THE DEMAND MODELS OF NATIONAL DEFENSE BUDGET:A LITERATURE REVIEW

Kennedy, Posma Sariguna Johnson (2016) THE DEMAND MODELS OF NATIONAL DEFENSE BUDGET:A LITERATURE REVIEW. In: Proceeding 2nd Sriwijaya Economics, Accounting and Busimess Conference 2016. Sriwijaya Economics, pp. 13-20. ISBN 979 587 627 9

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Abstract

Defense is the pure public goods that having main characteristics are its use does not compete and can not be applied the principle of exclusion for everybody. In this paper we develope the models of demand for defense budget. The model that developed are the bureaucratic model, strategic models and combined models. From these models we want to know what the variables that involved in the demand of national defense budget. All the models remains optimize social welfare except in bureaucratic model. In the bureaucratic model, defense spending is a characteristic of the degree of inertia of the budget period, because a group of actors who enter into or affect bureaucracies always want to maintain the status quo and their positions. In the strategic model, the perpetrator of the government think rationally to maximize social welfare by the constraints of existing resources. The combination of bureaucratic and strategic models explaining relative strength of attraction between internal influences (the actors) and external influences (traditional threat), which is reflected in the functioning of government satisfaction and welfare.

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