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Sources of inefficiency in the procurement of major weapon systems. Estimates for the German case

Author

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  • Michael Brzoska

    (Institute for Peace Research and Security Policy at the University of Hamburg, Germany)

Abstract

The objective of this article is to provide a rough estimate of inefficiencies in German major weapons procurement. It is possible to derive estimates of procurement inefficiencies for 2022 programs—arising from a failure to exploit economies of scale, the complexity of co-production projects, cost overruns and time delays, and low weapon utilization rates. As the necessary data is only partly available to the public, these estimates rely on several assumptions and so are presented as ranges. This article identifies two main causes of symptoms of inefficiency in German major weapons procurement: (a) technological requirements beyond the reach of arms producers at the time decisions on procurements were made, and (b) protectionism, i.e. the favoring of national arms producers. Overall, it is estimated that German taxpayers could have been spared a least a third of total procurement costs had these inefficiencies been avoided.

Suggested Citation

  • Michael Brzoska, 2024. "Sources of inefficiency in the procurement of major weapon systems. Estimates for the German case," Economics of Peace and Security Journal, EPS Publishing, vol. 19(1), pages 5-22, April.
    • Handle: RePEc:epc:journl:v:19:y:2024:i:1:p:5-22
    DOI: 10.15355/epsj.19.1.5
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    File URL: https://www.epsjournal.org.uk/index.php/EPSJ/article/view/393
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    More about this item

    Keywords

    arms; procurement; efficiency; Germany;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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