The Nordic Countries: Peace Dividend or Security Dilemma?

Abstract

The end of the Cold War raises anew the old question of the alternative uses of the resources spent on the arms race. Disarmament is now taking place in Europe and the security environment of the Nordic countries is changing dramatically. Studies in the Nordic countries and elsewhere indicate that once transition problems are surmounted the medium-to-long-term effects of disarmament will be positive for employment as well as economic growth. The size of `the peace dividend' can be estimated only through econometric studies based on realistic scenarios of future military spending. Such scenarios, in turn, must be based on a reconsideration of the force structures appropriate to the challenges facing the Nordic countries today. Military spending in the Nordic countries rose rapidly under the influence of the Cold War. From the mid-1960s the Nordic countries seem to have parted ways, with continuing arming in Finland and Norway and a levelling off of military spending in Denmark and Sweden. There is a peace dividend to be collected for the Nordic countries, but it is not very large, and is accompanied by a situation of greater uncertainty and less predictability.