In this article the theory of bureaucracy is used to analyze the collective choice
mechamsm for determining military spending. The model integrates economies of
size in military output from both the consumption (publicness) and production
(scale) sides. Spillover effects on a nation's military spending from its allies and
rivals are also investigated. The empirical results reveal significant differences
between groups of nations in the net economies of country size and in the direction
and magnitude of spillover effects. In addition, spillover effects appear to differ
between types of allies, depending on whether they are members of formal alliances.
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