SOT FOR QUOTATION WITHOUT PERKISSIOS OF THE AUTHOR
MARS:
DESCRIBING DYNAMICS OF MILITARY EXPENDITURES REDUCTIONV . Iakimets
September 1985 IP-85-61
Working Arpers a r e interim r e p o r t s on w o r k of t h e International Institute f o r Applied Systems Analysis and have received only lim- ited review. Views or opinions expressed. h e r e i n d o not neces- sarily r e p r e s e n t those of t h e Institute or of i t s National Member Organizations.
INTER?;ATIONAL IKSTITUTE FOR APPLIED SYSTEYS AKALYSIS 2361 Laxenburg, Austria
FOREWORD
Even with globally a d e q u a t e food a v a i l a b i l i t y , l a r g e numbers of p e o p l e remain c h r o n i c a l l y u n d e r n o u r i s h e d today. Evaluation of a l t e r n a t i v e national a n d i n t e r n a t i o n a l policies t h a t c a n h e l p r e d u c e r a p i d l y h u n g e r in t h e world h a s b e e n a major theme of t h e FAP s i n c e i t s inception.
Though national r e d i s t r i b u t i v e policies may b e e s s e n t i a l t o r e d u c e h u n g e r at a s a t i s f a c t o r y r a t e , t h e r e s o u r c e s a v a i l a b l e with t h e developing c o u n t r i e s are limited. I n t e r n a t i o n a l c a p i t a l t r a n s f e r s are t h u s needed.
Among t h e s o u r c e s f o r such funds c a n b e r e d u c t i o n in a r m s expendi- t u r e .
With t h e h e l p of F I P ' s Basic Linked System (BLS) of national a g r i c u l - t u r a l policy models we h a v e e x p l o r e d c o n s e q u e n c e s f o r economic develop- ment a n d r e d u c t i o n in h u n g e r of mutual a r m s r e d u c t i o n a n d r e d i s t r i b u t i o n of p a r t s of t h e r e s o u r c e s t h u s saved.
In t h i s p a p e r , Vladimir Iakimets e x p l o r e s t h e dynamics of military e x p e n d i t u r e r e d u c t i o n as a p r e l u d e t o designing a p p r o p r i a t e a r m s r e d u c - tion s c e n a r i o s .
K i r i t S. P a r i k h P r o g r a m L e a d e r Food a n d A g r i c u l t u r e P r o g r a m
ACKNOWLEDGMENTS
The fruitful discussions with Dr. J. P. Hrabovszky, a n d Prof. K.S.
Parikh (IIASA), a n d Prof. F. Rabar (IIASA) who rwiewed an earlier draft of t h i s paper a r e greatly appreciated.
The a u t h o r wishes.to express his special t h a n k s t o Dr. I. Kouzmi~?sky Cvr\TIISI, Moscow) for his assistance and t o Prof. O.A. Kossw (WIISI, Mos- cow) for his support a ~ l d discussions m d t o Cmthia Enzlberger who typed t h i s paper.
In this paper four hypotheses on possible dynamics of reduction of military expenditures of a country are introduced and described. Illus- trative examples of calculation of at,nuaIIy released resources for the
BLS
rcns according to ea,ch hypothesis are given.-
vii-
CONTENTS
1. Ir-troduction 1
2. The problem statement 2
3. Description of the hypotheses 3
4. Formalized description of hypotheses 4
4.1. Optimistic hypothesis 5
4.2. Example of calculatio~ls El') for optimistic hypothesis 7
4.3. Constant hypothesis 9
4.4. Example of calculation of Ei2) 10
4.5. Cautious optimistic and cautious gradual progressive hypotheses 11 4.6. Examples of calculations Ei3) and E{~) 12
4.7 Summary 14
Referer-ces 14
1. Introduction
The main starting point for launching t h e Food a n d Agriculture Program a t IIASA was in fact our desire to understand whether reasonable and speedy inter-
nationally and nationally acceptable paths exist t o reduce t h e large number of (more t h a n 400 million) hungry people in t h e world. The Basic Linked System (BLS) consisting of interacting national agricultural policy models with sectoral breakdown which was created a t IlASA is a suitable tool for t h e study of world hunger problems from different points of view. One of t h e possible directions of such a study is t o analyse t h e opportunities for t h e utilization of t h e huge reserves existing i n individual countries, namely resources used for military purposes, for the improvement of food supplies. A s e t of scenarios which we call t h e Mutual Arms Reduction Scenarios ( M A R S ) in t h e s e t of other scenarios for t h e FAP's h u n g e r study was suggested for investigation. Objectives of t h e
MARS,
their importance, assumptions for their construction, problems t o be solved a s well as description of t h e i r s t r u c t u r e were given in Iakimets (1985).
One of t h e problems t o be solved for implementation of
MARS
with BLS is t h e problem of determining t h e annual amount of reduction of a country's mili- tary expenditure.This paper contains t h e formalized statement of t h e problem, description and formalization of t h e hypotheses relating t o the desired dynamics of reduc- tion of military expenditure and illustrative examples for calculation of annu- ally released resources.
2. The Problem Statement
, L e t us denote E(t) as total military expenditures of a country in y e a r t and as its reduction coefficient. The amount of t h e military expenditures reduc- tion of a country in year t or t h e released fund created by this country, F(t), is
determined as F(t)
=
E(t).Hence
E ( t + l )
=
E(t) ( 1-
k). (2)In order t o determine annual amount of reduction of military expenditures of a country F(t) a n d hence E (t+ 1). we need t o know initial value E(o) a n d value of k , for each t
=
0.1,...
T-1. It is naturally t o assume t h a t/+
=
/L(Q,t)# (3)where E is in general case vector of parameters
i i
= ( a l , a2,...,
a*) which helps us t o make hypothesis on "behaviour" of a country with relation t o its military expenditures reduction for t h e period T under consideration.The problem is to identify E and to And type of functions
p(Z,
t) which will reflect hypothetical kinds of this behaviour.3. Description of the Hypotheses
To illustrate t h e possible hypotheses relating t o t h e desired dynamics of reduction of military expenditures l e t u s consider Figure 1.
I
I 1 I I 1 I I I
0 2.5 5 7.5 10 12.5 15 17.5 20
T I E
-=- Optimistic
(1)* Straightforward
-" Cautious
Optimistic
* Caut lous Gradual Progressive
Figure I. Four hypotheses of a country's behaviour
