Military expenditure is accepted as a symbol of a nation`s commitment to its security. Based on the previous studies, several potential explanations of the determinants of military expenditure in Korea are examined by asking the following research questions: 1. Does budgetary incrementalism affect military budget formulation in Korea? 2. What economic factors are likely to influence the defense budget allocation process? 3. Can military confrontation between the two Koreas be one important explanation of the defense spending level? 4. Can U.S. military aid be another factor? 5. Can the presidents` policy priorities affect the nation`s defense spending level? Regression analysis demonstrates the significance of budgetary incrementalism in defense budgeting. Incrementalism also shapes military procurement expenditures. As the economic capability of Korea increases, the relative importance of allocation for defense decreases. Since the elasticity of the military on economic growth is less than one, the military has the attribute of a necessity good in Korea. There is no statistical evidence that a trade-off exists between welfare and military expenditure. Also, as the "action-reaction model" suggests decision-making on security issues in South Korea has been sensitive to the behavior of the primary military adversary, North Korea.