Information Technology Reference
In-Depth Information
Except for the awareness of threat, the defense expenditures are limited by the fol-
lowing economic factors in general. Firstly, the national economy development forms
the vital limit. In any period, defense is the most expensive public goods, and repre-
sents the most advanced technology. In the course of new military revolution, it is
evident that defense depends on capital and technology more and more. Secondly, ca-
pability of fiscal revenue forms the direct limit. Defense is provided by government,
especially by the central government. So the governmental fiscal revenue, rather than
GDP, is the direct constraint for defense. If one nation is rich, whereas the capability of
fiscal revenue is weak, the government is hard to establish a strong army. Thirdly, the
priority sequence of the governmental multi-objects influences the investment in de-
fense. In democratic society, government always pursues not only strong military
power but also advanced education, good health care and so on. Thus, the priority with
regard of the sequence of public goods determines its respective public spending.
2.2 Measurment and Method of Analysis
Based on the above analysis and the reference to Gulay Gunluk-Senesen (2001) [7],
we can design three sorts and five items of indexes to measure the defense expendi-
tures in all-around views of point as possible as we can.
Indexes with regard to GDP:
Index 1:
Defense
Expenditur
es
DEG
=
(1)
Gross
Domestic
Pr
oduction
Index 2:
Defense
Expenditur
es
DEAG
=
(2)
Adjusted
Gross
Domestic
Pr
oduction
AGDP infers Adjusted Gross Domestic Production. We define that:
AGDP
=
GDP
−
Living
Cost
(3)
For China,
Living Cost = Urban Population×Urban Living Cost + Rural Popula-
tion×Rural Living Cost
(4)
Indexes with regard to Public Finance:
Index 3:
Defense
Expenditur
es
DEP
=
(5)
Public
Expenditur
es
Index 4:
Defense
Expenditur
es
DECG
=
(6)
Public
Expenditur
e
s
of
Central
Goverment
Search WWH ::
Custom Search