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The economics of arms imports after the end of the cold war

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  • Michael Brzoska †

Abstract

Arms transfers are financed through a variety of means, including cash payments, barter trade, military aid and credit. The fiscal and economic effects of these various forms of arms transfer financing differ. Data on the flow of arms transfers, as provided by international sources on the arms transfers tell little about actual economic burdens. During the Cold War, military aid and credit financing had larger shares in overall funding of arms imports, particularly by developing countries. After the end of the Cold War, levels of military aid are sharply reduced. Little is known about credit funding. However, measured by an opportunity cost method, it seems that indebtedness due to arms imports did not increase as much during the 1990s as it had during the 1980s. This is another indicator that the arms trade has become more commercial, with customers needing to be able to pay for the imports. Less financially well-off customers have become less important for the producers of new weaponry, and instead import old weapons, or small arms. The differentiation according to financial criteria among customers in the military market increased in the 1990s.

Suggested Citation

  • Michael Brzoska †, 2004. "The economics of arms imports after the end of the cold war," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 111-123, April.
    • Handle: RePEc:taf:defpea:v:15:y:2004:i:2:p:111-123
    DOI: 10.1080/1024269032000110496
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    1. Devarajan, Shantayanan & Swaroop, vinaya, 1998. "The implications of foreign aid fungibility for development assistance," Policy Research Working Paper Series 2022, The World Bank.
    2. Brzoska, Michael & Ohlson, Thomas, 1987. "Arms Transfers to the Third World, 1971-85," OUP Catalogue, Oxford University Press, number 9780198291169, Decembrie.
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    Cited by:

    1. Erdal Karagol, 2005. "Defence expenditures and external debt in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(2), pages 117-125.
    2. Pamp, Oliver & Lebacher, Michael & Thurner, Paul W. & Ziegler, Eva, 2021. "Explaining destinations and volumes of international arms transfers: A novel network Heckman selection model," European Journal of Political Economy, Elsevier, vol. 69(C).
    3. Auer, Daniel & Meierrieks, Daniel, 2021. "Merchants of death: Arms imports and terrorism," European Economic Review, Elsevier, vol. 137(C).
    4. Oliver Pamp & Florian Dendorfer & Paul W. Thurner, 2018. "Arm your friends and save on defense? The impact of arms exports on military expenditures," Public Choice, Springer, vol. 177(1), pages 165-187, October.
    5. Kazunori Tanigaki, 2006. "Defense Sector, Armaments-Labor Ratio And National Security," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(1), pages 59-71.
    6. Yu Wang, 2013. "Veto Players and Foreign Aid Inflows," Oxford Development Studies, Taylor & Francis Journals, vol. 41(3), pages 391-408, September.
    7. repec:gig:joupla:v:5:y:2013:i:2:p:71-103 is not listed on IDEAS

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