The problem of allocating resources to defense

Abstract

This article addresses the problem that societies face for properly allocating resources to grant security to their members. It examines the methods and ways for setting and distributing these resources to obtain enough military capabilities to face threats. The problem: the choice of an allocation that optimizes social welfare is an old and constant concern for public policies. The main novelty of this article is to explore this problem from the bounded rationality of human beings, i.e. choices made under imperfect information, preferences unsupported by economic rationality or the constrained effectiveness of non-market arrangements for deciding adequately. These issues may drive to allocations that do not obtain the largest welfare.