Inequality in Military Expenditures and the Samuelson Rule

In this paper, we show that standard measures used in the income inequality literature, the Lorenz curve and the associated Gini-index, can successfully be applied to the distribution of defence spending across countries. Secondly, we use the Samuelson rule to explain the distribution of military expenditures across countries over time. According to the constant defence burden interpretation of the Samuelson rule, corresponding to the diagonal in the Lorenz diagram, the defence burdens should be equal across countries. It is shown that about three quarters of the variation in military expenditures can be explained by the Samuelson rule. We then go beyond the Samuelson rule to see which countries spend much more or less than predicted and investigate which other factors may influence the defence burden