Blog Post

AEIdeas

It’s not a natural impulse for politicians or activists to highlight trade-offs. Take cutting defense spending. Some Democratic presidential candidates envision a sizable reduction to the Pentagon’s budget if they’re elected. If that should happen, one possible program on the chopping block might be R&D investment. There is a lot of it, after all. A 2018 Congressional Research Service report found that in 2016 the United States spent $78.1 billion on defense R&D, “more than seven times as much on defense R&D than the rest of the OECD countries combined.”

An experimental F-35B joint strike fighter jet. The Marine Corps’ F-35B model can take off from warships and aircraft carriers and land like a helicopter. REUTERS/US Marine Corps

And what do we get for all those tens of billions? That question is partially answered by a new working paper, “The Intellectual Spoils of War? Defense R&D, Productivity and International Spillovers” from Enrico Moretti, Claudia Steinwender, and John Van Reenen. Here’s what the researchers found (bold by me):