The allocation and distribution of resources to address compelling needs stands as a fundamental policy objective for governments, encapsulated in the public economics concept of “guns or butter.” The implications of military expenditures on economic dynamics have engendered significant discourse within the scholarly literature. While national security is universally acknowledged as a paramount concern for every country, the substantial financial commitments associated with military expenditures impose significant constraints on governmental capacity to allocate resources effectively for the welfare of its population.
The phrase “Guns vs Butter” succinctly represents the ongoing dilemma faced by countries as they navigate the balance between allocating resources for military capabilities and safeguarding the economic well-being of their people. This dilemma has emerged as a fundamental characteristic shaping the economic and political landscape of Pakistan. Since its inception, the nation has encountered considerable security challenges, arising from both internal dynamics and external pressures, necessitating significant allocations of resources towards defence initiatives. Nevertheless, the prioritization of military expenditure frequently undermines essential domains such as education, healthcare, and social development.
Origination of the Concept of Guns vs Butter
‘Butter’ stands for non-security things that make people’s lives better, like roads, schools, hospitals, and parks. The word ‘guns’ refers to both security items like troops and civilian support staff as well as military gear like tanks, weapons, and ships. Because these two types of goods are mutually exclusive, a government can’t make one better without hurting the other. Alliances are a common way for states to try to share the cost of security. This lets a country make fewer guns itself and put its money and time into making social goods. If there is no need for violence, then spending money on guns is wasteful and could have been better used on butter. When there is war, on the other hand, the line between production and potential gets smaller because people and things are destroyed. In turn, this makes it harder for the government to create social goods and for everyone to profit from them. (Poast, 2019: 223–239).
The first well-known use of the term was likely in Nazi Germany. Minister of Propaganda Joseph Goebbels said in a speech on January 17, 1936, “We can do without butter, but not without arms, no matter how much we love peace.” You can’t shoot with butter, but you can with guns.” Using the same idea, Hermann Göring, another Nazi official, said in a speech in the summer of the same year, “Guns will make us strong; butter will only make us fat” (The Columbia World of Quotations, 1996). This phrase was used by US President Lyndon B. Johnson to get the attention of the national news media as they had stories about the economy and national defence.
This phrase was also used by British Prime Minister Margaret Thatcher in a speech at the old Kensington Town Hall in 1976. She said, “The Soviets put guns over butter, but we put almost everything over guns” (Prime Minister Margaret Thatcher’s Speech at Kensington Town Hal, 1976).
The rationale for Guns over Butter
Pakistan’s defence planning and budget have been significantly influenced by the South Asian political and geopolitical landscape. Pakistan’s relations with India’s military posture led to increased defence spending, particularly during the 1970s under leaders like Bhutto and General Zia. Zia’s military background and the geopolitical climate, including the Soviet invasion of Afghanistan, prompted a substantial military expansion, with the army nearly doubling in size and significant growth in naval and air forces. Throughout the 1980s and 1990s, defence spending remained high due to a perceived threat, despite external pressures to reduce it. Zia’s refusal to cut defence budgets was based on the belief that Pakistan needed to match military capabilities with potential adversaries. This justification for high defence spending was communicated to both foreign aid donors and the Pakistani populace to prevent budget cuts. The ongoing geopolitical tensions in South Asia and historical conflicts have complicated the balance between military and social spending, hindering Pakistan’s progress in poverty alleviation and sustainable economic growth. The challenge of balancing military expenditure with social welfare reflects broader national priorities and the need for a robust defence strategy amid persistent security concerns.
The Soviet invasion of Afghanistan significantly influenced Pakistan’s threat perception, prompting Islamabad to believe that Moscow aimed to extend its reach through Pakistan. This perceived threat facilitated Pakistan’s military modernization and escalated tensions with India. Exploiting U.S. fears, Pakistan sought arms, leveraging the situation to gain quality weaponry including nuclearization. General Zia’s policies further entrenched this strategic alignment with the U.S. during the 1980s. Pakistan faces persistent internal challenges, including political instability, economic distress, and societal fragmentation. Despite efforts towards democracy since 1985, elected governments have frequently been dismissed, hindering progress. The nation grapples with ethnic tensions, unemployment, and rising violence, leading to increased defence spending. Resource management issues exacerbate the situation, with budget decisions often made by a select few, limiting democratic accountability.
Defence Expenditure of Pakistan
Here are the sector-wise percentages of budget allocations for Pakistan in the fiscal years 2023-24 (Budget and Revised Budget) and 2024-25:
Consequences
Pakistan’s defence expenditure significantly impacts its economy, human development, social security, education, health, and overall economic development. In the fiscal year 2023-24, approximately 17.5% of the national budget, equating to about PKR 1.8 trillion, was allocated to defence, overshadowing development sectors like health and education, which received less than 5%. This heavy defence spending contributes to a stagnating GDP growth rate of 2-3%, as highlighted by the World Bank, and exacerbates fiscal challenges with a debt-to-GDP ratio exceeding 80%. Consequently, Pakistan relies heavily on IMF bailouts and external loans.
The Human Development Index (HDI) ranking of Pakistan is concerning, positioned at 161 out of 191 countries in 2023. This low ranking reflects inadequate health, education, and income outcomes, with over 35% of the population living below the poverty line. The focus on defence spending has widened inequality, leaving millions without access to essential services. Social security programs are also suffering due to this misallocation of resources, with only PKR 364 billion allocated for welfare in 2023-24, a stark contrast to defence spending. This limits the effectiveness of cash transfer programs crucial for poverty alleviation. Despite the high defence budget, Pakistan continues to face internal security challenges, which further drain resources intended for civilian welfare.
In education, Pakistan invested less than 2% of its GDP, significantly lower than the South Asian average of 4%. This underfunding contributes to poor literacy rates and inadequate public school infrastructure, hindering the country’s global competitiveness and innovation potential. The health sector is similarly underfunded, with health expenditure at just 0.6% of GDP, resulting in high infant mortality rates and inadequate healthcare infrastructure, as evidenced during the COVID-19 pandemic. Economic development is stunted, with a GDP per capita of approximately $1,650, lagging behind regional peers like India and Bangladesh. High defence spending restricts fiscal space for transformative projects and deters foreign direct investment, which fell to $1.45 billion in 2023.
Conclusion
Pakistan’s defence-heavy budget misaligns with its socio-economic needs. A strategic reallocation of resources towards education and health could catalyze human development and foster sustainable economic growth, ultimately improving living standards for its citizens while maintaining necessary defence capabilities. Pakistan’s “guns vs. butter” dilemma underscores the ongoing struggle to balance military spending with social welfare needs, a critical issue in public economics. The country has historically prioritized defence due to security threats, particularly from India and internal unrest, resulting in military expenditures consuming about 17.5% of the national budget for 2023-24. In stark contrast, essential sectors like health and education receive less than 5% of the budget, reflecting a significant misallocation of resources.
This heavy focus on defence has dire consequences for human development, as evidenced by Pakistan’s low ranking of 161 out of 191 on the Human Development Index and over 35% of the population living below the poverty line. The underfunding of education and healthcare has hindered human capital development and economic growth, contributing to a stagnant GDP growth rate of 2-3%. Additionally, high military spending restricts fiscal space for transformative social projects and discourages foreign investment. To overcome these challenges, a strategic reallocation of resources.
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