Daniel Drezner, Military Primacy Doesn’t Pay (Nearly as Much as You Think), International Security, Vol. 38, No. 1, Summer 2013.

This article evaluates whether the economic benefits of military preeminence and deep engagement are as great as proponents suggest. This evaluation begins by breaking down the arguments that military primacy yields economic returns into the most commonly articulated causal mechanisms. It then assesses what the scholarly literature and evidence can conclude about those causal mechanisms. The three most plausible pathways are the geoeconomic favoritism that foreign capital inflows provide for military super-powers; the geopolitical favoritism gained from an outsized military presence; and the public goods benefits that flow from hegemonic stability.

Each of these arguments is less empirically persuasive than is commonly articulated in policy circles. There is little evidence that military primacy yields appreciable geoeconomic gains. The evidence for geopolitical favoritism is much more robust during periods of bipolarity than it is under unipolarity, which suggests that primacy in and of itself does not yield material transfers. The evidence for public goods benefits is strongest, but military predominance plays a supporting role in that causal logic; it is only full-spectrum unipolarity—a condition in which a single actor is universally acknowledged to be the dominant actor across a variety of power dimensions—that yields appreciable economic gains. The economic benefits from military predominance alone seem, at a minimum, to have been exaggerated in policy and scholarly circles. While there are economic benefits to possessing a great power military, diminishing marginal returns are evident well before achieving military primacy. The principal benefits that come with military primacy appear to flow only when coupled with economic primacy. These findings have significant implications for theoretical debates about the fungibility of military power, and should be considered when assessing U.S. fiscal options and grand strategy for the coming decade.

Read the full article here [pdf].