The Determinants of Defence Expenditure in the ASEAN Region

This article attempts to determine the extent to which domestic economic conditions have influenced le vels of defence expenditure in five ASEAN countries since the early 1960s. Whilst aspects of data qua lity preclude a precise conclusion, it seems that domestic economic forces do exert at least a moderate influence on defence expenditure. Defence expenditure in the current year was positively related to de fence expenditure in the previous year, and to the government's budgetary position in that year. The ba lance of payments position exerted a strong indirect influence through its effect on government revenue. Given its personnel component, defence expenditure appears less prone to cutbacks than some other government expenditure categories in the face of overall government expenditure reductions.