Divergent military expenditure adjustments in Cambodia and Thailand following the border conflict: an analysis of their causes

Following the Cambodia–Thailand border conflict in July 2025, the two countries did not expand military expenditure in tandem; their adjustments diverged. This paper develops an analytical framework of "security shocks–supply-side constraints–adjustment pathways" to compare the two countries' military expenditure adjustments and to explain their causes. The findings show that Thailand modestly increased budgetary appropriations and equipment procurement, following a capital-intensive pathway, whereas Cambodia kept defence expenditure broadly stable as a share of GDP and strengthened its capabilities mainly by reinstating military conscription and relying on external assistance, following a manpower- and aid-intensive pathway. This divergence did not stem from differences in threat perceptions; it was determined by supply-side conditions, namely fiscal capacity, the defence industrial base, the structure of external assistance, and institutional decision-making procedures. Because fiscal resources, manpower and external assistance are partly substitutable, states exposed to a common security shock choose different combinations under different constraints. The paper contributes to understanding how small and medium-sized states manage trade-offs between security and development.