INSIDE-OUT ECONOMICS · CRACK
NELSON vs DELIA · 4 REPORTS
THE MILITARY BURDEN TRAP · DEFENCE MINISTER DUEL

WELCOME TO THE UNITED STATES OF NORFORK

Norfork already spends 2% of GDP on defence. Public-good theory explains why government provides collective security—but does it tell us how much to spend?

DEFENCE MINISTER 01PLAYER NELSONReact to each report. Choose the policy you believe best protects Norfork's wellbeing.
VS
DEFENCE MINISTER 02PLAYER DELIAFace exactly the same evidence. Make your own choices and lock them in.
YOUR MISSION Four reports—Threat, Alliance, Industry, Political. Both players react to each report on the same screen. Your decisions build Norfork's military burden, but the totals stay secret until the final showdown.
FICTIONAL CASE · MARKET FAILURE vs GOVERNMENT FAILURE

PLAYER NELSONCHOOSE YOUR RESPONSE
PLAYER DELIACHOOSE YOUR RESPONSE
Neither player's spending total is shown. Choices lock independently.
THE VERDICT · REVEAL 1 OF 3

YOUR BUDGETS ARE IN. WHO MADE THE BEST DECISIONS?

THE MILITARY BURDEN SPECTRUMShare of Norfork GDP
OPTIMUM3.2%
NELSON
DELIA
0%1%2%3%4%5%6.5%
3.2% is calculated from the model’s welfare-maximising choices—not a real-world estimate.
THE VERDICT · REVEAL 2 OF 3

FOUR REPORTS. TWO VERY DIFFERENT BUDGETS.

Each decision added spending. The bars show where the increases came from.

Existing 2%ThreatAllianceIndustryPolitics
The same total can buy different capabilities. Spending alone cannot reveal welfare.
THE VERDICT · REVEAL 3 OF 3

PUBLIC GOODS JUSTIFY DEFENCE. NOT ANY BUDGET.

THE ECONOMIC RULE
Marginal social benefit = Marginal social cost
Increase defence until the extra security is worth exactly what society gives up.

MARKET FAILURE

Collective defence is a public good. Markets tend to underprovide it.

WHY GOVERNMENT SPENDS

GOVERNMENT FAILURE

Lobbying, alliances and election promises can distort spending choices.

WHY THE BUDGET MAY BE WRONG
WHY 3.2%? In Norfork's fictional model, targeted defence (+0.8%) and shared alliance capability (+0.4%) generate the highest net welfare. Industry and election pledges add costs without enough extra security. 2% + 0.8% + 0.4% = 3.2%.
THE CRACK: An actual military burden is a political outcome—not proof of the public-good optimum.
NEXT: MACHINERY · What drives spending away from the optimum?