The latest arms report has something for everyone

The Stockholm International Peace Research Institute (SIPRI) just released their 2012 report on trends in world military expenditures. The report -- hell, just the press release -- should please a lot of people in the foreign policy community, albeit for different reasons. 

For those decrying the global arms race, the topline figure should be cause for cheer: 

World military expenditure totalled $1.75 trillion in 2012, a fall of 0.5 per cent in real terms since 2011, according to figures released today by Stockholm International Peace Research Institute (SIPRI).

Hooray! Fewer arms, more hugs, or something like that!! 

For neoconservatives, however, the reasons behind that drop in aggregate defense spending will vindicate their worries. The press release confirms the decline in U.S. hegemony in defense spending: 

In 2012 the USA’s share of world military spending went below 40 per cent for the first time since the collapse of the Soviet Union. A declining trend that began in 2011 accelerated in 2012, with a drop in US military spending of 6 per cent in real terms to $682 billion....

US military spending in 2012 was also projected to be $15 billion lower than previously planned as a result of cuts to the Department of Defense linked to the 2011 Budget Control Act. The bulk of cuts under this legislation will begin in 2013. 

So, with the decline in U.S. military expenditures, we're in real danger of being overtaken by the Chinese, right? Well ... there's enough grist in the report for neoconservative skeptics as well. 

The fact sheet puts this decline U.S. defense spending in the proper perspective. The United States still spends four times as much on defense as the next-biggest spender (China). Furthermore, "US spending was still more than the combined spending of the next 10 countries (p. 4)." 

Will China's defense spending eventually match the United States? Assuming China grows at a healthy clip -- hardly a guarantee -- sure. But as the Economist noted a few weeks ago, tweaking those assumptions just a tad leads to some very different predictions about when defense parity will occur: 

When will China catch up to the U.S.?  It's complicated...

What's more intriguing is the effect of the Great Recession on defense spending: 

Even in those parts of the world where spending has increased, the effects of the economic crisis can still be seen: slowing economic growth in emerging regions has led to slower rates of growth in military spending. Only the Middle East and North Africa increased their rate of military spending between 2003–2009 and 2009–2012.

The average annual rate of military spending increase in Asia, for instance, has halved from 7.0 per cent per year in 2003–2009, to 3.4 per cent per year in 2009–2012. The slow-down was most dramatic in Central and South Asia, where military spending was growing by an average of 8 per cent per year in 2003–2009, but by only 0.7 per cent a year since 2009, and actually fell in 2012, by 1.6 per cent.

Here's the chart: 

The Great Recession constrained military spending

That chart massively undersells the decline in defense spending, because it measures absolute levels of military spending and not spending as a percentage of global output. If you use that metric, then defense spending's share of the global economy has fallen by about half since the end of the Cold War. 

It's almost as if the 2008 financial crisis and subsequent recession didn't trigger the arms races and general increase in political conflict that some expected would happen. It's almost as if the current threats to national security aren't as serious as they were back in the day. 

Daniel W. Drezner

Why cyberattacks will never really be regulated

Your humble blogger has been busy at the U.S. Army War College's annual conference on The Future of American Landpower ... at which he's heard a lot about cyberattacks. So at the risk of violating one of my own maxims, I want to write one post about this whole cyber business. Because the more I apply my monkey brain to this, the more dubious I get about how it's being talked about, and I want to try to work my way through this. 

First, if we're living in a world where the director of national intelligence thinks it's the number-one threat out there ... well, let's face it, then it's not a very scary world, is it? I mean, if industrial espionage has replaced terrorism as the biggest national security threat facing the United States ... meh. I don't want there to be industrial espionage, but let's face it, this ain't the kind of Cold War-level threat that I hear bandied about so frequently. 

But, to be fair, I think concerns about "cyber" aren't just about the industrial stuff -- it's attacks on critical infrastructure and so forth. Except now we need to step back and ask under what circumstances such attacks would occur. There are terrorists of course -- which means that this is a old threat in a new domain. There are state actors -- which means that this is an even older threat in a new domain. Terrorists will most likely attempt such attacks when the opportunity arises. State actors presumably would not attempt such actions on a full-bore scale unless there were actual military hostilities. Cases like Stuxnet fall in between ... into espionage and covert action. 

So, can international norms about cyberattacks be negotiated? I know NATO is trying something like this with the Tallinn Manual, and I know the United States is insisting that the laws of war apply to cyberdomains. I suspect that this has a chance of working in regulating real world interstate military conflicts, because, with any shadow of the future, most states are prepared to obey most regimes most of the time. 

But let's face it -- most of the concerns about cyber aren't about what happens if a war breaks out. The concerns are about regulating such attacks during peacetime, which means this is about regulating intelligence-gathering, espionage, and covert actions. Now, let me just list below the number of international regimes that establish the rules, norms and procedures for regulating these kind of activities:


Nada. Zip. Nothing. Or, as one journal article more delicately put it, "espionage is curiously ill-defined under international law." 

That's because espionage can't really be regulated. For any agreement to function, violators have to be detected and punishment has to be enforced. In the world of espionage, however, revealing your ability to detect is in and of itself an intelligence reveal that states are deeply reluctant to do. 

So I don't think negotiations will work, and I sure as hell don't think smart sanctions will work either. Most of what concerns us about cyber falls under the espionage and covert action category, and that's never been regulated at the global level. 

What am I missing? Seriously, what -- because what I just blogged is highly subject to change.