World Military Expenditures


The United States spends as much on defense as the next seven largest countries combined. The benefit to America is that it is very doubtful that any nation could resist, in a conventional military sense, the country’s focused military power. Recent successes in two Persian Gulf wars, Kosovo, and Afghanistan give evidence of this superiority. Unfortunately, these expenditures do not seem as effective in generating capabilities to easily win unconventional or counterterrorism conflicts. Expensive tanks, ships, and planes are just not that cost-effective against guerillas using grenades or suicide bombers. Given that future conflicts are more likely to be unconventional in nature, it will be critical to see if the US or other western militaries dramatically restructure their spending in light of the new priorities.

As large as the US defense budget is, in 1998 it amounted to just 3% of the country’s Gross Domestic Product (GDP). It is remarkable that few, if any, countries in recorded history have been able to achieve and maintain the global military dominance enjoyed by America with such a small allocation of national income. Previous empire-builders such as England, Spain, or Rome, are estimated to have spent an order of magnitude more of their annual national income to achieve similar dominance. The US defense budget is actually small when compared to historical norms for a superpower. Because of this, American conventional military superiority is likely to last for decades or more until challenged by another power.

Main Insights

  • The United States is far and away the largest spender on defense in the world, spending $266 billion in 1998. After the attacks of September 11, 2001 and the subsequent Global War on Terror (GWOT), this amount increased to $300 billion in 2002 and will probably remain at that level for years to come. Still, the 1998 figure for America was only 7% of the world’s total–indicating that many countries spend large or at least modest amounts on defense purchases. But none spend in the same league as the United States.
  • The next largest defense spender is Russia at approximately $54 billion. By contrast, the United States spends nearly five times that amount. Put another way, if the US military services (Army, Navy, and Air Force) were their own countries, they would occupy in terms of world defense budgets the leading three positions, each one ahead of any other single country.
  • The entire European Union, including its 2003 entrants (Poland, the Czech Republic, and others) spent $176 billion on defense in 1998 or just 66% of the American total. Much of the figure was allocated to support a large number of basic forces–not to support higher-technology units or training which are areas where the US devotes significant funds. In some respects, the armies of many European countries have merely become self-defense or peacekeeping forces doubling as domestic job programs.
  • Israel probably spends the most defense dollars per person, estimated in 1998 at over $1,200 per capita. The US sends approximately $3 billion in military and economic aid to the country, subsidizing about 25% of Israel’s military budget.

Other Observations

  • In 1998, the third largest defense spender was France at $40 billion, while Japan was fourth at $37 billion. Japan is unique in that its constitution (largely written by the United States) mandates that defense spending can be no greater than 1% of Gross Domestic Product. Still, the Japanese economy is so substantial that this restriction nevertheless results in a very large defense budget.
  • China had the fifth largest defense budget at $37 billion, which is smaller than the budgets of Japan or even France. The Chinese budget was a fraction of the US value, and was spread over an army that is actually larger. Thus, the Chinese military is long on mass, but short on quality equipment and training. Tiny Taiwan had a budget half the size of mainland China’s, or $14 billion. Together, the US and Taiwan outspent China on defense in 1998 by a factor of over seven times.
  • Rounding out the top ten defense spenders in 1998 were the United Kingdom ($37 billion), Germany ($32 billion), Italy ($22 billion), Saudi Arabia ($20 billion), and Brazil ($18 billion).
  • On the Korean peninsula, North Korea spent $2 billion on defense while South Korea spent $13 billion or 6.5 times as much. However, due to the imprecise nature of North Korean economic statistics, the true cost of North Korean spending in 1998 might have been as high as $5 to $6 billion. Even using the higher estimate, North Korea did not outspend its southern neighbor. Still, some news articles claim that North Korea possesses a stronger overall military than the South, which is probably inaccurate.
  • In another flashpoint area, India spent $13.8 billion on defense versus Pakistan’s $3.9 billion, a ratio of 3.5 times. Based on the military power generated by these relative funds, it seems unlikely that Pakistan would fare very well against a determined Indian attack.
  • The second largest defense spender per citizen is Saudi Arabia. The oil-soaked kingdom spent over $1,000 per capita on defense in 1998. This has not, however, translated into comparable military power or security. While their forces are well-equipped, Saudi combat capabilities are held in serious doubt by many experts. Large sums of money do not necessarily result in effective combat power. It’s just as easy to waste money in defense spending as in other economic endeavors, perhaps even more so since measuring military effectiveness is difficult short of being in a war.
  • The United States spends the third largest amount of defense dollars per person: $930 per citizen (equaling just under $100,000 per soldier in 1998). China, by comparison, spends just $29 per capita (and $10,000 per soldier).
  • In Europe, France spends more per capita ($670) than Britain ($620). Germany spends even less ($390), which given its history, is not necessarily a bad thing.
  • The country spending the greatest share of its national income on defense is probably North Korea. Estimates from various sources range widely but most put the value in the neighborhood of 15% to 30%. The higher end of the estimates are almost ten times that of the United States’ annual defense budget, measured as a percent of GDP.

Sources and Methodology

The main source for this cartogram’s data is the International Institute of Strategic Studies (IISS) publication: The Military Balance (1998 edition). This annual publication details the order of battle for all the world’s countries as well as defense budget figures. Also consulted to check these figures was The CIA World Factbook (1999 edition), which in some cases provides higher numbers than IISS estimates. In cases where the two sources differ, the lower estimate is used. This cartogram only shows countries with military budgets of greater than $500 million per year to avoid overwhelming the map with a multitude of very small states.