The Political Economy of Military Spending in Israel

Abstract

Prior scholarly analysis of Israeli military spending has focused on national security questions. We present a mathematical model incorporating security threats as well as electoral cycles and corporate profits. The parameters are estimated empirically. The results support the idea that in Israel the military budget at the margins is also employed as a political-economic instrument to help manage the economy and to provide a favorable election climate for incumbents. It is suggested that the politicaleconomic dynamic widely attributed to Western industrialized societies may be of increasing importance in other societies throughout the world.