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Discussion Papers
The Economic Costs and the PoliticalAllure of Conscription
Panu PoutvaaraUniversity of Helsinki and HECERandAndreas WagenerUniversity of Vienna
Discussion Paper No. 106May 2006ISSN 1795-0562HECER – Helsinki Center of Economic Research, P.O. Box 17 (Arkadiankatu 7), FI-00014University of Helsinki, FINLAND, Tel +358-9-191-28780, Fax +358-9-191-28781,E-mailinfo-hecer@helsinki.fi, Internetwww.hecer.fi
 
HECERDiscussion Paper No. 106
The Economic Costs and the Political Allure ofConscription
Abstract
Since Adam Smith, most economists have held that a professional army is superior to aconscript army, thanks to benefiting from comparative advantage and specialization. Wesummarize recent literature on the benefits and costs of military draft, with a specialemphasis on its dynamic effects on human capital formation. Empirical evidence refutesthe claim that the economic costs of the draft would be balanced by increased democraticcontrol or reduced likelihood of war. Rather, the political allure of conscription seems toarise from the possibility to concentrate the tax burden on a minority of voters in a way thatis generally held to be unacceptable with normal taxation.
JEL Classification
: D6, H56, H57.
Keywords
: Military draft, taxation, dynamic costs, intergenerational fairness.Panu PoutvaaraAndreas WagenerDepartment of EconomicsDepartment of EconomicsP.O. Box 17 (Arkadiankatu 7)University of ViennaUniversity of HelsinkiHohenstaufengasse 9FI-00014 University of Helsinki1010 ViennaFINLANDAUSTRIAe-mail:panu.poutvaara@helsinki.fie-mail:andreas.wagener@univie.ac.at
 
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1.Introduction
Today’s non-totalitarian states do no longer rely on forced labor – with the notableexception of military draft and its unarmed corollaries such as civil, national or socialservice. In high-intensity wartimes of the 19
th
and 20
th
centuries, most countries (whetherdemocratic or authoritarian) drafted their citizens to the army.
1
In the past four decades,and especially after the end of the Cold War, many democracies have (re-)abolishedmilitary draft and its substitutes in favor of a professional army (all-volunteer force).Other countries are debating abolition. Yet, ten out of the 26 NATO members
2
are stillfirmly running their armies with conscripts; Latvia, Romania and Slovakia still rely onmilitary conscription but are planning to abolish it.
3
As Figure 1 shows, the draft stillheavily intrudes into the lives of young men in many Asian countries (including China),in virtually all successor states of the Soviet Union as well as throughout Latin America,the Arab World and the Middle East.While the duration of spells for military service is one year or less in many Europeancountries, it typically is between 18 and 24 months in many other countries around theglobe; some countries have even longer periods of service.
4
If available, unarmedalternative service typically is longer than military service. To the other extreme of apurely market-based solution for hiring military personnel, Saudi-Arabia heavily relies onforeign mercenaries (mainly from Pakistan and India) to staff its armed forces; also theVatican’s Swiss Guard falls into the category of a professional army exclusively hiredfrom abroad.
1
India and Ireland have never utilized military conscription; in Canada conscription has never takenplace in peacetime.
2
These are Austria, Bulgaria, Denmark, Estonia, Germany, Greece, Norway, Lithuania, Poland, andTurkey.
3
Unlike the rest of the world, Egypt, Eritrea, Israel, Malaysia, North Korea, Peru, Taiwan andTunisia also draw women into compulsory military service or its equivalents.
4
Most notably North Korea (three to ten years of compulsory military service), Kazakhstan (31months), South Korea (26-30 months) or Syria (30 months). Cf. Globaldefence.net (2005).
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