One of the significant drivers of military expenditure in the 21st century is the issue and risk of terrorism. Countries that have a considerably high threat of terrorism gradually increase their military spending. Terrorism is directly related to negative economic growth and development. Hence, states try to curb the adverse effects of terrorism by investing in the military. Some of the economic factors related to terrorism include capital flight. Thus, military spending is a product of sociopolitical factors such as economic competitiveness and international relations.

Capital flight refers to the movement of investors from one location to another in search of better trading environments (Asongu and Joseph 5). Terrorism harms security. A higher risk of terrorism will eventually push investors to a safer destination. Hence, governments’ push for investment in military equipment and training is a method of combating capital flight.

However, some countries spend on the military for political reasons. Some want to create a political impression of mightiness over their trading partners and neighbors. The perception of superiority motivates political leaders to prepare for war or invest in world policing. Some of the ideas that support global policing include the fight against terrorism and the protection of allies. The United States is the largest spender on the military. As the world police, the United State has taken part in different cross border crisis resolution through military intervention. A good example is the Iraq crisis of 2003 (Conte 115). The United States plays an essential role in the fight against terrorism as one of the global issues that require international intervention.

In conclusion, military expenditure is mainly a product of sociopolitical and global factors such as terrorism and economic development.  The possibility of war is also a significant determinant. A higher risk of terrorism will eventually push investors to a safer destination. Countries may also invest in the military to remain in control over their neighbors or trading partners.

Works Cited

Asongu, Simplice and Joseph Amankwah-Amoah. “Military expenditure, terrorism, and capital flight: Insights from Africa.” African Governance and Development Institute WP/16/018, 2016. SSRN: https://ssrn.com/abstract=2800655 or http://dx.doi.org/10.2139/ssrn.2800655

Conte, Alex. Security in the 21st Century: The United Nations, Afghanistan, and Iraq. US: Routledge, 2017.

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