Military involvement in the economy is a crucial aspect of civil–military relations. However, the impacts of economic ventures on the rank-and-file have not been examined empirically. In this article, we demonstrate that military economic involvement decreases the risk of mutinies by providing private goods that promote rent-seeking behavior among lower-ranking soldiers. Through military-owned enterprises, soldiers access jobs, benefits and off-book revenues (tax breaks, subsidies, favorable contracts, etc.) that are unavailable to civilians. Further, military elites may use these resources to subsidize military budgets and ameliorate economic grievances in the lower ranks. Using novel, cross-national data on military involvement in the economy and information on about 2500 military-run firms, we show that militaries with a greater stake in the economy are less likely to experience mutinies than countries with no and lower rates of economic involvement. Similar patterns hold for risk of mass defection.
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