In my opinion, James Fearon misses an opportunity to link theories together in a productive way. Of the global decline of military spending (% GDP) and mobilization (soldiers per 1,000 citizens) in the postwar era:
On the domestic side of things, there is pretty good evidence that the spread of democracy has been a significant factor. Not worth getting into the details here, but if you look at the data country by country you find that on average, when countries transition to democracy their military spending and army sizes go down, quite substantially.* In fact they tend to go down when they transition from very autocratic to only somewhat autocratic (that is, to “anocracies”, or semi-democracies using the Polity data). The effect of a democratic transition on arms levels in the state in which the transition occurs looks to be larger than the effect of transitions in neighbors on a state’s own military spending, although this is hard to be sure about statistically due to endogeneity issues. I would guess that most of the democracy effect is a domestic matter—for instance, autocracies want bigger militaries to help put down domestic opposition or to pay off cronies, or democracies want smaller militaries to lower coup threats—but some of it might also be an international effect. That is, if democracies want smaller militaries then this could reduce the demand for big armies in their neighbors.Fearon is reporting a trend, not advancing a well-formulated argument, but I still think this is fairly weak. Here are some other things we know about violence in the postwar era:
-- Interstate violence is at the lowest point in the capitalist era. Given that, it makes perfect sense for military burdens to be at a low point as well. We do not know for certain why the world is so peaceful, but quite a lot of IR theory suggests that American hegemony (which Fearon does not mention) and nuclear weapons (which he does) may have something to do with it. Regarding the former, the American security umbrella covers other democracies and (sometimes) extends to countries transitioning to democracy -- the pacification and democratization of Europe since 1945 is obviously the most pronounced example -- so that could help explain the domestic patterns without telling a ad hoc story about democracies being worried about coup threats (which strikes me as being ahistorical and is in contradiction to the best evidence). Regarding the latter, technology should push down military cost burdens and personnel needed as more and more security mechanisms become computerized and/or automated, at least during times of peace. Nukes are part of that but so are drones, missile technology, cyber capabilities, etc. Given the decline of international conflict and the lower marginal costs of defense why wouldn't we expect the military burden to decrease?
-- As for the fact that the drop in military burden has happened most in democracies I'd note several things. First, it appears from Fearon's description that many democracies were quite heavily armed in the middle of the 20th century. In Fearon's graph at the link above this is quickly seen by the number of people per 1,000 that were in the military in 1945-1950 in "the West". Given that, I don't think a regime-type explanation works very well. Second, democracies are richer, and richer countries should (on average) spend less on their militaries as a percentage of GDP. That is, there is a almost certainly diminishing returns to spending on security: the 10 trillionth dollar spent on national defense will not get you as much security as the 10 millionth. Among consolidated democracies only the U.S. and Israel spend more than 3% of their GDP on their militaries, and I think there is general agreement that much of the American spending is due to rent-seeking, bureaucratic politics, and its ongoing hegemonic project rather than its regime type.
-- Almost all conflict which does occur in the international system is intra-state. Intra-state violence tends to happen more in non-democracies than in democracies. Countries in a state of conflict should dedicate more of their resources towards the military than countries in a state of peace. Therefore, because they are more peaceful, democracies should spend fewer resources on the military. The only wrinkle in this involves transitions to democracy, which often involve conflict. The way I read Fearon he's saying that after transitioning to democracy the military burden decreases; I'm not sure if his data could tell us what's happening during democratic transitions, but it would be interesting to know.
I'm nit-picking a bit here, albeit for a reason. Fearon found some interesting trends, reported them, and then thought-aloud about what might be causing them. There's nothing wrong with that. But the quick-reflex pivot to explanations based on local factors such as regime type is, for me, unsatisfying. Once one takes that step it makes it difficult to think about broader systems, and makes committing an ecological fallacy much more likely. If we're seeing a systemic trend -- lower military burdens everywhere -- then we should seek to make systemic arguments which can account for the trends. Too frequently we try to explain global phenomena by reference to local factors.