Preventing plunder: Military technology, capital accumulation, and economic growth

Joshua R. Hendrickson, Alexander William Salter, Brian C. Albrecht

Research output: Contribution to journalArticlepeer-review

12 Scopus citations

Abstract

A growing body of research highlights the correlation between strong, centralized states and economic growth. Given the important role that national defense has played in the development of the state, it seems as though this would imply some relationship between military expenditures and economic development. However, there is no consensus on the direction of the relationship between military expenditures and economic growth. In this paper, we propose a resolution to this puzzle. We argue that military technology is a limiting factor for wealth (and therefore capital) accumulation. Since wealth must be protected from plunder and/or destruction, the amount of wealth that can be accumulated is constrained by a society's ability to adequately defend it. We present a theoretical model consistent with this idea and perform a Monte Carlo experiment to determine the implications of this hypothesis for empirical work. We find that the long-run relationship between military expenditures and private production is positive. However, in sample sizes consistent with existing data, the relationship is ambiguous. As a result, we provide support for this idea by relying on historical examples consistent with our hypothesis. Finally, we consider the implications of our hypothesis for the development of state capacity.

Original languageEnglish
Pages (from-to)154-173
Number of pages20
JournalJournal of Macroeconomics
Volume58
DOIs
StatePublished - Dec 2018

Keywords

  • Economic growth
  • Military technology
  • National defense

Fingerprint

Dive into the research topics of 'Preventing plunder: Military technology, capital accumulation, and economic growth'. Together they form a unique fingerprint.

Cite this