''Peace dividend'' was a political slogan popularized by US President George H. W. Bush and UK Prime Minister

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...

in the light of the 1988–1991

dissolution of the Soviet Union The dissolution of the Soviet Union, also negatively connoted as rus, Разва́л Сове́тского Сою́за, r=Razvál Sovétskogo Soyúza, ''Ruining of the Soviet Union''. was the process of internal disintegration within the Sov ...

, that described the

economic An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...

benefit of a decrease in defense spending. The term was frequently used at the end of the

Cold War The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because t ...

, when many Western nations significantly cut

military spending A military budget (or military expenditure), also known as a defense budget, is the amount of financial resources dedicated by a state to raising and maintaining an armed forces or other methods essential for defense purposes. Financing militar ...

such as Britain's 1990

Options for Change Options for Change was a restructuring of the British Armed Forces in summer 1990 after the end of the Cold War. Until this point, UK military strategy had been almost entirely focused on defending Western Europe against the Soviet Armed Forces, ...

defence review. It is now used primarily in discussions relating to the guns versus butter theory.

Validity

While economies do undergo a

recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...

after the end of a major conflict as the economy is forced to adjust and retool, a "peace dividend" refers to a potential long-term benefit as budgets for defense spending are assumed to be at least partially redirected to social programs and/or a decrease in taxation rates. The existence of a peace dividend in real economies is still debated, but some research points to its reality.Sanjeev Gupta, Benedict Clements, Rina Bhattacharya, and Shamit Chakravarti (2002)
"The Elusive Peace Dividend"
at ''

Finance & Development ''Finance & Development'' is a quarterly journal published by the International Monetary Fund (the IMF). The journal publishes analysis on issues related to the financial system, monetary policy, economic development, poverty reduction, and ...

'', a quarterly magazine of the IMF. A political discussion about the peace dividend resulting from the end of the

involves a debate about which countries have actually scaled back military spending and which have not. The scale back in defense spending was mainly noticeable in

Western Europe Western Europe is the western region of Europe. The region's countries and territories vary depending on context. The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the ancient Mediterranean ...

and in the

Russian Federation Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-eig ...

. The

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

, whose military spending was rapidly reducing between 1985 and 1993 and remained flat between 1993 and 1999, has dramatically increased it after

September 11, 2001 The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commerc ...

, to fund conflicts like the

War on Terror The war on terror, officially the Global War on Terrorism (GWOT), is an ongoing international counterterrorism military campaign initiated by the United States following the September 11 attacks. The main targets of the campaign are militant ...

, the

War in Afghanistan War in Afghanistan, Afghan war, or Afghan civil war may refer to: *Conquest of Afghanistan by Alexander the Great (330 BC – 327 BC) * Muslim conquests of Afghanistan (637–709) *Conquest of Afghanistan by the Mongol Empire (13th century), see al ...

and the

War in Iraq This is a list of wars involving the Republic of Iraq and its predecessor states. Other armed conflicts involving Iraq * Wars during Mandatory Iraq ** Ikhwan raid on South Iraq 1921 * Smaller conflicts, revolutions, coups and periphery confli ...

Notes

{{DEFAULTSORT:Peace Dividend Political economy Peace Military economics Dissolution of the Soviet Union