Military spending is intimately linked to war. In times of peace, few countries spend more than 5% of GDP on their military, choosing instead to maintain their capabilities and make use of their armies in other ways.
Empirical View
Historical Perspective
There are two ways in which we might want to measure military spending; the first way is spending in real terms and the second is as a percentage of GDP. Military expenditure in real terms is important since the absolute level of expenditure matters for the outcome of war. The US spending 10% of its GDP fighting a war is likely to defeat a low or middle income country spending 50% or more of its GDP. Yet, military expenditure as a percentage of GDP allows us to get a handle on the priorities and ambitions of a country.
The military expenditure of a country is largely determined by the whether it is at war or not. Outside of wartime, countries continue to spend substantial sums on maintaining their military capability. Below are two time series plots of military expenditure in real terms; the first is in thousands of 1900 UK pounds for the period 1830-1913, the second is in thousands of 2000 US dollars for the period 1914-2007.
The extent to which war influences military spending is demonstrated in the visualisation below. The UK's military spending as a percentage of GDP in peacetime fluctuates around 2.5%, in times of war however, military spending rises dramatically. At the height of the Second World War, the UK was spending around 53% of its GDP on its military. Such a dramatic rise is consistent with the existential danger faced by the UK during the Second World War.
Military Expenditure Today and in the Future
The following visualisations provide a snapshot of military expenditure in the world today and into the future. World military expenditure in 2014 was dominated by the United States, with the top 5 completed by China, Saudi Arabia, Russia and the United Kingdom. Projections of Military expenditure in 2045 suggest that while the US will continue to be the largest spender, nevertheless China is expected to close the gap considerably.
Top ten military expenditures in US$ Bn., 2014 – International Institute for Strategic Studies1
The following map displays military expenditure as a percentage of GDP. Military spending is particularly high in the Middle East, a region that has experienced dozens of conflicts since the Second World War. Saudi Arabia, Israel, Iraq, Lebanon and Yemen all have very high levels of military expenditure relative to GDP and are all either currently engaged in conflict or have been in recent years. Two other countries that rank highly are Eritrea and North Korea, both of which are in perpetual conflicts with their neighbours Ethiopia and South Korea, respectively. It is estimated that North Korea spends roughly one-third of their national income on defence.2
Projections of defence spending in 2045 - Global Strategic Trends, UK Government (2014)3
Data Sources
Correlates of War Dataset (COW)
- Data: National Material Capabilities (v4.0); military expenditure, personnel
- Geographical coverage: Global
- Time span: 1816-2007
- Available at: http://cow.dss.ucdavis.edu/data-sets/national-material-capabilities
Stockholm International Peace Research Institute (SIPRI)
- Data: SIPRI Military Expenditure Database; "The SIPRI Military Expenditure Database contains consistent time series on the military spending of 171 countries since 1988, and of NATO member states from 1949 or from when they joined NATO. "
- Geographical coverage: Global by country
- Time span: 1949-2014
- Available at: http://www.sipri.org/research/armaments/milex/milex_database
International Historical Statistics (Brian Mitchell)
- Data: National accounts data
- Geographical coverage: Global by country
- Time span: Long time series with annual observations – from 19th century up to today (2010)
- Available at: Online here