Do Elections Cause Military Spending to Go Up or Down? New International Evidence

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.