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This report provides military expenditure estimates for the Northern Tier countries of the Warsaw Pact (Czechoslovakia, the German Democratic Republic, and Poland) and Hungary, assesses the political and economic factors that determine these spending levels, and discusses the probable course of military spending in these countries over the next several years. These estimates suggest that the defense budgets reported by the East Europeans contain most major components of military spending. A statistical analysis of factors that may determine military spending levels indicates the primary determinant is available resources — i.e., utilized national income. The prospects for large surges in military spending in the next few years are therefore low.

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