JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Wiley and The International Studies Association are collaborating with JSTOR to digitize, preserve and extend access to Mershon International Studies Review. This review discusses the likely size, pace, and distribution of reductions in defense spending and the possible barriers to converting military resources to civilian purposes. It argues that the prospects for a peace dividend in the aftermath of the Cold War are clouded by political incentives and economic interests that may oppose or retard significant military retrenchment. Moreover, the resource savings from any military retrenchment may not necessarily be reallocated fully and efficiently to produce gains in civilian production and productivity. Any such gains are apt to take some time to materialize, whereas the political costs and socioeconomic disruption caused by lower military expenditures are likely to be felt more immediately. The impacts of a defense cutback, both positive and negative, will be uneven across industries, occupations, regions, and ethnic and income groups, so that some will bear more of the adjustment costs while others will reap more of the ensuing benefits. Indeed, given their different social institutions, political cultures, and economic structures, different countries are likely to pursue alternative policy offsets that accompany any defense cutback, thus resulting in an uneven distribution of the peace dividend globally.This essay attends to the ramifications of a possible military "build-down." Drawing on the pertinent literature, it seeks to address the following questions.1. What are the prospects for and likely size of the so-called peace dividend to be realized from a fall in military expenditures? 2. What are the likely domestic redistributive consequences of a defense cutback? 3. What are the likely economic consequences of unilateral or multilateral arms reduction for the United States and its traded sectors?Before proceeding, each of these questions requires some clarification. The first question refers to a process that has often been popularly described, but poorly *This essay is a significantly revised and expanded version of an earlier paper, coauthored with Henrik Sommer, that was presented at the annual meeting of the International Studies Association, Washington, D. C., March 29-April 1, 1994. I thank Robert B. Woyach for his detailed comments that were very helpful in producing this version.
? 1995 TheGrasping the Peace Dividend specified, as converting swords into plowshares. This process actually involves at least two steps: military expenditures are cut to generate nontrivial savings (a resource dividend), which are, in turn, applied to promote greater production efficien...
