The problem of allocating resources to defence

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. This problem: the choice of an allocation that optimises social welfare is an old and constant concern of public policies. The main novelty of this article is exploring this problem from the bounded rationality of the human being, 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.