This study explores whether the level of military expenditures is affected by the occurrence of elections. From a theoretical perspective, it is not immediately clear whether, and if so, in which direction, upcoming elections shift military expenditures. On the one hand, the incumbent may try to enhance the likelihood of being re-elected by supporting the domestic defense industry. On the other hand, it might be more attractive to cut defense spending and increase non-defense spending. It is also possible that both effects coexist. We therefore apply the finite mixture model (FMM), which is able to test competing hypotheses. Our results, based on a panel of 93 democratic countries between 1980 and 2018 and Stockholm International Peace Research Institute (SIPRI) data on military spending, yield support for both hypotheses. Countries facing security risks or having a significant defense industry are most likely to expand their defense spending in an election year, while other countries are more likely to reduce their defense expenditure.
BagozziB. E.BrawnerT.MukherjeeB.YadavV. (2014). Regional international organizations and individual immigration attitudes: Results from finite mixture models. International Interactions, 40(3), 350–375.
2.
BarroR.De RugyV. (2013). Defense spending and the economy. Mercatus Center at George Mason University.
3.
BeckerJ. (2021). Rusty guns and buttery soldiers: Unemployment and the domestic origins of defense spending. European Political Science Review, 13(3), 307–330.
4.
BeckerJ.DunneJ. (2023). Military spending composition and economic growth. Defence and Peace Economics, 34(3), 259–271.
5.
BeckleyM. (2018). The power of nations: Measuring what matters. International Security, 43(2), 7–44.
6.
Beiser-McGrathJ.Beiser-McGrathL. F. (2023). The consequences of model misspecification for the estimation of nonlinear interaction effects. Political Analysis, 31(2), 278–287.
7.
BerryW. D.GolderM.MiltonD. (2012). Improving tests of theories positing interaction. The Journal of Politics, 74(3), 653–671.
8.
BonicaA.CoxG. W. (2018). Ideological extremists in the US Congress: Out of step but still in office. Quarterly Journal of Political Science, 13(2), 207–236.
9.
BoveV.EfthyvoulouG.NavasA. (2017). Political cycles in public expenditure: Butter vs guns. Journal of Comparative Economics, 45(3), 582–604.
10.
BoveV.NisticoR. (2014). Military in politics and budgetary allocations. Journal of Comparative Economics, 42(4), 1065–1078.
BrenderA. (2018). Government ideology and arms exports (Institute of Law and Economics Working Paper 21). University of Hamburg, Institute of Law and Economics.
13.
BrenderA.DrazenA. (2005). Political budget cycles in new versus established democracies. Journal of Monetary Economics, 52, 1271–1295.
14.
Bueno de MesquitaB.MorrowJ. D.SiversonR. M.SmithA. (1999). An institutional explanation of the democratic peace. The American Political Science Review, 93(4), 791–807.
15.
ButsC.BoisC. D.RaesS. (2017). Political cycles in military deployment. Peace Economics, Peace Science and Public Policy, 23(4), 20170025.
16.
Canes-WroneB.KistnerM. R. (2022). Out of step and still in Congress? Electoral consequences of incumbent and challenger positioning across time. Quarterly Journal of Political Science, 17(3), 389–420.
17.
ChenC. H.HärdleW.UnwinA.LeischF. (2008). Visualizing cluster analysis and finite mixture models. In ChenC. H.HärdleW.UnwinA. (Eds.), Handbook of data visualization (pp. 561–587). Springer.
18.
CusackT. R.WardM. D. (1981). Military spending in the United States, Soviet Union, and the People’s Republic of China. Journal of Conflict Resolution, 25(3), 429–469.
19.
De HaanJ.KlompJ. (2013). Conditional political budget cycles: A review of recent evidence. Public Choice, 157, 387–410.
20.
DempsterA. P.LairdN. M.RubinD. B. (1977). Maximum likelihood from incomplete data via the EM algorithm. Journal of the Royal Statistical Society: Series B (Methodological), 39(1), 1–22.
21.
Di VaioG.EnfloK. (2011). Did globalization drive convergence? Identifying cross-country growth regimes in the long run. European Economic Review, 55(6), 832–844.
22.
DrazenA.EslavaM. (2010). Electoral manipulation via voter-friendly spending: Theory and evidence. Journal of Development Economics, 92(1), 39–52.
23.
DuboisE. (2016). Political business cycles 40 years after Nordhaus. Public Choice, 166(1), 235–259.
24.
EfthyvoulouG. (2012). Political budget cycles in the European Union and the impact of political pressures. Public Choice, 153(3–4), 295–327.
25.
FleisherR. (1993). PAC contributions and congressional voting on national defense. Legislative Studies Quarterly, 18, 391–409.
26.
FranzeseR. J. (2000). Electoral and partisan manipulation of public debt in developed democracies, 1956–90. In StrauchR. A.von HagenJ. (Eds.), Institutions, politics and fiscal policy (pp. 61–83). Kluwer Academic.
27.
FranzeseR. J. (2002). Electoral and partisan cycles in economic policies and outcomes. Annual Review of Political Science, 5(1), 369–421.
28.
GriffithsZ.SimonO. (2021). Not putting their money where their mouth is: Retired flag officers and presidential endorsements. Armed Forces & Society, 47(3), 480–504.
29.
HainmuellerJ.MummoloJ.XuY. (2019). How much should we trust estimates from multiplicative interaction models? Simple tools to improve empirical practice. Political Analysis, 27(2), 163–192.
30.
HallerbergM.BasingerS. (1998). Internationalization and changes in tax policy in OECD countries: The importance of domestic veto players. Comparative Political Studies, 31(3), 321–352.
31.
HawkinsD. S.AllenD. M.StrombergA. J. (2001). Determining the number of components in mixtures of linear models. Computational Statistics & Data Analysis, 38(1), 15–48.
32.
HeidenkampH.LouthJ.TaylorT. (2015). The defence industrial triptych: Government as a customer, sponsor and regulator of defence industry. Routledge.
33.
HeniszW. J. (2004). Political institutions and policy volatility. Economics & Politics, 16(1), 1–27.
34.
HunterL. Y.RobbinsJ. W. (2016). Military spending and electoral systems: A reconsideration. Armed Forces & Society, 42(1), 51–74.
35.
ImaiK.TingleyD. (2012). A statistical method for empirical testing of competing theories. American Journal of Political Science, 56(1), 218–236.
36.
JervisR. (2017). How statesmen think. Princeton University Press.
37.
KamletM. S.MoweryD. C. (1987). Influences on executive and congressional budgetary priorities, 1955–1981. American Political Science Review, 81(1), 155–178.
38.
KimJ. H. (2019). Is your playing field unleveled? US defense contracts and foreign firm lobbying. Strategic Management Journal, 40(12), 1911–1937.
39.
KlompJ. (2023). Political budget cycles in military expenditures: A meta-analysis. Economic Analysis and Policy, 77, 1083–1102.
40.
KlompJ.de HaanJ. (2016). Election cycles in natural resource rents: Empirical evidence. Journal of Development Economics, 121, 79–93.
41.
KneeboneR. D.McKenzieK. J. (2001). Electoral and partisan cycles in fiscal policy: An examination of Canadian provinces. International Tax and Public Finance, 8, 753–774.
42.
KuokštytėR.KuokštisV.MiklaševskajaI. (2021). External and domestic political determinants of defence spending: A time-series cross-section analysis of EU member states. European Security, 30, 197–217.
43.
LeeC. C.WangE. Z. (2021). Economic complexity and income inequality: Does country risk matter?Social Indicators Research, 154, 35–60.
44.
LiuG.LeeC. C.LiuY. (2020). Growth path heterogeneity across provincial economies in China: The role of geography versus institutions. Empirical Economics, 59, 503–546.
45.
LizzeriA.PersicoN. (2001). The provision of public goods under alternative electoral incentives. American Economic Review, 91(1), 225–239.
46.
LuechingerS.MoserC. (2014). The value of the revolving door: Political appointees and the stock market. Journal of Public Economics, 119, 93–107.
47.
MarinovN.NomikosW. G.RobbinsJ. (2015). Does electoral proximity affect security policy?The Journal of Politics, 77(3), 762–773.
48.
MayerK. R. (1992). Elections, business cycles, and the timing of defense contract awards in the United States. In MintzA. (Ed.), The political economy of military spending in the United States (pp. 15–32). Routledge.
49.
MayerK. R. (1995). Electoral cycles in federal government prime contract awards: State-level evidence from the 1988 and 1992 presidential elections. American Journal of Political Science, 39, 162–185.
50.
Milesi-FerrettiG. M.PerottiR.RostagnoM. (2002). Electoral systems and public spending. The Quarterly Journal of Economics, 117(2), 609–657.
51.
MintzA. (1988). Electoral cycles and defense spending: A comparison of Israel and the United States. Comparative Political Studies, 21(3), 368–381.
52.
MooreM. (2010). Arming the embargoed: A supply-side understanding of arms embargo violations. Journal of Conflict Resolution, 54(4), 593–615.
53.
MorduchJ.SternH. S. (1997). Using mixture models to detect sex bias in health outcomes in Bangladesh. Journal of Econometrics, 77(1), 259–276.
54.
NincicM.CusackT. R. (1979). The political economy of US military spending. Journal of Peace Research, 16(2), 101–115.
55.
NordhausW. D. (1975). The political business cycle. The Review of Economic Studies, 42(2), 169–190.
56.
OwenA. L.ViderasJ.DavisL. (2009). Do all countries follow the same growth process?Journal of Economic Growth, 14, 265–286.
57.
PeltzmanS. (1992). Voters as fiscal conservatives. The Quarterly Journal of Economics, 107(2), 327–361.
58.
PerssonT.TabelliniG. (2002). Do electoral cycles differ across political systems?Institute for International Economic Studies, Stockholm University.
59.
PerssonT.TabelliniG. (2003). The economic effect of constitutions. MIT Press.
60.
PotrafkeN. (2010). The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?Journal of Health Economics, 29, 797810.
61.
RichardsonD. K. (2022). The electoral impact of military experience: Evidence from U.S. Senate elections (1982–2016). Armed Forces & Society, 48(4), 961–981.
62.
RogoffK.SibertA. (1988). Elections and macroeconomic policy cycles. The Review of Economic Studies, 55(1), 1–16.
63.
RundquistB. S. (1978). On testing a military industrial complex theory. American Politics Quarterly, 6(1), 29–53.
64.
ScartasciniC.CruzC.KeeferP. (2021). The database of political institutions 2020. Banco Interamericano de Desarrollo.
65.
ShiM.SvenssonJ. (2006). Political budget cycles: Do they differ across countries and why?Journal of Public Economics, 90(8–9), 1367–1389.
66.
SimonC. A.LovrichN. P.LiuB.WeiY. D. (2018). Citizen support for military expenditure post–9/11: Exploring the role of race, ethnicity, and place of birth. Armed Forces & Society, 44(4), 688–706.
67.
StrebJ. M.LemaD.TorrensG. (2009). Checks and balances on political budget cycles: Cross-country evidence. Kyklos, 62(3), 426–447.
68.
StrebJ. M.TorrensG. (2013). Making rules credible: Divided government and political budget cycles. Public Choice, 156, 703–722.
69.
SuT. T.KamletM. S.MoweryD. C. (1993). Modeling U.S. budgetary and fiscal policy outcomes: A disaggregated, systemwide perspective. American Journal of Political Science, 37, 213–245.
70.
TripathiM. (2000). PAC contributions and defense contracting. Business and Politics, 2(1), 53–73.
71.
TufteE. R. (1978). Political control of the economy. Princeton University Press.
72.
Van HornM. L.JakiT.MasynK.HoweG.FeasterD. J.LamontA. E.GeorgeM. R. W.KimM. (2015). Evaluating differential effects using regression interactions and regression mixture models. Educational and Psychological Measurement, 75(4), 677–714.
73.
WangE. Z.LeeC. C. (2023). Foreign direct investment, income inequality and country risk. International Journal of Finance & Economics, 28, 2415–2435. https://doi.org/10.1002/ijfe.2542
74.
YaltaA. T.TüzünF. (2021). Time varying determinants of US demand for defense spending in the post-Cold War era. Defence and Peace Economics, 32(7), 829–846.
75.
ZhirkovK. (2021). Estimating relative prevalence of competing issue voting rules in multiparty elections using finite mixture modeling. Electoral Studies, 69, 102249.
76.
ZukG.WoodburyN. R. (1986). US defense spending, electoral cycles, and Soviet-American relations. Journal of Conflict Resolution, 30(3), 445–468.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
