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Article

EU Demand for Defense, 1990–2019: A Strategic Spatial Approach

1
Department of Agricultural, Food, and Resource Economics, Michigan State University, 426 Auditorium Road, East Lansing, MI 48824, USA
2
School of Economic, Political and Policy Sciences, University of Texas at Dallas, 800 W Campbell Rd, Richardson, TX 75080, USA
*
Author to whom correspondence should be addressed.
Received: 14 December 2020 / Revised: 14 January 2021 / Accepted: 18 January 2021 / Published: 1 February 2021
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
For 1990–2019, this study presents two-step GMM estimates of EU members’ demands for defense spending based on alternative spatial-weight matrices. In particular, EU spatial connectivity is tied to EU membership status, members’ contiguity, contiguity and power projection, inverse distance, and arms trade. At a Nash equilibrium, our EU demand equations are derived explicitly from a spatially based game-theoretical model of alliances. Myriad spatial linkages among EU members provide a robust free-riding finding, which differs from the spatial and non-spatial literature on EU defense spending. Even though the EU applies common trade policies and allows for unrestricted labor movement among members, members’ defense responses adhered to those of a defense alliance. Moreover, EU defense spending exhibits positive responses to GDP and transnational terrorist attacks, and a negative response to population. During the sample period, EU members did not view Russia as a military threat. View Full-Text
Keywords: European Union (EU), spatial autoregression and connectivity; alliance; strategic free riding; Nash equilibrium European Union (EU), spatial autoregression and connectivity; alliance; strategic free riding; Nash equilibrium
MDPI and ACS Style

George, J.; Sandler, T. EU Demand for Defense, 1990–2019: A Strategic Spatial Approach. Games 2021, 12, 13. https://0-doi-org.brum.beds.ac.uk/10.3390/g12010013

AMA Style

George J, Sandler T. EU Demand for Defense, 1990–2019: A Strategic Spatial Approach. Games. 2021; 12(1):13. https://0-doi-org.brum.beds.ac.uk/10.3390/g12010013

Chicago/Turabian Style

George, Justin, and Todd Sandler. 2021. "EU Demand for Defense, 1990–2019: A Strategic Spatial Approach" Games 12, no. 1: 13. https://0-doi-org.brum.beds.ac.uk/10.3390/g12010013

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