Human Capital and National Security

This study evaluates the relationship between a country’s human capital and its capacity to achieve, over time, effective national security. We show that an increase in the importance that a country attributes to its future, and/or in the effectiveness of its education system, leads to a decline in its current civilian services but to increases in its future human capital, civilian services, national security, and social welfare. Data for the Israeli-Iranian arms race confirm our predictions and show that a predilection for short-term political or personal gains impedes investment in human capital and inhibits future economic growth, national security and social welfare.