Time is Ripe to Reduce Global Military Spending

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Time is ripe for initiatives to reduce global military spending. Global military expenditures are at record levels. The current pandemic is a stark reminder of the financial resources needed to prevent and meet future crises. Global military expenditures are a natural source for additional funding. Initiatives for reductions have a better chance to succeed politically if they can be linked to agreements on arms control and disarmament.

Government finances worldwide have been hit hard by the COVID-19 crisis. Economic downturns have reduced taxes. Health costs have risen. Furthermore, the pandemic has revealed major deficits in preparedness which require additional funding for health systems. This has come on top of growing demand for resources to meet other urgent challenges, primarily climate change.

Many governments worldwide are reconsidering their spending priorities. Military expenditure is one of the spending items that needs to come under increased scrutiny.

For a number of reasons, military expenditures are an attractive target for budget rebalancing. First, they are a large item. According to the Stockholm International Peace Research Institute, global military expenditures amounted to US$1,981 billion in 2020, equal to about 2.4 percent of global income. Many states spend more than 10 percent of their total government expenditures on the military; Saudi Arabia and Belarus top the list with spending beyond 30 percent.

Second, military expenditures are a burden to the economy. They are consumption and not investment, meaning that while they provide income and employment now, they do not by themselves contribute to income and employment in the future. Econometric analysis generally confirms that lower spending on the military means higher economic growth.

Third, there is no good measure of the appropriate level of military expenditures. Military expenditure levels are the result of compromises among various politically powerful groups and are therefore subject to change when political priorities, or the influence of particular lobbies, change.

Many governments have cut military expenditures at various points in the past, for instance, after the end of the Cold War. Global military expenditures shrank by more than 30 percent during a time of broad improvements in international security.  But the downward trend has been more than reversed, with global military spending setting records well beyond the highest level of Cold War spending. This leads to an important lesson from the 1990s “disarmament decade”: military expenditure reductions do not necessarily lead to future improvements in security. They need to be linked to appropriate arms control and disarmament agreements to be sustainable. The agreements that were made, for instance on chemical weapons and anti-personnel mines, were valuable but had little consequence for spending levels.

True, some of the spending increases of the new century resulted from new threats, in particular international terrorism. But by far the largest share of spending after the “disarmament decade” continues to be justified by the corresponding efforts of other states. The “security dilemma”, the irony that one state’s effort to improve its security is another state’s military threat, has been in full swing again for some time – in Europe, in the competition between the US and China, and elsewhere.

Imagine if governments had accompanied their military spending cuts in the 1990s with appropriate collaborative agreements. They could have agreed, for instance, on military spending freezes, or future upper limits.

There were three major reasons why this did not happen. One was over-optimism that the days of major military confrontations were largely over. A naïve interpretation of the idea of “the end of history” was widely accepted. Unfortunately, rather than an age of worldwide deterrence, old and new tensions are dominating international relations in Europe and Asia, fed, in major ways, by arms build-ups.

Second, international agreements on reductions of military spending need verifiable data as their basis. The widespread secrecy around military spending and the absence of valid data for a good number of countries was a major reason why earlier efforts for joint military expenditure reductions, for instance in the framework of the United Nations, did not get very far. Unfortunately, transparency of military spending continues to be in short supply in many regions in the world.

A third reason stems from the way in which debates and international practice on arms control have evolved over the last 75 years or so. To the founders of the United Nations, the synergy between reducing the levels of armaments and levels of military spending was obvious. According to Article 26 of the UN Charter, the Security Council is tasked with the promotion of the establishment and maintenance of international peace and security “with the least diversion for armaments of the world's human and economic resources”. The Cold War, with its imminent dangers of nuclear annihilation, made nuclear arms control a priority. Still, cost saving was one of the three elements of arms control, the other two being crisis stability and the reduction of devastation in case of war. Even though the financial objective motivated some Cold War arms control agreements, for instance the Anti-Ballistic Missile Treaty, arms controllers increasingly lost sight of this objective.

Promoters of international military expenditure reductions, whose influence led to a number of regional and global initiatives over the past six decades, often limited their focus to numbers, such as crass contrasts between military expenditure levels and funding of important tasks, such as vaccination or schools. While successful in raising attention, these arguments had limited effect on decision-making by governments.

Three lessons can be derived from earlier failures to reach international agreements on military expenditure reductions.

First, there needs to be a common willingness to consider political détente, in bilateral and regional contexts. Such willingness is often declared but difficult to distil into agreements. But the need to cooperatively prevent future global crisis, such as resulting from climate change or pandemics, might provide the needed impetus to overcome this hurdle.

Second, transparency on military expenditures has to be improved. This requires the standardization of relevant fiscal accounts and effective monitoring of their validity. Steps that were made in this direction in the 1980s need to be strengthened and supplemented.

Finally, governments will need to consider agreements that explicitly link levels of military expenditures with arms control and disarmament. Various combinations of limits of physical items, such as weapons systems, and military spending are possible, and should be negotiated on the basis of improving the security of participants.