Defense expenditures-technological innovation relationship: Tournament model in the Cold War period

Many technologies used today are based on inventions and technologies discovered during the Cold War. It is seen that the products and technologies that emerged in this period have superior features than each other. The technology race, which started with the arms race, creates externalities and is transferred to the civil sector, allowing the production of high value-added products. Thus, it is thought that it contributes to the growth of the country. In this context, the theoretical and basic concepts of defense expenditures, defense industry and what are effective in determining defense expenditures are explained. In this study, Tournament Model is used in the Cold War Period. The Tournament Model was adapted to this period with the frequent threat of war without war. The development of technological innovation and weapon systems has been examined by entering the armament and technology race of the USA and the USSR, which are of the same power. At the same time, the technology race that started with the arms race created externality, allowing the production of high value-added products by transferring technology to the civilian sector. Thus, it is considered to contributes to the growth of the country. There are conditions for the Tournament Model to work. The first condition should be a high amount of war expenditures. The second condition is that gunpowder weapons and gunpowder technology should be used intensively... The third condition is that military inventions and innovations must hardly be met with difficulties in achieving them. In addition to these three conditions, the condition of the threat of war and the competition of huge countries of great power were brought as innovations. Thus, it was applied to the Cold War period in the 20th century, making it possible to process this model. In the economics literature, The Cournot Model, which includes quantity competition dynamics, the Bertrand Model, which includes price competition dynamics, and the Cartel Model, which includes monopolization dynamics, are inspired by three different market situations. According to the results of the model; technologies used, weapons systems and defense expenditures are at the same level for both forces. However, the capital and wealth accumulation of the USA; It is far above the capital and wealth accumulation of the USSR. The USSR's share of military expenditures within GDP remains high compared to the United States. Western Bloc's domination of the seas, geo-political conditions and geographical location; It has a strategic advantage over the Eastern Bloc. This caused the United States to become the winner of the Cold War, eliminating the competitiveness of the USSR, losing and leaving the market.