Elements in Defence Economics – serie

The United States defence economy is remarkable for a number of reasons - including sheer size. It receives a significant (albeit decreasing) share of GDP and has a significant international footprint. Its purpose is to provide the resources for national defence - against a set of complex and capable adversaries. The main players in the defence economy are households, and the Federal Government. The associated interactions determine the resources provided for national defence and their allocation among various defence needs. This Element focuses primarily on interactions between government and industrial suppliers within the institutional peculiarities of the defence marketplace. This includes the developments that have determined the course of defence industry consolidation post-Cold War. The authors also highlight the persistent gap between resources available for defence and the means to execute the National Security Strategy. Finally, they offer some tentative thoughts regarding developments likely to shape the defence economy's future.

The acquisition and procurement of major weapons systems is fraught with difficulties. They tend to be delivered late, over budget and unable to meet requirements. This Element provides an economic analysis of why this happens. Market structure, demand by the military and supply by the arms firms, shapes the conduct of the agents and generates the poor performance observed. The military are trying to counter an evolving threat, subject to a budget constraint, high R&D costs and new technologies. The interaction between a government made up of warring tribes and arms firms with considerable market and political power is further complicated by a set of what economists call 'principal-agent' problems, which are examined. While the poor performance has prompted many countries to propose reforms, the difficulty of the task and the institutional incentives faced by the actors mean that the reforms rarely solve the problem.

The UK has been collaborating with international, primarily European partners in the design, development and production of advanced combat aircraft for over sisty years. Driven by a combination of rising costs and limited domestic markets, collaboration has also been a highly political act involving a combination of national, industrial and technological interests. Over the years, the form of collaboration has evolved, in some cases leading to the creation of transnational companies. The UK has been a pioneer of globalisation in the defence industry, establishing a strong presence inside the US defence market and has become a significant partner with American companies in key military aerospace programmes. This has contributed to divisions within the European military aerospace industry which are likely to continue into the next generation of combat aircraft.

This Element presents an analytical model for assessing the success or failure of innovative large-scale defence projects. To achieve this goal, it constructs a theoretical model based on a three-angle analysis: the International System, the innovative potential, and the domestic political arena. Each angle of analysis generates an independent variable, namely: level of threat, technological feasibility, and political consensus. It is held that technological feasibility and political consensus are necessary and conjointly sufficient conditions to explain the success or failure of large-scale defence projects. The success of the innovative defence projects is strongly and positively related to the level of external threat. The initial hypothesis is tested by scrutinizing three specific projects in the United States (Future Combat Systems, The B-2 Stealth Bomber and the F-35). The conclusion is that the model is sound and might be generalized to analyse the prospects of success or failure of other large-scale defence projects.

This Element presents an analytical model for assessing the success or failure of innovative large-scale defence projects. To achieve this goal, it constructs a theoretical model based on a three-angle analysis: the International System, the innovative potential, and the domestic political arena. Each angle of analysis generates an independent variable, namely: level of threat, technological feasibility, and political consensus. It is held that technological feasibility and political consensus are necessary and conjointly sufficient conditions to explain the success or failure of large-scale defence projects. The success of the innovative defence projects is strongly and positively related to the level of external threat. The initial hypothesis is tested by scrutinizing three specific projects in the United States (Future Combat Systems, The B-2 Stealth Bomber and the F-35). The conclusion is that the model is sound and might be generalized to analyse the prospects of success or failure of other large-scale defence projects.

This Element presents an economic analysis of Augustine's Laws and Weapons Systems. It explores and evaluates their economic content and subjects them to critical analysis. The Element is both theoretical and empirical and the empirical work uses an original UK data set on military aircraft over the period 1934 to 1964. The period embraces major technical changes involving war and peace and the shift to jet powered aircraft.

This Element presents an economic analysis of Augustine's Laws and Weapons Systems. It explores and evaluates their economic content and subjects them to critical analysis. The Element is both theoretical and empirical and the empirical work uses an original UK data set on military aircraft over the period 1934 to 1964. The period embraces major technical changes involving war and peace and the shift to jet powered aircraft.

This Element introduces students, policy-makers, politicians, governments and business-people to this new discipline within economics. It presents the recent history of the subject and its range of coverage. Traditional topics covered include models of arms races, alliances, procurement and contracting, as well as personnel policies, industrial policies and disarmament. Newer areas covered include terrorism and the economics of war and conflict. A non-technical approach is used and the material will be accessible to both economists and general readers.

Written for an audience of students, general readers, and economists alike, this Element is a primer on the field of the economics of conflict and peace. It offers a reasonably comprehensive, systematic, and detailed overview - even if in broad strokes - of the field's orthodox and heterodox history of thought and current theories and evidence. The authors view this Element as a baseline account on which to build a future, separate and more fully developed, work on the economics of peace, economic growth, and human development. Altogether, the Element contextualizes the field of conflict and peace economics, outlines its history of thought, highlights examples of current theoretical and empirical scholarship in the field, and maps trajectories for further research.

The six monarchies on the Arabian Peninsula have devoted enormous sums to defense in past decades. Nevertheless, the gap between their expensive armaments and their capacity to deter aggression and/or project military strength has narrowed but little in that time. This Element takes a political economy approach and argues that structural factors inherent in the Gulf states' political systems prohibit civilian oversight of the defense sector and are responsible for this outcome. Lax restraints on military outlays, in turn, enable widespread corruption, lead to large-scale waste, and account for the purchasing of unneeded, unsuitable, and incompatible weapons systems. The Element explores the challenges caused by plummeting oil prices and the resulting budget cuts and considers the development of domestic defense industries in Saudi Arabia and the UAE, intended as a part of their economic diversification program. The setbacks of the Saudi-led coalition's on-going war in Yemen starkly illustrate the narrative.