DEMAND FOR BRAZIL’S MILITARY EXPENDITURE: DETERMINING FACTORS AND TRENDS

Abstract

This article investigates the complex set of determinants shaping the demand for military expenditure in Brazil, a nation that consistently maintains the largest defense budget in Latin America despite the absence of direct, conventional military threats from its neighbors. This apparent paradox challenges traditional models of defense economics, which are predominantly built on the logic of reaction to external threat and thus offer limited explanatory power for the Brazilian case. The study addresses this theoretical gap by developing and applying an original three-factor demand model, designed to capture the unique interplay of strategic, economic, and ideational drivers behind Brazil's military spending. The proposed integrative framework operates across three analytical levels. The first factor re-conceptualizes external drivers, moving beyond immediate threats to focus on strategic uncertainty in South America and Brazil’s enduring ambition for regional dominance and geopolitical autonomy. This encompasses the management of latent regional rivalries and the desire for a power-projection capability that underpins its claim to global actor status, notably a permanent seat on the UN Security Council. The second factor encompasses domestic economic constraints and institutional realities. It analyzes how commodity-driven economic cycles, fiscal capacity, and institutional path dependence – including the corporate interests of the armed forces and the domestic defense-industrial base – enable or constrain budgetary allocations, creating a structural «floor» for defense spending. The third, and most distinctive, factor delves into ideational and identity-based drivers. This includes the powerful national narrative of sovereignty over the Amazon rainforest and vast maritime Exclusive Economic Zone, the concept of the military as a guardian of national unity and territorial integrity, and a deeply held self-perception as a peaceful yet influential power destined for regional leadership. The model demonstrates high explanatory power, elucidating Brazil’s consistent investment in high-cost, symbolic capabilities that serve status and sovereignty goals rather than immediate war-fighting needs.