Military Conscription and the (Socially) Optimal Number of Boots on the Ground

[Author Affiliation]Peter Berck, , , , pberck@berkeley.eduJonathan Lipow, , , , jlipow@nps.edu[Acknowledgment]The authors would like to thank Claude Berrebi, Martin Feldstein, Kenneth Kuttner, Francois Melese, Jay Simon, Ellis Tallman, John Warner, and seminar participants at the 2007 ASSA Meetings and the 2008 NBER Economics of National Security Winter Workshop, as well as three anonymous referees, for their invaluable comments and corrections. All remaining errors are our own.1. IntroductionMilitary conscription has existed since ancient times, and it remains remarkably popular today. Mulligan and Schlieffer (2004) found that 95 of the 164 countries that they examined continue to rely upon conscription to man their armies.1 The continued popularity of conscription, however, stands in stark contrast to the unpopularity of forced military labor among economists. To illustrate this point, Lee and McKenzie (1992) examined 12 textbooks in basic economics and found that all 12 were in agreement that an all-volunteer military force (AVF) was inherently more efficient than resorting to conscription.This seemingly wall-to-wall consensus has its origins in a number of highly influential articles, including those of Friedman (1967), Hansen and Weisbord (1967), and Oi (1967). Summarizing the arguments articulated in these articles:First, the draft imposes a discriminatory tax on recruits equal to the difference between their market wages and the below-market military wage. Second, below-market pricing of personnel under the draft leads to a military with "too many" recruits. Third, the all-volunteer approach attracts those recruits with the lower opportunity costs and hence secures a given number of recruits at less cost.2Not all of these objections are given equal weight: "The argument that the all-volunteer army is cheaper than the draft because the former is far better at discriminating between low and high opportunity cost recruits lies at the heart of the opposition to the draft amongst economists."3In recent years, a number of articles have challenged this perspective. The reasoning underpinning these articles is that conscription should not be compared to a volunteer army but rather to the taxes required to finance a volunteer army. When viewed that way, conscription could be a desirable form of taxation if the deadweight welfare losses associated with conscription are lower than those associated with other taxes.4 Prominent among these articles are those of Garfinkel (1990), Lee and McKenzie (1992), Ross (1994), Warner and Asch (1996), and Warner and Negrusa (2005).5In this article, we extend and develop the ideas featured in the literature on military manpower mobilization cited above. In particular, we widen the discussion to consider (i) the optimal size of the military and how that size is influenced by manpower mobilization choices; (ii) mixed systems that combine volunteers and draftees; (iii) initiatives that may reduce the inefficiencies inherent in both AVF and conscript-based systems; and (iv) how changes in the relationship between the civilian and military marginal product of recruits alter the efficacy of alternative manpower mobilization systems.Our analysis indicates that an AVF will generally tend to be too small when compared to a "first best" social optimum. Forces that rely on conscription, however, will tend to exploit high-value civilian manpower for low-value military activities, just as predicted by Friedman (1967) and Oi (1967), and, ironically, they too will generally tend to be too small relative to the first best. We also find that under conditions in which recruits' civilian and military marginal products are similar, the manpower misallocation costs associated with conscription decline and may even disappear.Our analysis of methods available to reduce the inefficiencies associated with military manpower mobilization indicates that AVF militaries would probably lower the social cost of recruitment by offering college benefits to new recruits, while conscript-based armies would probably lower the social cost of the draft by excusing or deferring the college bound from service. …