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Industrial policies in the defense sector

In: Handbook of Defense Economics

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  • Hartley, Keith

Abstract

Voluntary military alliances, such as NATO, are often criticized for failing to exploit the opportunities for equipment standardization and free trade. However, nationalism means that governments adopt a variety of industrial policies for purchasing defense equipment, leading to departures from the competitive free trade model. Different procurement policies offer varying combinations of military and national economic benefits. Work sharing can be achieved through international collaboration, licensed production and offsets. Policies designed to improve efficiency in equipment procurement also affect the military production function. Job losses associated with the closure of military bases and defense plants raise issues of conversion.

Suggested Citation

  • Hartley, Keith, 1995. "Industrial policies in the defense sector," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 16, pages 459-489, Elsevier.
    • Handle: RePEc:eee:hdechp:1-16
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    Cited by:

    1. Vladan Holcner & Marek Sedlačik & Jaroslav Michálek & Jakub Odehnal, 2014. "Transaction Costs in International Armaments Cooperation," Prague Economic Papers, Prague University of Economics and Business, vol. 2014(2), pages 217-232.
    2. Economou, Emmanouel/Marios/Lazaros & Metaxas, Theodore, 2011. "EU and US security policy from the cold war era to the 21st century: the institutional evolution of cfsp and the factors that determine the American military supremacy," MPRA Paper 41003, University Library of Munich, Germany, revised 2011.
    3. Carlos Barros, 2005. "Governance and Incentive Regulation in Defence Industry Enterprises: A Case Study," European Journal of Law and Economics, Springer, vol. 20(1), pages 87-97, July.
    4. Nathalie Lazaric & Valerie Merindol & Sylvie Rochhia, 2011. "Changes in the French Defence Innovation System: New Roles and Capabilities for the Government Agency for Defence," Industry and Innovation, Taylor & Francis Journals, vol. 18(5), pages 509-530.
    5. Marcus Matthias Keupp, 2021. "Effectiveness of Military Performance," Springer Books, in: Defense Economics, chapter 0, pages 67-91, Springer.
    6. Jurgen Brauer & J Paul Dunne, 2005. "Arms Trade Offsets and Development," Working Papers 0504, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    7. Guido Schaefer, 2005. "Economics: Friend or Foe of Politics to Support Strategically Important Domestic Industries?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(2), pages 193-200, June.

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