After a decade of unprecedented expansion, the level of world military spending is now falling, although modestly. Political developments in Europe and the success of arms control negotiations raise hopes for further reductions, however performance has not matched up to the promises, and formidable obstacles to limitations on defense spending still remain. This study analyses world military expenditures at the end of the 1980s and discusses its political and economic implications, paying special attention to recent events and the process of change that characterizes world military expenditure and its determinants. This revealing study will be of interest to students and teachers of international relations, peace studies, and strategic studies, as well as foreign affairs and defense officials.