Kokia buvo gynybos išlaidų našta Lietuvai tarpukariu? | How Large was the Defence Spending Burden in Interwar Lithuania?

Abstract

This paper discusses recent quantitative research on defence spending in interwar Lithuania, and providesa comparison between the burden of defence spending in Lithuania, Latvia, Estonia, Finland andPoland in 1924, 1938 and 1939, which are the only years with available data on the total expenditure inLithuania. Although contemporary mainstream economic science does not consider the military sectoras unproductive (it ‘produces’ security services), it still sees it as a burden to the economy, becausedefence spending decreases private consumption, along with private and public civil investment. Twoindicators of this burden are discussed: the share of defence spending in total state spending, and theratio of defence spending to gross national income (GNI) or gross domestic product (GDP). In recentresearch on defence spending in interwar Lithuania, only the size and changes in nominal expenditurehave so far been measured, without taking into consideration changes in the purchasing power of thelitas. The main findings of the application of the second indicator include the fact that among the Balticcountries (including Finland), the Latvian economy was most heavily burdened by defence spending in1924–1925. On the eve of the Second World War, however, Lithuania became the leader. Key words: defence economics, defence spending burden, share of defence expenditure in the statebudget, ratio of defence expenditure to total output, comparison of defence spending burdens.