Military Involvement in the Economy and Leader Survival

• In Event: Militaries and the Public: Representativeness, Trust, and Intervention

Abstract

The literature on civil-military relations has extensively studied the causes and consequences of military involvement in politics, which is considered as military entrenchment into the civil sphere. We know that military involvement in politics has consequences for both democratic and non-democratic systems in the domestic and international domains. However, we have limited knowledge on military involvement in the economy as yet another form of military entrenchment into the civil sphere. Military involvement in the economy takes the form of military running economic enterprises such as goods manufacturing, entertainment, banking, mining, transportation, food, etc. Military involvement in the economy, which is a surprisingly common phenomenon, has consequences for both politics and the economy and should be considered as another form of military entrenchment into the civil sphere. Participation of the military in the economy transforms the officers into business contractors which could lead to corruption. The military-turning-political is an inevitable consequence of the military becoming an economic interest group whose purpose would be to lobby for economic policies rather than to function for the security of the state. A military that enjoys favorable policies from the government - such as receiving subsidies and tax exemption - and utilizes cheap labor by using soldiers in economic activities would threaten private sector through unequal competition.
In this paper, I introduce the phenomenon of military involvement in the economy and describe its various forms across different political systems using an original cross-national dataset. I argue that leaders allow their military to get involved in the economy because they are concerned with their survival. By allowing the military to benefit from economic activities leaders buy off the military and make it part of their constituency in order to deter threats from the armed forces and stay in power. The main question in this paper is to what extent does military involvement in the economy deter threats from the military to the leader? In other words, how does military involvement in the economy affect leader survival by preventing coups? If leaders make a commitment to allow their military to benefit economically by getting involved in the economy in order to stay in power, they should expect the military's complete and full loyalty to the regime. As a result, we should expect such leaders to survive longer in office. However, I argue that the effect of military involvement in the economy on leader survival depends on the level of military economic consolidation. Military economic consolidation refers to the extent military involvement in the economy is dependent/independent of the leadership. The military's dependency on the leadership affects the strategic choices the military makes regarding its relationship with the government. A dependent military is more vulnerable to political challenges and needs the support of the leadership to protect its economic interests. Using original data on military economic consolidation I will show that the effect of such a strategy on leader survival to be highest when the military involvement in the economy is not consolidated. In other words, the likelihood of leader survival (lack of coups and military defections) is high when the military has not consolidated its economic involvement but decreases as the military consolidates its involvement over time. It is because as the military consolidates its economic involvement over time it will become less dependent on the leadership to maintain its economic interests and as a result will have less incentive to protect the leader.
What are the implications of this research for the study of democracy? Military involvement in the economy has implications for leader survival and consequently for democratization in non-democratic systems and democratic stability in democratic countries. Military involvement in the economy can hinder the democratization process by tying the military’s interests to the status quo (examples are Egypt and Iran today) and can jeopardize democratic stability by bringing the armed forces into power struggles (examples are Bolivia and Venezuela today). At the end of the spectrum, we could imagine a militarized democracy not functioning the way scholars of democracy hope a democratic system to function. So far, we have very limited knowledge on the phenomenon of military involvement in the economy. The works on the subject are limited to a few qualitative case studies and historical accounts. The limited knowledge on the subject is due to lack of quantitative cross-national data on the extent of military economic activities. This paper breaks new ground on this subject by introducing a comprehensive cross-national data on military involvement in the economy globally from 1945-2010.

Author

• Roya Izadi, University of Rhode Island