The Evolution of Israel's Military Expenditures: 1960-1983

While previous studies of defense spending in developed and less-developed countries have thus far treated defense expenditures, arms transfers, and military aid separately, this study combines and integrates these components into a single model of defense spending. A mathematical, simulation model of Israeli defense spending since 1960 is developed, its parameters estimated using data from official Israeli sources, and its empirical fit evaluated via the dynamic trajectory fitting technique. Over two-thirds of the variance in each of these components is captured by the model. Israeli military expenditures were found to be influenced by security concerns as reflected in the arms race with the Arabs and war involvement and by political and economic variables such as elections, inflation, and military aid. Moreover, the study reveals a strong feedback that permits the domestic budget, military imports and military aid to influence one another jointly.