communist

systems tend to opt for manpower proportions greater than those of non-Communist systemsby 1 or 1.5 percent of total population, holding all else constant. As noted below, this estimateis somewhat higher than that yielded by the full econometric model.

Table 35 shows the results of OLS regressions of manpower proportion on the right-handvariables, estimated with p)ooled cross-sectional and time-series data. Equations (1) and (2)were estimated with data for the 89 countries from 1966 1983, whereas equations (3) and (4)

were estimated with data for the 89 countries from 1973- 198:. The spending burden variableis included in some specifications of this table only to illustrate the high correlation betweenspending burden and manpower proportion, and to show that inclusion of the variable simply

reduces the amount of variation in tile dependent variable left to be explained.

As expected, the spending burden variable is significant. The Communism variable is sig-nificant in three of the four specifications; however, the magnitude of the coefficient is highly

sensitive to inclusion or exclusion of tie spending burden variable.

The threat variable has a positive sign when significant, but is insignificant when spend-

ing burden is excluded. The dummy variable for guerrilla activity carries a negative coefficientwhen spending burden is included, but is insignificant. The coefficient f'or alliance proportion

is implausibly negative and is significant. The war dummy variable is most significant and

"'The data o)n rminpwer ar:,rmins ire takeni from A D('I A. i!)K;, varimus isucs. Militarv mlnpwer intludesatcirv dutv nmilitarv pvrm minel, imt'mltmimng arami hiltar% tre', it thev are similar to regular ums un mrganizatimn. equip-rzi'nt. triiining or nii,mtr. Resi.re, are exum utiud

''The f ustrititi t te Ihreat \armlmltus "' i m ti - u',vd in Sv. V.

.-5

59

co 0 Ir0 1fli 0~- 0. kD r--. 00m -

0o -On 0,- r-o -I u1- ) 0L0

.- ~ -1( 0 I* N ' .- '-

N .- N 0r 00 (1( 0(1 CJ -0o 0-IT ,-I0 c., r- 1. c,~ r- 0 m1 onL

00l

'- m-0n 2' flO O2H 00 '

- n( 0 10 N - N

0) co( 00 0> co 1- N " 0r- 0c1 -H- O 0 00c cj c I l r0 ID 0

o nr- -00 N 00 N4 >1O

to C>H(1 0 l H o 04 Nl 0

0 00 0 ON 00 N n (Ir- m1( 00 ID 00 0-I ( 0 1

r- -I 0 n 0 - 3 -ON - -ITc

-o 0 C) <Dr 00 0 0 - c1.D 00 lo c

C: 3,I 00 00 ON 0 r*n(

0n0

M In 0-. 0-. '. (1 0- .0~ ~~~ NO 0m 0 N 0 0 0

> n (1( 00l 0~0 00 oIn ON (10 0I N

c: 0,H) 0- 1 -(1 (

ov o I u

73

01 N" ,-4 O :0 (10 (1 N 1> (1 0 00 0 34 1

60

Table 35

OLS ANALYSIS OF MANPOWER PROPORTION, POOLED DATA,SPENDING BURDEN INCLUDED

[Estimated coefficients (t-statistics)]

Variable Eq. (1) Eq. (2) Eq. (3) Eq. (4)

Spending .089 .098

burden (17.98) (17.13)

Communism .048 .405 .136 .478

(0.81) (6.70) (2.06) (7.08)

Threat .019 .003 .021 .004(5.07) (0.84) (4.65) (0.78)

Guerrillas -.051 .001 -.057 .017(-1.20) (0.02) (-1.26) (0.34)

Alliance -.006 -.004 -.006 -. 004proportion (-10.85) (-5.91) (-9.37) (-4.93)

Freedom .064 .046 .033 .014

(5.18) (3.33) (-2.33) (0.89)

War -.061 .301 -.163 .161(-0.86) (3.96) (-2.02) (1.83)

Conscription .090 .261 .088 .253(2.05) (5.48) (1.88) (4.86)

Europe .606 .696 .630 .758

(10.93) (11.26) (9.79) (10.42)Africa .209 .177 .347 .339

(2.27) (1.76) (3.25) (2.90)

Asia .511 .773 .678 .915(6.29) (8.95) (7.13) (8.95)

Latin .628 .512 .714 .598America (7.11) (5.25) (7.03) (5.33)

North .743 1.04 .638 1.08America (5.49) (6.78) (3.82) (5.65)

Middle 1.03 2.01 1.1i 2.21East (8.28) (16.51) (7.85) (16.23)

Constant

Ad i. R .825 .771 .813 .749

NOTE: Equations (1) nind (2) were estimated with pooleddata from 1966-1983; Eqs. (3) and (4) were estimated withpeoled data from 1973 1983.

61

plausible in specifications excluding spending burden. The dummy variable for conscription issignificant or marginally so in all four specifications. Finally, the Middle East dummy vari-able, as expected, displays the most importance and significance. The adjusted R 2 for theequations excluding spending burden is 0.749 and 0.771.

Table 36 presents OLS findings derived cross-sectionally for the 89 countries for eachyear 1973 through 1983. The spending burden variable is excluded for the reasons notedabove. The Communism variable is significant in eight of the eleven years, and is marginallysignificant in two of the others. For these ten years, the coefficients range from 0.380 to 0.660;this suggests that Communist systems, ceteris paribus, tend to have military manpower levelsthat exceed those of non-Communist systems by about V, of 1 percent of total population. Thisis not a trivial effect: for a nation of 30 million, this amounts to about 150,000 men, or tendivisions. Adjusted R2 in these regressions ranges from 0.704 to 0.752.

The threat variable has the expected positive sign in seven of the eleven years, but isinsignificant in all years. (Table 37 deletes the threat varaible.) In fact, the threat variable isinsignificant in all specifications (Tables 36 and :38 through 43) except upon deletion of theregional dummy variables (Table 43). In that series of cross-sectional regressions, the threatvariable always carries the expected positive sign, but is significant or marginally so in onlyfive of the eleven years.

The dummy variable for guerrilla activity carries a positive coefficient in the earlier yearsand a negative one in the later years, but generally is insignificant. The estimates for thisvariable are most plausible in specifications excluding the regional dummy variables (Table 43),but even then the coefficient is marginally significant in only two of the eleven years.

The alliance proportion variable has an implausible negative coefficient in all years andspecifications, but generally is significant only before 1980. The freedom variable generally hasa positive coefficient in seven of the eleven years, but almost always is insignificant. The wardummy variable is insignificant in all years except 1973. The conscription variable carries theexprcted positive sign, but is significant or marginally so in only about four of the eleven years.Finally, as expected, the Middle East dummy variable is the most important, suggesting thatconditions in the Middle East lead toward manpower proportions higher by about 2 percent oftotal population than would be the case otherwise.

Table :36 gives the estimated coefficients with no variables deleted from the models, whileTable 44 gives the Communism coefficients from the various econometric specifications inTables 37 through 43. The coefficient is significant or marginally so in every year and specifi-cation except 1973 and upon deletion of the regional dummy variables. The obvious reason forthe latter finding is the effect of the Middle East in the sample, since the Middle Easternnations are both non-Communist and heavily militarized. The central finding in Table 36 isconsistent with those from the sensitivity analysis summarized in Table 44. The finding isrobust and can he summarized as follows: Communist systems, ceteris paribus, have manpowerproportions higher than those of non-Communist systems by about "K of 1 percent of totalpopulation.

Table 45 presents cross-sectional findings with Bulgaria. North Korea, Cambodia, Laos,and Vietnam excluded from the sample. The Comuunism coefficient falls a bit from thoseshown in Table 36. Moreover, it is significant or marginally so in seven of the eleven years,whereas the number for Table :36 is ten. Nonetheless, the estimated coefficients do not differfrom those in Table :36 significantlv, so that Table .15 supports the earlier findings.

Table .16 presents findings est iiated with pooled time-series and cross-sect ional data.with the summed threat variable substituted for the weighted manpower proportion threat

62

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67

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68

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69

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71

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C-I

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0

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00 01 .00 C I' 0 1 001 -O(0 C )> 0,

0 COJ-- 0 0-10( 0(1(D u-0 >- C-O 1. 10(1(n0 1-I

0 0 0 m(1 00 0(1 I'D .- 4( N( 0 > > 0 x00 ( 1

CD .- 0 1(1 1 0 m- (1 -4 ( ( -(1 ((

cc .- 00 I 00 ( 0 .- C-4l ;3 ( 0> m0 -4 '

(1 ) 0 0D I 0 1 10n I (1 r- ~ ( n co u--I (1(

> (n N 1 ( 0 0 2'I' ( (1 c:) cc 1 ( .0 10 .4 0 1

ID - CD I I - N -O r- CO- - -

rf > ,0( CD (1( 0 0 0> 0(1 l .-. A r- - m1 0> 'ID c -1 0>, '

1'0

-.1 0 0i .-1 1.- 0 - 0. r- (1 0n T).I .4.

r- --. o I o --. -n --. - -i 'n .o -

Ln- CO C,~ ml) 0 I 0 0 0 ( C ) 0 m 0 ( 0 0 -(1 - (1 m m- 1

0~ 0

m In1 0 0 1: 0O I' CO ( 0 " 0 1 00 I 10 .1rI' 3 r0 11 C 0 C I --. .--- 0 -L - ~ C-

I-) I"V

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C: 14 A J-) F o L4 C-C_C: 10 fn mC < ~I 0 4 -.

72

Table 46

OLS ANALYSIS OF MANPOWER PROPORTIONS, POOLED DATA,

SUMMED THREATS

[Estimated coefficients (t-statistics)j

Variable Ea. (1) Eq. (2)

Coramunism .449 .079(7.16) (8.01)

S u red .001 .001threat (2.14) (2.64)

Guerrillas -.007 -.002(-0.14) (-0.04)

Alliance -.004 -.004proportion (-6.15) (4.91)

Freedom .047 .009

(3.34) (0.54)

War .352 .245

(4.66) (2.74)

Conscription .312 .307(6.17) (5.64)

Europe .638 .678

(10.29) (9.04)

Africa .141 .314

(1.36) (2.51)

Asia .871 1.06

(9.93) (9.91)

Latin .518 .618A.merica (5.17) (5.14)

North 1.01 1.08Azme rica (6.84) (5.70)

Middle 2.02 2.23East (16.07) (15.46)

Constant

Ad-. R2 .787 .764

NOTE: Equation (1) was estimated with pooled

data from 1966-1983; Eq. (2) was estimated with

pooled data from 1973-1983.

73

variable. The summed threat coefficient is positive and significant. However, in the annual

cross-sectional regressions (Table 47), the summed threat variable is marginally significant inonly about three of the years. The magnitude and significance of the Communism variableremain about the same as in the regressions including the weighted manpower proportionthreat variable.

Finally, Table 48 presents annual cross-section regressions with per capita GNP includedas a regressor. The coefficient does not difter from zero in an year as a matter of either sta-tistical or economic significance.

74

0o In 'c ' 0 0n 0 0) r-' j 0 ... n 0O -7 m -'(Q

('4

"D' (.4 0 (D 11 0c CC 0r W-' 'X m. 0 ) ( n .-'4 o-.-- (

o ~ ~ ~ r- o- o- --.nc, ' ) Ln -

co 40.4 c ) 0)Q 0-' 0- (4 0 .fli) 00 -- (4 0 00 ) CD0- O ,c

C) (1'0 [ 0 0 10 .- ' 0 - (.440

::Z Q00 00D 0(4 ON (D41 C - M00 C4x 0. 0 -m o 0' '

1 0 1 10 0 1 0 -, (4 0 ('4 0 - (4)

I I I - I - - - -

0 0' 0 (D 04) ('4 ('4 or (-4) 00 .r O -0 .'

Q 0- (- 0) 10 a) -- 0 c co N 7 0-4. ID -4..4 (4)

0 ~ ~ ~ ~ 0 0. NO u- - r OL -

0D 0 014 1

In 0-TC0N CDC(m'4L)-:

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(4) ..-' 0: ('4 0 0 ( ( ) ''4 .o' ( 4 ( 4

~0.( CD) -. 0c* N-.- c'..- CD4) "40 (-0 .,0 0 0 (

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VII. OVERALL SOPHISTICATION OR LEVEL OF MILITARY ANDCIVIL CAPITAL OR TECHNOLOGY

As noted in the Introduction, no single indicator of tendencies to develop the militarydimension is complete or unambiguously correct. Therefore, this siudy employs several alter-native measures or dimensions both as checks against each other and as a means of acquiring afuller understanding of the relative tendencies in Communist and non-Communist nations.This section examines the relative sophistication or level of military and civil capital or tech-nology overall as the third military dimension. -Level of technology" is a convenient short-hand phrase for this concept: but we are not measuring the "pure" or average technologicallevel of military and civil capital. Instead, we are interested in resource allocation to the mili-tary and civil sectors as reflected by their technological levels overall. Thus, this concept com-bines quality and quantity; new (or "highest" technology) military capital is given the highestassumed technology "value," with older capital discounted or devalued at rates discussed below.Obviously, large countries are likely to have more capital and thus "more" technology thansmall countries: that is why we were interested primarily in the ratio of military to civil tech-nological levels. The effects of sheer size should be reflected in both the numerator airddenominator, and thus be canceled out.

The level of "military technology" is an ambiguous concept. Since there is no acceptedmetric for the level of military technology, we must rely upon measures that are reasonablesurrogates for the underlying concept. This section employs the numbers of medium andheavy main battle tanks and the numbers of jet fighters 2 in the nations' force structures,adjusted for levels of technology embodied in each tank or jet. This technology level isassumed to be a function of the age of the tank or jet, with embodied technology growing atrates of 4 percent and 5 percent per year in tanks and jets, respectively. 63 For jets, then, theindex for a nation in year t is

t

J, -' jets, (1 -

where i is the year in which the jets achieved initial operational capability, t is the year forwhich the calculation is being made, and p is the annual rate of technological improvement,assumed to be 5 percent. Thus. Jr, as a surrogate metric of military technology, measures the'quiwah'nt number of jets embodyig current technology. For tanks, the index is the same,except that the various components of tanks are added separately according to vintage (age)and approximate proportion of' total tank cost: ' ;

J-.J fighters are defined as ground attack tighrer,, air detense fighters, interceptors. fighter-bomnbers. operationalcnter ,,n units, and the naval equivalent,. The data tir tanks and jets were obtained front the annual editions of'II SM. Th, MIll1 BulaIte, and Irm the annual edili, ,of lane', AI The W,rld's Aircraft and Armour and Artille,.

. The Anaa- I Iic Sciences (orporat iu estiniate. tank antd jet "performance" to have grown at these rates. See.4 ,,,, n ' .; Wlapor , S * ' t,'t- A,,,'rrzuti,,,m (',t and 1','rf,rr t c,' Trends. 'rR-3997-3, April 195; and As.s,,sinA.todcrri ati,, (', Ct a, d l'r/orruri(e Tr,',id.s ..hr rar (',.,t (Cmirp rt.- .TR-.997- 2. April 1985.

''See 1'.S. Arti,. "'rocurement Ili-tory and Anali ,t Mf6 Tank Fanily," January 196. See ali Arthur JAlexander. Arm,,r b1,'l,,pnwn' in th, ,t w t I (ti,, und th' I ",!,',d Stnt'. The RAND Col)rporation. R -I,6 -NA. Sep-te,. ier Il76.i The separate tank cotprip nentt arid .uied r,,p,,rti ,ns are: engine. 11 percent. transi.sion. 7 percent;gun and itouni 0 percent; Tratk. i, pertentl; hull, 12 pert el; turret. 5 percent: computers. stabilization, and rangefinder. 5 percent ()her cnpne nt, are uh,uted in ihe remaining ')I percent. If a tank it. say , cortprised 75

76

77

t

T, c uI- 1 -p)

where Tt is the equivalent number of year t-level technology tanks in year t; c/ is the numberof' components of type j (e.g., engines) and vintage I; and i-'

a is the proportion of total tankcost representpd by component j. The jet index was not computed by component (such asengines) because the available data do not allow such disaggregation. For tanks, p is 4 percent.Both the jet and tank indices were computed for 87 nations in our sample (excluding !heUnited States and the Soviet Union) for 1975, 1980, and 1985.

An example may be useful. In 1985 the stock of jets for the FRG was as follows:

Initial OperationalJet Type Number Capability

F-104 132 1969F-4 128 1960Tornado 164 1982AlphaJet 173 1978

Since the assumed annual rate of technological advance is 5 percent, the technology"discount" factor is (1.05)-" ", where t is 1985 and i is the year of initial operational capabil-ity. Thus, the 1985 discount factors are:

F-104 ......... 2.183F-4 .......... :3.386Tornado ..... .. 1.158AlphaJet ..... .. 1.407

The 1985 jet index for the FRG is

132,-'2.183 - 128/3.386 - 164/1.158 - 173/1.407 = 362.9

In other words, our index indicates that in 1985, the FRG jet force was equivalent to 362.9 jetsembodying 1985 technology.

The jet and tank indices actually are computations of the equicalent number of "new"(that is, newest technology in the given year) jets and tanks in the given nation's force struc-ture. The indices, then, actually are quantity indexes tiighted by vintage or level of technol-ogv. This seems to be a reasonable procedure for measuremert of the "level" of military tech-nology. If only the technolhgY level of the most advanced pieces of deployed equipment wereconsidered, the comparisons would sufter from a bias: a nation with 1000 old tanks and I newone would receive the same index as one with 1 old tank and 1000 new ones. Or if only theaverage technological level were considered, a nation with, say, one new jet w(ald receive ,

higher ranking than a nation with, say. five new jets and five old ones. Thus, a better

percent Or, I 'w t) 1960+) I ()o poent, and 2 p ler(u.nt I!)7N) oipl, nt, t he index for that tank % '&W he

I I , -. Ml 7.i - I 11 10. 2.-,

It the nation had il) 'kich iank-,. the It l index Aoul i Ihe .,10

78

characterization of our jet and tank indices may be "amount" of technology; however, "level" isused in this section in order to emphasize the central object of the analysis. Note that theindices measure neither the amount of military capital nor military effectiveness.

While jets and tanks are not the onlN types of equipment to be found in most nationalforces, they are reasonable as surrogates for the underlying level of military technology. Thatis, it is reasonable to assume that they are highly correlated with the technological level of agiven nation's equipment overall, and the staggering variety of military equipment, from thesimple to the exotic, precludes a comprehensive inquiry.

While the level of military technology as measured by our jet and tank indices is interest-ing for purposes of national comparisons, what is of more fundamental interest are the relativelevels of military and civil technology across Communist and non-Communist nations. Afterall, a nation may have a higher level of military technology-greater development of the mili-tarv dimension-than another simply by virtue of' higher technological levels generally. Thus,what is of interest here is whether the ratio of military to civil technology in Communistnations systematically is higher than that in non-Communist nations, ceteris paribus.

Measurement of the "level" of civil technology presents problems and ambiguities no lessvexing than in the case of military technology. And, again, we must resort to the use of crudesurrogates for such a metric. Three alternative surrogate me isures of the level of civil technol-ogy are used in this section: GNP, the number of automobiles (and commercial vehicles) inuse, and the number of telephones in use. (Whereas per capita GNP may be a better measureof civil technology, the jet and tank indices are expressed in totals rather than as a proportionof population. The ratio of military to civil technology remains the same whether or not theindices are divided by population.) These surrogates admittedly are crude, but it seems reason-able to assume that each would be correlated strongly with civil technology levels in a givennation. GNP probably is the best of the three, as it is the most inclusive, and technologicaladvance can be viewed as a means of reducing costs generally and of increasing aggregatewealth. However, the other measures are used also for purposes of sensitivity analysis.

As noted above, military technology is far more heterogeneous than an examination ofjets and tanks might suggest. This means that for the most complex force structures-those ofthe United States and the USSR-the indices as described above probably would not provideparticularly useful :nformation. Moreover, the U.S. Defense Department presents a com-parison of C.S. and Soviet standing in 20 basic technology areas of particular importance inmilitary applications.6" Such a comparison is unavailable for the other nations in our sample.The comparison estimates a U.S. lead in 14 of the 20 and a Soviet lead in none. 66 While thismight suggest a substantial U.S. lead in military technology, the analysis does not consideractual deployments, either in kind or in quantity. Thus, as this study views the technologicallevel of military capital, the U.S. lead is likely to be smaller.

More important, it is probably the case that the ratio of military to civil technology ishigher in the Soviet Union than in the United States. Table 49 presents data on GNP, auto-mobiles, and telephones for the United States and the Soviet Union for 1975, 1980, and 1985.

-See AIcation of Rc. ourccs in the Socwt I 'nmon and ('hina- 1.95. 'art 11, Hearing Before the Subcommittee onEconomic Resoutrces. Competitiveness, and Security Economics of the Joint Economic Committee. March 19. 1986. p.116.

''Some argue that the Defense Department analysis Iading to ,IIch conclusions is biased in favor of U.S. technol-,igy because of the obc ious inf rmnational asrntnt ries and because the comparisons inherentiv may consider U.S. tech-nolo N, of tm 'rr w again st Soviet technology t t day. On the other hand. the annual budget battles may provide a•igniicant incentite to emphasize S'viet technological ipr .'ess.

79

Table 49

('RUDE INDICES OF ('VI.,TECtNOLO(;Y: UNITED STATES AND USSR

United States USSR

Factor Unit 1975 1980 1985 1975 1980 1985

GNP ($1973') 2.6 3.1 3.7 1.5 1.7 2.0

Automobiles (inQ) 106.1 118.5 131.0 n.a. 17.2 n.a.Teieouiwes (10) 149.0 180.4 210.0 16.9 23.7 n.a.

SOURCES: ACDA, UN Statistic Yearbook.

U.S. GNP is 70 or 80 percent greater than that of the USSRr whereas automobiles and tele-phones in use are greater by an order of magnitude. Only if U.S. military technology is greaterby even larger proportions-a dubious proposition-would it be reasonable to conclude that theU.S. ratio exceeds the Soviet one. In short, these comparisons suggest that the level of mili-tary technology relative to that of' civil technology is greater in the Soviet Union than in theUnited States.

Tables 50 and 51 provide the jet and tank indices for the other 25 Communist states inour sample. Ten of these countries were Communist during only part of the sample period.The jet index for Afghanistan rose slightly and then fell after 1978, but this may be the resultof the ongoing war. The tank index rose sharply and then fell. Angola's jet and tank indicesrose sharply between 1980 and 1985, but data are not available for 1975 itself. Both indicesrose sharply for Ethiopia after 1977. Guinea's jet index fell after 1980, but its tank index rose.Neither index changed appreciably for Guinea-Bissau after 1975. The indices fell for M am-bique between 1980 and 1985. Somalia's indices fell and then rose after becoming non-Communist. but remained below the levels attained while a Communist nation. The tankindex for Nicaragua rose sharply after 1980, but the jet index remained at zero. Finally, bothindices rose somewhat for Laos after 1976.

'Fables 52 and 5:3 show the data for the non-Communist nations. Tables 54 and 55present the average Communist and non-Communist jet and tank indices for 1975, 1980, and1985. For both jets and tanks in all three years, the Communist indices exceed those of thenon-Communist nations by amounts that are statistically significant or marginally significant,as indicated by a difference-of-means test" s

'Fables 56 through 58 present Communist and non-Communist averages for the threeratios of jets to civil technology for 1975, 1980, and 1985. For jets over GNP, the Communist

"See ACDA. fn .59 above.''The significance levels are as f,,llows:

Year -Jets Tanks

1975 .M1A .0031980 .00.1) .)2219S5 . M; .12:1

80

Table 50

JET INDICES FOR COMMUNIST NATIONS

Nat ion 1975 1980 1 985

China 1363.7 1509.4 1315.9

Bulgaria 83.4 64.1 74 9

Czechoslovakia 188.3 159.0 185.8

-DR 153.7 131.0 171.6

Hungary 48.4 70.7 55.1

Poland 314.4 232.2 220.4

Romania 92.0 109.3 139.1

Albania 34.3 28.8 24.2

Yugoslavia 136.4 117.6 196.0

Afghanistan (beginning 1978) 50.0 51.4 39.5

Souuh Yemen 10.9 34.8 32.5

Angola (beginning 1975) n.a. 9.2 46.3

Benin 0 0 0

Congo n.a. 2.3 4.4

Ethiopia (beginning 1977) 11.5 42.6 60.0

Guinea (before 1980) 5.1 3.8 1.3

Guinea-Bissau (beginning 1975) 0 0 0

MozarrbicTue (beginning 1975) n.a. 11.2 3.8

Somalia (before 1979) 20.1 5.5 14.7

Cuba 81.7 63.4 85.9

Nicaragua (beginning 1980) 0 0 0

Carr'bodia (beginning 1975) n.a. n.a. 0

Laos (beginning 1976) 0 3.8 5.9

North Korea 198.6 154.0 144.1

Vietnam' 98.2 157.7 88.2

Ecludes captured Soutn Vietnamese equipment in 1975.

averages exceed the non-Communist ones in all three years. The significance levels are 0.002,

0.007, and 0.003, respectively. For jets over automobiles, the Communist averages again aregreater in all three years, but the difference is statistically significant only for 1980 (signifi-cance level of 0.089). For jets over telephones, the Communist ratios again are grcater in allthree years, but the differences are statistically significant only for 1980 and 1965 (significance

levels of 0.008 and 0.002, respectively).Tables 59 through 61 give the same comparative ratios fbr tanks and civil technology.

The Communist tanks/GNP ratios are greater in all three years, and the differe,.e. are statis-

tically significant or marginally significant. (The significance levels are 0.101, 0.011, and0.021.) The Communist tanks/automobiles rai'os are greater in all three years, but the differ-ences are not statistically significant. The Communist tanks/telephones ratios again arehigher in all three years, and the differences are significant in 1980 and 1985 (significance lev-

els of 0.009 and 0.006, respectively).

81

Table 51

TANK INDICES FOR COMMUNIST NATIONS

Naation 1975 1980 1985

China 2815.9 3616.1 5303.2aulgaria 898.6 703.6 611.6

Czechoslovakia 1449.9 1387.2 1224.9GDR 1105.9 1116.9 978.9

Hungary 638.0 510.3 436.0Poland 1686.3 1331.6 1207.7

Romania 770.4 610.8 539.2Albania 32.9 27.1 24.4Yugoslavia 759.9 617.4 378.9

Afghanistan (beginning 1978) 134.0 431.3 162.9

So h Yemen 15.5 138.2 177.1Angola (beginning 1975) n.a. 61.4 149.5B-nin 0 0 0Congo 0 6.6 18.1u.' opia (beginning 1977) 6.8 219.5 317.3

Guinea (beginning 1980) 5.7 7.7 11.4,uinea-Bissau (beginning 1975) n.a. 2.3 2.1Mozambique (beginning 1975) n.a. 88.5 71.5

So alia (before 1979) 73.7 44.6 63.4CV03 1 1.4 172.6 266.8Nicaragua (beginning 1980) 0.6 0.5 41.6

Car ocdia (beginning 1975) n.a. n.a. 3.4nao. (beginning 1976) 0 0 9.0

Nvrh Korea 412.8 1015.3 1236.0Vietnam, 313.7 742.5 603.8

'E-cludes captured South Vietnamese equipment in 1975.

82

Table 52

JET INDICES FOR NON-COMMUNIST NATIONS

1*-it 1 n 1975 1980 1985

2e.g m j2.1 62.7 112.71'o::ite1 K~ngrm 139.3 171.2 150.3rnmsrk 54.6 40.4 52.6

Ina:ws 22.6 18.9 27.6228.4 294.2 248.6265.9 245.6 362.9

11ee e 101.2 131.0 120.1.. .... .0 0 C

193.7 115.0 119.5r -anrlnds 94.8 60.1 134.0

N -rwa' 70.2 51.8 57.0r tu"1a 22 . 13.7 30.8

46.0 69.1 71.6Sweden 240.9 197.1 196.2

Szearnd 108.9 121.1 88.9T1rkey -17.9 95.8 124.2or rzra 11.4 12.8 5.2Cesta Rica 0 0 0: =inican Republic 3.0 2.3 0

Salvador 2.7 7.0 1.5a 0 0 0

Honduras 1.3 10.9 8.6,s a I ca 0 0 0

Manama 0 0 0Bo swana 0 0 0Burkioa Paso 0 0 0ame o-- 0 0 5.7

Centra.l African Republic 0 0 0Ohsd 1.3 1.0 0

ana 0 0 01'vCory Cast 0 4.3F. :, "a 1 .7 5.5 3.9V - S r at 0 3.0 3.2v- 2.4 2.1 1.0

3e r 6.5 7. 6 23.10 0 00 0 0

erra Leone 0 0 0'-Sth Afica 37.4 44.4 28.0Jin 13.8 16.6 9.0

anzania 7.1 6.2 8.2TC7o 0 0 3. 6aire 0 5. 6 3.5

Z i. babwe 7.3 3. 11.7Egypt 320.3 250. 133.8Iran 117.0 199.0 39.8Sdq 122.1 157.9 168.2

Israel 215.5 213.0 272.7TCrdan 26.8 15.4 51.1Li -b , C ;.2 147.3 244. 8Syria )7.1 176.5 182.6Nrth Yemun 4.1 21.7 25.0Banglalesh 5.7 P2 5.7Burma 0 0 0India 337.4 219.9 274.8Japan 215.7 179.3 120.7South Kc- 85.2 136.2 112.5Pakistan 104.3 80.5 114.0Philippincs 15.7 7.0 7.9.dh Vietnam n.a. n.a. n.a.

Ta w n 106.4 152. 9 189.5Thailand 5.6 13.6 18.7

~Pf29 ?7m kLTumY DiNENSiON -t comNUNiT H oco mecoupSANTA NONICA CR B ZYCHER ET AL. JUN 88

I RAD-R-3593-USDP MD93-85-C-0030

I UNCLASSIFIED F/G 5/'4

mhh~hhhhhhhi.

J4 0' 2 -011111- 2 llh=5 1111.

1*ii 1*1-

83

Table 53

TANK INDICES FOR NON-COMMUNIST NATIONS

Nation 1975 1980 1985

Belgium 279.2 201.2 172.5United Kingdom 720.0 592.1 656.3Denmark 86.6 139.7 89.8Finland n.a. n.a. n.a.France 669.0 705.2 653.5FRG 2214.6 1985.7 2739.6Greece 367.6 481.6 497.1Ireland 0 0 0Italy 659.6 747.9 772.7Netherlands 462.3 388.4 647.8Norway 68.8 57.3 46.1Portugal 34.0 21.2 28.1Spain 156.4 319.0 312.6Sweden 410.3 313.5 152.0Switzerland 376.6 429.6 417.7Turkey 609.8 1166.7 1136.1Colombia 0 0 0Costa Rica 0 0 0Dominican Republic 0 0 0El Salvador 0 0 0Guatemala 2.7 0 0Honduras 0 0 0Jamaica 0 0 0Panama 0 0 0Botswana 0 0 0Burkina Faso 0 0 0Cameroon 0 0 0Central African Republic 0 0 1.8Chad 0 0 0Ghana 0 0 0Ivory Coast 0 0 0Kenya 0 6.9 37.5Madagascar 0 0 0Mali 2.8 4.7 4.4Nigeria 0 29.1 35.5Niger 0 0 0Senegal 0 0 0Sierra Leone 0 0 0South Afica 67.2 103.1 79.0Sudan 54.7 46.6 62.9Tanzania 10.7 8.8 12.3Togo 0 0 2.1Zaire 0 0 0Zimbabwe 0 16.0 10.8Egypt 1064.0 727.3 916.5Iran 662.5 922.0 475.7Iraq 617.5 1134.3 1324.3Israel 1273.7 1398.7 1592.2Jordan 196.8 211.5 380.3Libya 166.0 1168.4 1216.2Syria 1095.2 1244.3 2129.8North Yemen 8.5 282.6 218.9Bangladesh 4.5 8.3 18.5Burma 7.4 6.1 5.4India 872.5 1041.8 980.9Japan 375.0 447.8 652.2South Korea 438.2 294.5 373.7Pakistan 471.8 408.6 572.2Philippines 0 0 0South Vietnam n.a. n.a. n.a.Taiwan 658.5 66.7 91.6Thailand 0 14.6 62.8

84

Table 54

JET INDEX AVERAGES

1975 1980 1985

Communist 167.1 134.2 125.8

Non-Communist 59.7 60.7 63.4

Table 55

TANK INDEX AVERAGES

1975 1980 1985

Communist 658.1 609.5 598.4

Non-Communist 242.9 277.3 317.0

Table 56

MILITARY/CIVIL TECHNOLOGY RATIO: JETS/GNP

1975 1980 1985

Communist 8.2 5.2 4.9

Non-Communist 2.3 1.7 2.8

NOTE: GNP in billions of 1983 dollars.

Table 57

MILITARY/CIVIL TECHNOLOGY RATIO: JETS/AUTOMOBILES

1975 1980 1985

Communist 0.346 0.299 0.080

Non-Communist 0.155 0.117 0.055

NOTE: Automobiles in thousands.

85

Table 58

MILITARY/CIVIL TECHNOLOGY RATIO: JETS/TELEPHONES

1975 1980 1985

Communist 0.135 0.300 0.188

Non-Communist 0.129 0.068 0.047

NOTE: Telephones in thousands.

Table 59

MILITARY/CIVIL TECHNOLOGY RATIO: TANKS/GNP

1975 1980 1985

Communist 23.3 27.7 24.5

Non-Communist 10.2 9.4 9.6

NOTE: GNP in billions of 1983 dollars.

Table 60

MILITARY/CIVIL TECHNOLOGY RATIO: TANKS/AUTOMOBILES

1975 1980 1985

Communist 0.853 1.19 0.337

Non-Communist 0.749 0.611 0.313

NOTE: Automobiles in thousands.

Table 61

MILITARY/CIVIL TECHNOLOGY RATIO: TANKS/TELEPHONES

1975 1980 1985

Communist 0.614 2.08 1.16

Non-Communist 0.477 0.274 0.239

NOTE: Telephones in thousands.

86

Table 62 presents nation pairings for jets/GNP; they are similar to those presented in Sec.IV. This is a crude way to control for the effects of exogenous influences upon the choice of mili-tary and civil technology levels. Of the six 69 pairings, the Communist jets/GNP ratio is higher infive; data are unavailable for South Vietnam. Table 63 shows the same comparisons fortanks/GNP. Of the six comparisons, the Communist ratios are higher in five.

Finally, Table 64 presents econometric findings on the effect of Communism upon the jetand tanks indices, and upon the three ratios of military/civil technology for both. These equa-tions were estimated with data for the 87 nations (excluding the United States and the USSR)for the years 1975, 1980, and 1985. The Communism coefficient is positive and significant ormarginally significant in all equations except those for jets/telephones and tanks/telephones. 70

These empirical findings cannot be considered conclusive because of the crude nature of ourindices for military and civil technology. However, they are interesting in that they are con-sistent with the earlier empirical findings on spending burden and manpower proportion. Thedata suggest that Communist systems, ceteris paribus, tend to emphasize military over civiltechnology to a degree greater than that displayed by non-Communist systems.

69Vietnam cannot be compared with South Vietnam because of data unavailability for 1975.-0Note that population is included in the equations with jets and tanks alone as the dependent variables, in order to

control for the effect of size on the indices.

87

Table 62

NATION PAIRINGS FOR -JETS/GNP

Nation 1975 1980 1985

China 5.8 4.9 4.2India 2.5 1.4 1.4

GDR 1.2 0.9 1.1FRG 0.5 0.4 0.5

South Yemen 22.0 36.6 28.2North Yemen 1.7 6.2 5.5

Cuba 4.7 3.1 3.3Dominican Republic 0.5 0.3 0

North Korea 10.3 5.4 6.4

South Korea 1.9 2.2 1.3

Vietnam 45.3 16.2 4.8

South Vietnam n.a. n.a. n.a.

Table 63

NATION PAIRINGS FOR TANKS/GNP

Nation 1975 1980 1985

China 12.1 11.7 16.9

India 6.5 6.7 5.0

GDR 8.7 7.8 6.0

FRG 3.9 3.0 4.1

South Yemen 31.2 145.5 153.6North Yemen 3.5 80.4 48.6

Cuba 11.2 8.4 10.1Dominican Republic 0 0 0

North Korea 21.5 35.8 54.5

South Korea 9.9 4.7 4.5

Vietnam 144.8 76.1 33.2

South Vietnam n.a. n.a. n.a.

V)

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VIII. COMPARATIVE CIVIL/MILITARY RELATIONS

Among the four military dimensions of Communist and non-Communist nations exploredin this study, comparative civil/military relations are the least subject to quantification. Somehypotheses on these relations, based upon the extensive literature on civil/military relations,were outlined in Sec. II. Since reliable measurement is difficult in this realm, our goal is anextdmination of central tendencies, to see if they are roughly consistent with our findings forthe first three military dimensions.

As noted in Sec. II, we can disaggregate the concept of civil/military relations into thefollowing components:

" The influence of the military in political affairs, including the choice of politicalleadership.

* Relative military/civilian pay, in-kind compensation, and perquisites." The extent of military involvement in the economy.* The degree of political indoctrination of the military.

Because civil/military relations, as well as the literature describing them, are so qualita-tive, the literature barely controls for differences in culture, history, and other importantparameters. One crude way to do that is with nation pairings, and the information found inthe literature allows a few interesting ones. Table 65 presents some crude judgments orevaluations for four pairings with respect to the four components of civil/military relationslisted above.

Whatever the political influence of the U.S. military, it seems clear that it is not higherthan that of the Soviet military. Similarly, total compensation for U.S. officers, as a roughapproximation, is about what it would be in comparable civil pursuits. 71 Voslensky notes thesuperior compensation paid Soviet officers. 72 A jpzll of Moscow youth, described in SovietAnalyst (September 16, 1987), listed the military third among 20 occupations in which it is

Table 65

COMPARATIVE CIVIL/MILITARY RELATIONS

Political Relative Involvement PoliticalNation Influence Pay Ratio in Economy Indoctrination

United States low -1 low lowUSSR medium -1 high high

India low - I low lowChina high 1 high high

FRG low -1 low lowGDR high? -1 ? high

South Korea high .1? medium mediumNorth Korea high ? high

7 See William T. Mickelson, Civilian Income of Military Reservists: Data from the 1986 Reserve Components Sur-veys, The RAND Corporation, N-2734-FMP/RA, May 1988. See also the annual editions of the Uniformed ServicesAlmanac.

72See Voslensky, fn. 18 above.

89

90

purportedly easiest to earn high incomes. (Only "currency dealer" and "speculator" wereranked higher than the military.) Sadykiewicz argues that all Soviet officers are members of

the Nomenklatura.7 3 And it is clear that both the involvement of the Soviet military in theeconomy and the degree of political indoctrination to which it is exposed are far greater thanfor the IT.';. military. 7

The political influence of the Chinese military exceeds that of the Indian military sub-stantially. 75 In China, a military career increases the opportunity for membership in the Com-munist Party, thus increasing material and career opportunities.76 There is little evidence, onthe other hand, that Indian officers can do markedly better than their civilian counterparts.

Involvement in the economy by the Indian military is limited largely to emergency activities;involvement by the Chinese military is extensive.77 Finally, political indoctrination is a centralfeature of Chinese military activity, whereas it is not for the Indian military.

Whatever the level of political influence of the FRG military, that of the GDR military is

likely to be higher. Johnson et al., note that the peculiar history of the East German state hasproduced a military without an historical tradition. Thus, "the nation" cannot provide a focusfor military loyalty as it does in other nations. Instead, the Communist Party serves as a sub-

stitute, and "ideology and indoctrination ... (provide the) source of cohesion, discipline, andmorale."78 FRG officers do not receive compensation substantially greater than their civilian

counterparts, their GDR counterparts do.79 The involvement of the FRG military in the

economy is low: there is little information available for the GDR. Finally, political indoctrina-tion is far higher in the GDR military than that of the FRG.

Finally, the political influence of the South Korean military is high, although the effect ofthe ongoing political evolution remains to be seen. Winn argues that the influence of theNorth Korean military is high as well."0 There have been some reports of South Korean offi-

cers expanding their military careers into lucrative business ventures;8 1 no information is avail-able on the compensation available to North Korean officers, although it may be reasonable toassume that their rewards exceed those available in civilian life. The South Korean military

has played an important role in development of the national infrastructure; no information isavailable on the extent to which the North Korean military participates in economic activities.Finally, while the South Korean military is subjected to some political indoctrination,8 2 itwould be surprising if the amount directed at the North Korean military were not substantially

greater.

The evaluations presented in Table 65 are crude, and deal with only a small subset of oursample of Communist and non-Communist nations. The evidence is sufficiently qualitative

and murky that no firm conclusions with respect to civil/military relations in Communist and

' 'Michael Sadvkiewicz, Vomenklatura in the USSR and Poland: Components, Strength, and Distribution, unpub-lished manuscript. November 1986.

-'See Strode, as well as Scott and Scott, fn. 32 above._ See Sheikh, fn. 28 above, and Glynn L. Wood, "Civil-Military Relations in Post-Colonial India," in Olsen and

,Jurika (eds.), fn. 31 above.,6See Dreyer, fn. 28 above.77See Dreyer, fn. 28 above, and Wood, fn. 75 above.78See Johnson et al., fn. 33 above.'9Johnson et al., fn. 33 above; and discussions with A. Ross Johnson.'"See Gregory F. T. Winn, "North Korea: A Garrison State," in Olsen and Jurika (eds.), fn. 31 above.'14See Edward A. Olsen, "The Societal Role of the ROK Armed Forces," in Olsen and Jurika (eds.), fn. 31 above.5 2

fbid

91

non-Communist states arc warranted. At a minimum, however, the evidence provided by the

literature is not sharply at odds with either our hypotheses in Sec. II, or with the empirical evi-

dence in Secs. IV through VII.

IX. CONCLUSIONS AND FURTHER ISSUES

The available data do not allow tests of each of the individual hypotheses on Communismand development of military dimensions presented in Sec. 11. However, the quantitative andqualitative empirical evidence in Secs. IV through VIII is sufficiently robust and consistent asto allow acceptance of the hypotheses as a group.

The evidence shows that Communist states develop their military dimensions to a degreegreater than either their own nonmilitary dimensions or the military dimensions of non-Communist states. The data suggest that Communist systems display spending burdens higherthan those of non-Communist systems by 3 percent of GNP, and manpower proportions thatare higher by 0.5 percent of total population. The findings on military and civil technology,while crude, are consistent with the findings on spending burden and manpower proportion.No firm conclusions can be derived from the qualitative review of civil/military relations inCommunist and non-Communist states, but the observations from the literature at a minimumare not inconsistent with the findings on the first three military dimensions.

A full exploration of the policy implications of these findings lies beyond the scope of thisstudy. However, the findings do suggest implications for behavioral changes if a given nationshifts from non-Communist to Communist, or vice versa. And the findings raise further ques-tions which may be appropriate topics for new research. They can be summarized as follows.

" Does the relative overdevelopment of military dimensions displayed by Communistsystems imply a uniquely powerful position for the military? In other words, do mili-tary interest groups enjoy powerful positions in Communist systems, or do otherimportant interest groups display high demands for "militarization?" Insights intothis distinction may carry important implications for pursuit of negotiations withCommunist systems.

" How can negotiations with Communist states reflect the apparent importance to themof miitary considerations? For example, should negotiating positions taken by theUnited States take account of the ultimate effects on important military considera-tions?

* Do the findings suggest ways of structuring the ongoing competition with Communistsystems? Do those systems display certain comparative disadvantages, and if so, arethere ways of lending them more prominence?

" How can we measure the true total economic cost of the military efforts of Communistsystems? If, for example, ostensibly civil production is designed in part to serve mili-tary needs, how can estimates of the total resource cost be constructed?

* More generally, should we change the ways in which we analyze Communist systems?For example, in addition to the standard examination of personalities and conflictswithin ruling hierarchies, should we attempt more often to estimate empirically thecentral tendencies emanating from the very nature of Communism as a political andeconomic system?

This list is far from exhaustive. But the issues are important, and illustrate the potentialbenefits of further inquiry into the behavior of Communist states.

92

Appendix A

DATA SOURCES FOR SPENDING BURDEN

Spending burden is military spending as a proportion of Gross National Product, whereboth the numerator and denominator are measured in local currency. The data sources are asfollows:

Soviet Union: GNP in billions of 1970 rubles for 1966-1980 was obtained from theJoint Economic Committee, USSR: Measures of Economic Growth and Development, 1950-80,December 8, 1982. Real growth rates for GNP for 1980-1984 were obtained from the CentralIntelligence Agency, Handbook of Economic Statistics, 1985. This yielded a series for real GNPin 1970 rubles for 1966-1984. A consumer price index for 1970 (= 100.0), 1975, and 1980-1984was obtained from the 1985 Handbook. An implicit price deflator for GNP was obtained for1966-1980 from the CIA, Soviet Gross National Product in Current Prices, 1960-80, March1983. These series yielded nominal GNP in billions of rubles for 1966-1984. Defense spendingin 1982 rubles for 1982 was obtained by multiplying the CIA/DIA estimate of 1982 ruble GNPby 0.16. (See CIA/DIA, The Soviet Economy Under a New Leader, March 19, 1986, pp. 33, 35,and 37.) A 3 percent growth rate was applied to the 1982 figure to obtain a series from1966-1984. (CIA/DIA, p. 37.) Beginning in 1978, a 2 percent growth rate was applied toobtain reduced figures for 1978-1984, reflecting the apparent slowdown in the growth of Sovietdefense spending. (See Abraham S. Becker, Sitting on Bayonets: The Soviet Defense Burdenand the Slowdown of Societ Defense Spending, RAND/UCLA Center for the Study of SovietInternational Behavior, December 1985, p. 10.) The deflator described above was used to con-vert the defense spending figures from 1982 rubles to nominal rubles; and the nominal defensespending figures were divided by the nominal GNP figures to obtain our ratio for spending bur-den.

PRC: GNP in billions of current yuan for 1957, 1978, 1984, and 1985 was obtained fromTongi (Statistics). No. 6, 1985, and from Jingji ribao (Economic Daily), March 1, 1986. Netmaterial product in billions of current yuan was obtained from the 1985 Statistical Yearbook ofChina (State Statistical Bureau). Those series yielded figures on the ratio of GNP to netmaterial product, which was applied to the net material product series to obtain a GNP seriesfor the entire sample period. Defense spending in 1974 yuan was obtained for 1967-1983 fromDIA, Chinese Estimated Expenditurcs, 1967-83, November 1984. A price index was obtainedfrom the 1985 Statistical Yearboci, which yielded defense spending in nominal yuan. Spendingburden then was computed from the two series.

Bulgaria: GNP and military spending data in nominal leva were obtained from Thad P.Alton of L. W. Internallonal Financial Research, Inc., New York.

Czechoslovakia: Data obtained from Alton.GDR: Data obtained from Alton.Hungary: Data obtained from Alton.Poland: Data obtained from Alton.Romania: Data obtained from Alton.Albania: Data obtained from IISS, The Military Balance, various issues; ACDA, World

Military Expenditures and Arms Transfers, various issues; and Stockholm International PeaceResearch Institute (SIPRI), World Armaments and I)isarmnamrent, various issues.

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94

Yugoslavia: (ross material product , btained 'r min Alton was then converted t(, NPusing the GNP/(NIP ratio for 1976. Mlilitary .pending was o)btained trm S11. and frmiSIPRI. various issues.

Afghanistan: Data on net material product. gros dmiest ic product. and (GNPl wereobtained from IISS. SIPRI. and the World Bank. World Johl'cs. 1980. A deflator was btainedfrom the International Monetary Fund, In t'r tionul Financial >'trltistiks. 1985. These datawere used to derive a nominal GNP series. Military spending was obtained front I1SS andSIPRI. various issues.

South Yemen: Both GNtP and military spending were obtained from IISS and SIPRI,various issues.

Angola: GNP data obtained from the World Bank: military expenditure data obtainedfrom Daniel Kohler of The RAND Corporation.

Benin: GNP data obtained from the World Bank: military expenditure data obtainedfrom Kohler.

Congo: GNP data obtained fromn the World Bank: military spending data obtained fromSIPRI and from Professor Robert L. West. Development and Security Project. Fletcher Schoolof Law and Diplomacy.

Ethiopia: GNP series obtained from the IMF: military spending series obtained fromSIPRI.

Guinea: GNP data obtained from the World Bank: military spending data obtainedfrom Kohler.

Guinea-Bissau: GNP data (htained from the World Bank; military spending dataobtained from Kohler.

Mozambique: GNP date, obtained from the World Bank; military expenditure dataobtained from Kohler and West.

Somalia: GNP data obtained from the World Bank; military spending data obtainedfrom SIPRI.

Cuba: Data on gross domestic product and military spending obtained from West.Nicaragua: GNP obtained from the IMF: military spending obtained from SIPRI.Cambodia: Data on GNP and military spending in dollars obtained from ACDA.Laos: Data on GNP and military spending in dollars obtained from ACDA.North Korea: Data on GDP and military expenditure obtained from West.Vietnam: Data (through 1975) on GNP and military spending obtained from ACDA (in

dollars), and IISS.United States: GNP data obtained from the Annual Report of the Council of Economic

Adcisers, various issues. Military expenditure data obtained from the Office of Managementand Budget, The Budget of the U.S. Gocernment.

Belgium: GNP data were obtained from the IMF; military expenditure data obtainedfrom SIPRI.

Britain: Same as for Belgium.Denmark: Same as for Belgium.Finland: Same as for Belgium.France: Same as for Belgium.FRG: Same as for Belgium.Greece: Same as for Belgium.Ireland: Same as for Belgium.

, 5

Italy: Same as for Belgium.Netherlands: Same as for Belgium.Norway: Same as for Belgium.Portugal: Same as for Belgium.Spain: Same as for Belgium.

Sweden: Same as for Belgium.Switzerland: Same as for Belgium.Turkey: Same as for Belgium.Colombia: Same as fo)r Belgium.Costa Rica: Same as for Belgium.Dominican Republic: Same as for Belgium.El Salvador: Same as for Belgium.Guatemala: Same as for Belgium.Honduras: Same as for Belgium.Jamaica: Same as for Belgium.Panama: Same as for Belgium.Botswana: GNP data obtained from the World Bank; military spending data obtained

from Kohler.Burkina Faso: GNP data obtained from the World Bank; military spending data

obtained from Kohler.Cameroon: GNP data obtained from the World Bank; military spending data obtained

from SIPRI.Central African Republic: GNP data obtained from the World Bank: military spend-

ing data obtained from SIPRI, West, and Kohler.Chad: GNP data obtained from the World Bank; military spending data obtained from

SIPRI, West, and Kohler.Ghana: GNP data obtained from the IMF; military expenditure data obtained from

West.Ivory Coast: GNP data obtained from the World Bank; military spending data obtained

from SIPRI.Kenya: GNP data obtained from the IMF; military spending data obtained from West.Madagascar: GNP obtained from the World Bank; military expenditure obtained from

West.Mali: GNP data obtained from the World Bank; military spending data obtained from

SIPRI and West.Niger: GNP data obtained from the World Bank; military spending data from West.Nigeria: GNP data obtained from tho IMF; military spending data from SIPRI.Senegal: GNP data obtained from the World Bank; military spending data from SIPRI.Sierra Leone: GNP data obtained from the IMF; military spending data from West.South Africa: GNP data obtained from the IMF; military spending data from SIPRI.Sudan: GNP data obtained from the IMF and World Bank; military spending data from

SIPRI.Tanzania: GNP data obtained from the IMF; military spending data from West.Togo: GNP data obtained from the World Bank; military spending data from SIPRI.Zaire: GNP data obtained from the IMF; military spending data from SIPRI.Zimbabwe: Same as for Zaire.

96

Egypt: Same as for Zaire.Iran: Same as for Zaire.Iraq: GNP data from the IMF and the United Nations, National Accounts Statistics:

Main Aggregates and Detailed Tables, 1983. Military spending data from SIPRI.Israel: GNP data obtained from the World Bank and the United Nations; military

expenditure from SIPRI.Jordan: Same as for Zaire.

Libya: Same as for Iraq.Syria: Same as for Zaire.North Yemen: Same as for Zaire.

Bangladesh: Same as for Zaire.Burma: Same as for Israel.India: Same as for Zaire.Japan: Same as for Zaire.South Korea: Same as for Zaire.Pakistan: Same as for Zaire.Philippines: Same as for Zaire.Taiwan: GNP data obtained from the World Bank and West; military spending from

SIPRI.Thailand: Same as for Zaire.South Vietnam: Data (in dollars) obtained from ACDA.

Appendix B

BORDER PROPORTIONS USED IN DERIVATION OFTHE THREAT VARIABLES

It was noted in Sec. V that one of' the weights used in construction of the threat variableswas the proportion of the given nation's total borders shared with the neighbor in question.Adjustments to these border proportions were made in the interest of greater realism. Beloware the border proportions used for each of the nations in our sample. Total proportions for anation may not sum to 1.0 because the nation may border on an ocean or because a giventhreat was added or ignored in the interest of greater realism.

Albania: Yugoslavia, 0.3; Greece, 0.2.Bulgaria: Greece, 0.2; Turkey, 0.1; Yugoslavia, 0.25.Czechoslovakia: FRG, 0.15; Soviet Union, 0.05.GDR: FRG, 0.4; United States, 0.1.Hungary: FRG, 0.2; Soviet Union, 0.07; Yugoslavia, 0.25.Poland: Soviet Union, 0.4, GDR, 0.15; Czechoslovakia, 0.25.Romania: Soviet Union, 0.4; Bulgaria, 0.2; Yugoslavia, 0.15.Soviet Union: Norway, 0.1; Finland, 0.03; Poland, 0.03; Czechoslovakia, 0.01; Hungary,

0.01; Romania, 0.03; Turkey, 0.03; Iran, 0.05; China, 0.2; Afghanistan, 0.05; North Korea, 0.01;FRG, 0.2; United States, 0.5.

Yugoslavia: Albania, 0.07: Greece, 0.07; Bulgaria, 0.15; Romania, 0.15; Hungary, 0.15;Italy, 0.03.

Angola: Zaire, 0.75.Benin: Togo, 0.4: Burkina Faso, 0.08; Niger, 0.08; Nigeria, 0.4.Congo: Cameroon, 0.1; Central African Republic, 0.1; Zaire, 0.5.Ethiopia: Sudan. 0.3; Kenya, 0.15; Somalia, 0.4.Guinea: Senegal, 0.1: Mall, 0.1; Ivory Coast, 0.15; Sierra Leone, 0.2.Guinea-Bissau: Senegal, 0.33: Guinea, 0.33.Mozambique: South Africa, 0.1; Zimbabwe, 0.15; Tanzania, 0.1.Somalia: Kenya, 0.15; Ethiopia, 0.3.South Africa: Mozambique, 0.1; Zimbabwe, 0.1; Botswana, 0.3.South Yemen: North Yemen, 0.15; Oman, 0.15; Saudi Arabia, 0.25.Afghanistan: Iran, 0.21; Soviet Union, 0.35; PRC, 0.01; Pakistan, 0.4.Cambodia: Thailand, 0.35; Laos, 0.1; Vietnam, 0.4.PRC: Vietnam, 0.04: India, 0.04; Soviet Union, 0.3.North Korea: South Korea, 0.15; PRC, 0.3; Soviet Union, 0.05.Laos: Cambodia, 0.05; Thailand, 0.4; Burma, 0.05; PRC, 0.05; Vietnam, 0.45.Vietnam: Uinited States (until 1975), 0.1; PRC (after 1975), 0.15.Cuba: United States, 0.2.Nicaragua: Honduras, 0.3: Costa Rica, 0.15.Belgium: GDR, 0.2.Britain: Ireland, 0.05.

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98

Denmark: GDR, 0.3; Poland, 0.2.Finland: Soviet Union, 0.4.France: GDR, C.15, FRG, 0.2: Soviet Union, 0.05.FRG: GDR, 0.3: Czechoslovakia, 0.1: Soviet Union, 0.1,Greece: Bulgaria. 0.2: Turkey, 0.05.Ireland: Britain, 0.15.Italy: Yugoslavia, 0.02.Netherlands: FRG, 0.35: GDR, 0.2.Norway: Soviet Union, 0.05.Portugal: Spain, 0.5.Spain: France, 0.1; Portugal, 0.3.Sweden: Soviet Union, 0.05.Switzerland: Italy., 0.35: France, 0.3; FRG, 0.25.United States: Soviet Union, 0.5.Colombia: Panama, 0.1.Costa Rica: Panama, 0.15: Nicaragua, 0.25.Dominican Republic: Haiti, 0.35.El Salvador: Guatemala, 0.2; Honduras, 0.4.

Guatemala: Mexico. 0.5; Honduras, 0.15; El Salvador, 0.05.Honduras: Guatemala, 0.1; El Salvador, 0.1; Nicaragua, 0.35.Jamaica: none (island).Panama: Costa Rica, 0.1: Colombia, 0.1.Botswana: South Africa, 0.4; Zimbabwe, 0.2.Burkina Faso: Benin, 0.05; Togo, 0.02; Ghana, 0.2: Ivory Coast, 0.2; Mali, 0.3; Niger, 0.2.Cameroon: Nigeria, 0.25; Chad, 0.2; Central African Republic, 0.2; Congo, 0.15; Gabon, 0.1.Central African Republic: Cameroon, 0.2; Chad, 0.25; Sudan, 0.25; Zaire, 0.2; Congo, 0.1.Chad: Cameroon, 0.15; Nigeria, 0.05; Niger, 0.2; Libya, 0.2; Sudan, 0.2; Central African

Republic, 0.2.Ghana: Ivory Coast, 0.25: Burkina Faso, 0.25; Togo, 0.25.Ivory Coast: Liberia, 0.15; Guinea, 0.15; Mali, 0.15; Burkina Faso, 0.1; Ghana, 0.2.Kenya: Uganda, 0.2: Sudan, 0.05: Ethiopia, 0.2; Somalia, 0.2; Tanzania, 0.2.Madagascar: none (island).Mali: Ivory Coast, 0.05; Guinea, 0.1; Senegal, 0.05; Mauritania, 0.35; Algeria, 0.25; Niger,

0.1; Burkina Faso, 0.1.Niger: Benin, 0.05; Burkina Faso, 0.1; Mali, 0.15; Algeria, 0.2; Libya, 0.1; Chad, 0.2;

Nigeria, 0.2.

Nigeria: Benin, 0.15; Niger, 0.35; Cameroon, 0.35.Senegal: Guinea-Bissau, 0.2; Mauritania, 0.3; Mali, 0.15; Guinea, 0.15.Sierra Leone: Guinea, 0.55; Liberia, 0.2.Sudan: Ethiopia, 0.25: Kenya, 0.03; Uganda, 0.05; Zaire, 0.07: Central African Republic,

0.15; Chad, 0.15; Libya, 0.05; Egypt, 0.15.

Tanzania: Uganda, 0.02; Kenya, 0.2; Mozambique, 0.15: Zaire, 0.2.Togo: Ghana, 0.45; Burkina Faso, 0.05; Benin, 0.45.Zaire: Zambia, 0.2; Angola, 0.2; Congo, 0.15; Central African Republic, 0.15; Sudan, 0.05;

Uganda, 0.05; Tanzania, 0.15.Zimbabwe: South Africa, 0.1; Botswana, 0.25; Zambia, 0.25; Mozambique, 0.4.

99

Bangladesh: India, 0. 75: Burmia. (0.5Burma: Bangladlesh, 0.02: India, 0.15: PRC, 0.25; Thailand, 0.25: Laos, 0.03.India: Pakistan, 0.1: P1W. 0.1: Bangladesh, 0.1: Burmia, 0.08.Japan: none I island).South Korea: North Korea, 0,1.5.Pakistan: Iran, 0.15: P)RC, 0.15; IndIia, 0.3: Sovilet U nion. 0.1.Philippines: none (Island).South Vietnam (until 1975): North Vietnam. Oi.Taiwan: P1W, ().1.Thailand: Malavsia. 0.1: Hurnia, 0.3: Laos-, 0.25: Camb~odia, (0.1.Egypt: Liy,0.25: Israel. 0.05: Sudan, 0.25.Iran: Iraq, 0.2; Turkey, 0.0;5: Soviet Union, 0.25: Pakistan, 0.1.Iraq: Iran, 0.3: KU"wait, 0.04: Saudi Arabia, 0.25: .Jordan, 0.05: Syria, 0.2; T'urkey, 0.1.Israel: Egypt, 0.3: Syria, 0.1: .Jordan, 0.2: Iraq, 0.1.Jordan: Israel, 0.25; Syria, 0.2: Iraq, 0.1.Libya: Egypt, 0.15: Sudan, 0.05: Chad, 0.15: Niger, 0.05; Algeria, 0.15: Tunisia, 0.05.Syria: Israel, 0.02: Turkey., 0.3; Iraq, 0.3: .Jordan, 0.15.North Yemen: South Yemnen. 0.35.Turkey: Soviet Union, 0.1: Iran. (1.1; Iraq, 0.05; Syria, 0.1: Greece, 0.05: Bulgaria, 0.05.