Military Spending

You've heard it so often, its just gotta be true:  "The US is the world’s top military spender."

This assertion - I suppose, like any general, sweeping assertion - is problematic.  What do we mean by the "TOP" spender?  The most overall?  The most per person?  "Top" is just not a particularly specific qualifier.

Total Spending

Ok, so the total amount, spent per year is a pretty straightforward concept.  As of late, its been in the high $600 billions per year.
 

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Source

*NOTE - "OCO" = "Overseas Contingency Operations," aka the explicit costs of the Iraq/Pakistan/Afghanistan wars. 

Finding the right context through which to view this number, however, is the tricky part.   How does "high $600 billions" compare to spending by other countries?

 

"More than the next X nations combined"

I see this claim everywhere online (for example).  The X varying depending on year and definition of "military," but its usually in the 7 - 12 range.

No one else in the world spends anything close to what we spend on our military, in nominal, bottom line dollars.

Click to enlarge Source   But is this at all a surprise?

The US is, after all, the world's largest single national economy.  We're the third most populated nation on the planet (after only China and India), and by far the most populated "first world" nation.

The point being: we spend more than everyone else, on just about everything.  Fuel, bubble gum, toilet paper, oil changes, peace rallies...considering the amount of money lying around here, it would newsworthy if there was a nation outspending the US (in bottom line cash amounts) on anything.

A disproportionately ginormous share of the world's disposable wealth is in the US, so yeah, sure, of course we're going to spend more on anything compared to the rest of the planet.

So the "US spends more on its military than the next 10 nations combined" shouldn't be a shocker of a statement to anyone.  We could easily afford to spend more than the rest of the world on our military, without putting a strain on the national budget, given the size of our population and economy.

So this "total military spending" figure is not a hugely informative number.  Let's see if there's a better way to frame that spending figure...


Per Capita Military Spending

That is, total military spending (like we saw in the last section), divided by the population.  I see this figure used a lot.  This can be thought of the cost of defending each citizen within a nation.

Using the most current population estimates from the CIA (mostly 2013), and the most current military spending figures complied by SIPRI (mostly 2011), I calculated a rough "top 15 highest per citizen spending" nations.

I know, not the same years, but hey, its close...sometimes data is a muddy business.  Anyway, here's what I got:

Rank	Country	Military Spending per citizen
1	United Arab Emirates	$3,500
2	United States	$2,250
3	Israel	$1,970
4	Saudi Arabia	$1,800
5	Singapore	$1,660
6	Norway	$1,530
7	Oman	$1,360
8	Australia	$1,130
9	Qatar	$980
10	France	$950
11	United Kingdom	$940
12	Somalia	$860
13	Denmark	$810
14	Finland	$710
15	Luxembourg	$700

*NOTE - for SIPRI's definition of "military spending," read this.

We can interpret this as "it costs $3,500 to defend an Emirati from foreign invasion each year, $2,250 to defend an American," etc.

While this is a popular way of reporting military spending, I don't like it so much.  With a few exceptions (ie, Israel, Somalia, etc.), its kinda just a list of nations with high per capita income.  Countries with more money spend more - on their military, on anything else.  Duh. 

AND - this figure doesn't speak much to intentions or aspirations.  If they had the scratch, how do we know Haiti, Ireland, or Lesotho wouldn't be number one?

Plus, it distorts the military expenditures of small populations.  Everyone needs certain base materials to field an army, and if your national population is small, those essential, banal items will pump up your "per citizen expense" value - and make your nation look a little more warhawk then it might actually be.

For example, Norway only has 5 million people in it.  If their Navy buys one new $5 million dollar ship, then their "per person military expense" will jump $1.  If the US bought the same vessel, its per person expenditure would jump 1.5 cents ($0.015) 

You gotta have at least one ship to have a Navy, so this cost is going to be unavoidable.  However, without a large population to spread the cost over, those unavoidables will crank up that "per capita" numbers.

If say, Luxembourg, with its population of half a million, just bought all their soldiers new uniforms, they could feasibly climb a space or two on the list.

So the "per person expense" is a pretty crude (and marginally useless) figure.  What do we have alternatives?

Military Spending as Percent of GDP

A figure preferred by the CIA, its a little closer to the mark.

GDP is the monetary value of all market goods and services produced inside a country in one year.  Its how much value, in dollars, a nation creates in a given period.  (For more clarification watch this video).

According to the CIA, this one shakes out as follows:

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Source

*NOTE - the US is number 19 on this list, at 4.6% of GDP.

We can interpret this as "given the size of a country economically, how much do they spend on their military."

BUT, again, once you start chewing on this one, you'll find some parts tough to swallow.  A country's government can only gets spend a percentage of their country's GDP - the percentage they collect through taxes.  Total GDP does not equal the total amount of cash available to a govt to spend. 

So if GDP and the total money available to a national government for spending are two completely separate things, why express one as percent of another?  The only way that a government's total available cash would be equal to their nation's GDP is if all tax rates were 100%.  Good luck with that!

If I asked you what your monthly food budget was, would you answer: "0.002% of the total amount of money the company I work for paid out in wages this month"?  I mean, you might be technically right, but how is that percentage figure useful?

What you'd be more likely to say something like: "food costs are 20% of my monthly expenses", right?  Can we look at military spending in an equivalent way?

Military spending, as percent of all govt expenditures

This is the figure I think best puts the military spending number into perspective.  Unfortunately, I rarely see it used, if ever.

Think of it as "out of all the money a government spends, how much is spent on defense."  Nice and simple - and, I think, pretty sensible!

I can't really find a comprehensive world ranking by this figure (which I thought was weird, seeing how it would be such a useful one to have), so I worked it out for myself - and you!!

SO - using that 2011 SIPRI number for military spending, and the CIA's estimate of all world government's total spending in 2012, I came up with just that list.  "Military spending, as a percentage of that govt's total spending."  

My worldwide ranking appears below.  Check it out, and if you have any comments about it, please leave them in the comments section at the end of this post!!

Let me just leave you with one thought: when it comes to data and statistics, always be hyper critical of the subtleties of the data, and their context.  Little things can make big differences!!  The US falls to the 9th highest spender in the world when we measure military spending this way.  Still pretty high, but no longer the world leader...

Rank	Country	Military spending, as % of total spending by that country's government
1	Eritrea	36%
2	Sudan	24%
3	Singapore	23%
4	Afghanistan	22%
5	Israel	21%
6	Saudi Arabia	21%
7	Korea, North	20%
8	Syria	20%
9	United States	19%
10	Russia	18%
11	India	18%
12	Uganda	18%
13	Central African Republic	17%
14	United Arab Emirates	17%
15	Jordan	16%
16	Armenia	16%
17	Taiwan	15%
18	Pakistan	15%
19	Sri Lanka	14%
20	Oman	14%
21	Lebanon	13%
22	Korea, South	13%
23	Ecuador	12%
24	Azerbaijan	12%
25	Kyrgyzstan	10%
26	Morocco	10%
27	Guinea-Bissau	10%
28	Algeria	10%
29	Burundi	10%
30	Bahrain	10%
31	Georgia	10%
32	Chile	10%
33	Colombia	10%
34	Yemen	10%
35	Guinea	10%
36	Poland	9%
37	Iran	9%
38	Turkey	9%
39	Mauritania	9%
40	Djibouti	9%
41	Angola	9%
42	Swaziland	8%
43	Namibia	8%
44	Bangladesh	8%
45	Mali	8%
46	Nigeria	8%
47	Kenya	7%
48	China	7%
49	Chad	7%
50	Thailand	7%
51	Cambodia	7%
52	Botswana	7%
53	Togo	7%
54	Ukraine	7%
55	Malaysia	6%
56	Cameroon	6%
57	Iraq	6%
58	Uruguay	6%
59	Paraguay	6%
60	Cote d'Ivoire	6%
61	Zambia	6%
62	Senegal	6%
63	Nepal	6%
64	Montenegro	6%
65	Albania	5%
66	Egypt	5%
67	Greece	5%
68	Serbia	5%
69	Croatia	5%
70	Burkina Faso	5%
71	United Kingdom	5%
72	Honduras	5%
73	Ethiopia	5%
74	Libya	5%
75	Equatorial Guinea	5%
76	Australia	5%
77	Fiji	5%
78	El Salvador	5%
79	Bulgaria	5%
80	Portugal	5%
81	Benin	4%
82	Estonia	4%
83	Lithuania	4%
84	Gabon	4%
85	Brazil	4%
86	Tunisia	4%
87	France	4%
88	Tajikistan	4%
89	Rwanda	4%
90	Romania	4%
91	South Africa	4%
92	Qatar	4%
93	Guyana	4%
94	Madagascar	4%
95	Kazakhstan	4%
96	Italy	4%
97	Tanzania	4%
98	Malawi	4%
99	Peru	4%
100	Norway	3%
101	Belize	3%
102	Lesotho	3%
103	Sierra Leone	3%
104	Belarus	3%
105	Trinidad and Tobago	3%
106	Germany	3%
107	Indonesia	3%
108	Canada	3%
109	Argentina	3%
110	Niger	3%
111	Slovakia	3%
112	Slovenia	3%
113	Netherlands	3%
114	Latvia	3%
115	Bolivia	3%
116	Czech Republic	3%
117	Panama	3%
118	Finland	3%
119	Jamaica	3%
120	Guatemala	3%
121	Dominican Republic	3%
122	Bosnia and Herzegovina	2%
123	Spain	2%
124	Denmark	2%
125	New Zealand	2%
126	Switzerland	2%
127	Hungary	2%
128	Seychelles	2%
129	Liberia	2%
130	Belgium	2%
131	Japan	2%
132	Sweden	2%
133	Mexico	2%
134	Nicaragua	2%
135	Mozambique	2%
136	Austria	2%
137	Timor-Leste	2%
138	Mongolia	2%
139	Luxembourg	2%
140	Papua New Guinea	1%
141	Malta	1%
142	Ireland	1%
143	Venezuela	1%
144	Cape Verde	1%
145	Turkmenistan	1%
146	Ghana	1%
147	Laos	1%
148	Moldova	1%
149	Uzbekistan	1%
150	Mauritius	1%
151	Haiti	1%
152	Iceland	0.3%
153	Cuba	0.2%