Democracy, external threat, and military spending

A number of studies find that democracies spend less on their military than non-democracies. Yet there are well known counter-examples, including but not limited to the United States and Israel. We contend that these counter-examples are part of a larger pattern. The relationship between regime type and military spending is conditional on external threat. Among countries that do not perceive a significant external threat to their interests, democracies allocate considerably less to the military than non-democracies. However, democracies with a significant external threat do not allocate less to the military than non-democracies. The reason prior research consistently finds that democracies, on average, spend less on the military, even while controlling for external threat, is that democracies are much less likely to have a high external threat. For example, autocracies are nearly twice as likely as democracies to have a significant external threat in our sample. An empirical analysis of military spending from 1952–2000 is consistent with these expectations.