How States Pay for Wars

How States Pay for Wars

Rosella Cappella Zielinski

Cornell University Press, Ithaca, New York, 2016, 208 pages

Book Review published on: March 30, 2018

The intersection between war and state funding affects its citizenry, leadership, international relationships, and ultimately even the effectiveness of the Armed Forces. Given this subject’s importance, a conceptual framework for how and why wars are funded is conspicuously lacking in today’s debates. In How States Pay for Wars, author Rosella Cappella Zielinski does an admirable job in filling the void.

Zielinski leverages a data set spanning 180 years of warfare to create a conceptual model for war finance. This model depicts a realist world where state leadership’s inherent desire to remain in power is confronted by the dichotomy of avoiding unsustainable public sacrifice and spending enough to win the war. Dubbed “leadership preferences,” the public’s willingness to sacrifice is measured by popular support for the war and the threat of inflation.

Leadership preferences are then applied against a “war finance continuum” characterized by direct resource extraction (income taxes) on one side, and indirect or external resource extraction on the other (indirect taxes, currency printing, or foreign debt). The public is more likely to bear the costs of direct extraction when public support for the war and the risk of inflation is high. Conversely, leadership commonly resorts to indirect or external extraction when public support and fear of inflation are low, reducing civil-military burden sharing and attendant political consequences. Of course, since losing a war is typically career-ending, state capacity overrides all preferences. If a state lacks either hard currency or the bureaucratic capability (through incompetence or corruption) to raise funds, it must default to external resource extraction.

How States Pay for Wars illustrates this model in a series of case studies. These studies are organized theoretically, highlighting the effects of popular support, inflation, and capacity through diverse examples such as the Russo-Japanese War and Vietnam. Finally, the author concludes with a data trend analysis and future research possibilities.

While the historical and analytical quality of the case studies are reason alone to read How States Pay for Wars, it is not an easy read. This book stays true to its scholarly roots, beginning with eight pages of finance definitions in chapter 1 and ending with a discussion of dummy and discrete variables in chapter 6. The applicability of How States Pay for Wars is also limited to “long wars”—defined as conflicts over six months. Zielinski justifies this scope through a “short-war” focus on “avoid[ing] instant defeat” over long-term leadership preferences.

With these caveats in mind, I highly recommend this book to national security scholars and practitioners. How States Pay for Wars accomplishes a formidable feat by distilling the myriad of factors surrounding war into three quantifiable elements. In doing so, Zielinski ties the modern war finance theories together in a single conceptual framework. How States Pay for Wars not only demystifies war finance but also provides national security professionals with an economic springboard to discuss the impacts of leadership, the public, and international patronage on national security.

Book Review written by: Maj. Robert Nelson, U.S. Air Force, Fort Leavenworth, Kansas