Abandoning the Peace Dividend: Bill Clinton and the Political Economy of Defense Conversion, 1989–2000

This chapter examines the presidential administration of Bill Clinton and his national defense policies. It argues that the post-Cold War “peace dividend”—the federal monies to be redirected from national defense toward social welfare—failed to materialize due to Clinton’s domestic agenda. In brief, Clinton focused on closing military bases and retraining unemployed defense workers in select states rather than “defense conversion” on a national scale. As Clinton’s reelection approached in 1994, attempts at defense conversion, which were intended to save money, appeared less necessary due to gains in the stock market and the growth of the economy. Moreover, Clinton concluded that defense conversion was politically untenable. This chapter shows that domestic politics—the economy, the 1994 election, and the politics of foreign policy—were the primary reasons that Clinton and officials in his administration resisted the retrenchment of U.S. foreign policy after the Cold War.