Julien Malizard, Deputy Chair of Defence Economics - IHEDN, contributed to the latest issue (no. 843) of Revue Défense Nationale (RDN), on the subject of financing the armed forces.
Julien Malizard is the author of the article entitled «Le financement des armées au sortant de la guerre du Golfe et de la guerre froide», which appeared in RDN. This number, released in October 2021, is devoted to the military lessons learned from the Gulf War. This publication follows a presentation by Julien Malizard as part of a conference held last June by the Service historique de la défense.
The end of the Cold War and the Gulf War coincided. The budgets devoted to defence then began a decline dubbed the «the peace dividend», which ended in 2002 with the French engagement in Afghanistan and which constitutes a form of budgetary anomaly. It also reveals the rationale behind the transformation of the armed forces, which have different needs because the threat is different and probably perceived as less severe than in the past. At the same time, the French economy is experiencing a number of adverse shocks, leading to increased budgetary dependence on the economic climate. The consequences for France have been the failure to comply with military programming laws, the decline and ageing of the equipment.
From a budgetary point of view, it is virtually impossible to distinguish, on a macroeconomic scale, between the two events (end of the Cold War and Gulf War). Nevertheless, the intuition behind this analysis is that the dissolution of the USSR was likely to cause lasting disruption to strategic and economic balances. To measure changes in «defence demand», economists use the defence budget and its composition as an indicator. Following Smith's example, the logic of resources thus adopted makes it possible to apply a dual approach, both strategic and economic. Strategic issues determine the need for defence, which is measured by involvement in conflicts and peacekeeping operations, by membership of alliances or by the existence of an enemy leading to a form of arms race. Economic issues include sensitivity to economic conditions (measured by economic growth), but also tensions linked to political trade-offs. From this point of view, the budget cycle Gulf War different from, or atypical of, other periods?
