IDEAS home Printed from https://ideas.repec.org/a/oup/jleorg/v34y2018i2p272-299..html
   My bibliography  Save this article

Global Arms Trade and Oil Dependence

Author

Listed:
  • Vincenzo Bove
  • Claudio Deiana
  • Roberto Nistic�

Abstract

We investigate how oil dependence affects the trade of weapons between countries. We argue that oil-dependent economies have incentives to transfer arms to oil-rich countries to reduce their risk of instability and, as a result, the chances of disruption in the oil industry. We employ gravity models of the arms trade and estimate the effect of both a local as well as a global oil dependence. Two key results emerge. First, the volume of arms transfers to a specific country is affected by the degree of dependence on its supply of oil. Second, global oil dependence motivates arms export to oil-rich countries even in absence of a direct bilateral oil-for-weapons exchange. Our results point consistently toward the conclusion that the arms trade is an effective foreign policy tool to securing and maintaining access to oil.

Suggested Citation

  • Vincenzo Bove & Claudio Deiana & Roberto Nistic�, 2018. "Global Arms Trade and Oil Dependence," Journal of Law, Economics, and Organization, Oxford University Press, vol. 34(2), pages 272-299.
  • Handle: RePEc:oup:jleorg:v:34:y:2018:i:2:p:272-299.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jleo/ewy007
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Margherita Comola, 2012. "Democracies, Politics, and Arms Supply," Review of International Economics, Wiley Blackwell, vol. 20(1), pages 150-163, February.
    2. Lei, Yu-Hsiang & Michaels, Guy, 2014. "Do giant oilfield discoveries fuel internal armed conflicts?," Journal of Development Economics, Elsevier, vol. 110(C), pages 139-157.
    3. Sandler,Todd & Hartley,Keith, 1999. "The Political Economy of NATO," Cambridge Books, Cambridge University Press, number 9780521630931, July - De.
    4. Christos Kollias & Kleanthis Sirakoulis, 2002. "Arms Racing and the Costs of Arms Imports: A Stochastic Model," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(2), pages 137-143.
    5. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    6. Seitz, Michael & Tarasov, Alexander & Zakharenko, Roman, 2015. "Trade costs, conflicts, and defense spending," Journal of International Economics, Elsevier, vol. 95(2), pages 305-318.
    7. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
    8. Navin A Bapat, 2011. "Transnational Terrorism, US Military Aid, and the Incentive to Misrepresent," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(3), pages 303-318, May.
    9. Ron P. Smith & Ali Tasiran, 2005. "The Demand for Arms Imports," Journal of Peace Research, Peace Research Institute Oslo, vol. 42(2), pages 167-181, March.
    10. Garfinkel, Michelle R. & Skaperdas, Stergios & Syropoulos, Constantinos, 2015. "Trade and insecure resources," Journal of International Economics, Elsevier, vol. 95(1), pages 98-114.
    11. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    12. Paul Levine & Ron Smith, 2000. "Arms Export Controls and Proliferation," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 885-895, December.
    13. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    14. Baier, Scott L. & Bergstrand, Jeffrey H. & Feng, Michael, 2014. "Economic integration agreements and the margins of international trade," Journal of International Economics, Elsevier, vol. 93(2), pages 339-350.
    15. Brauer, Jurgen, 2007. "Arms Industries, Arms Trade, and Developing Countries," Handbook of Defense Economics, Elsevier.
    16. Akerman, Anders & Seim, Anna Larsson, 2014. "The global arms trade network 1950–2007," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 535-551.
    17. repec:hal:journl:hal-00684160 is not listed on IDEAS
    18. Francesco Lippi & Andrea Nobili, 2012. "Oil And The Macroeconomy: A Quantitative Structural Analysis," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1059-1083, October.
    19. Levine, Paul & Smith, Ron, 1995. "The Arms Trade and Arms Control," Economic Journal, Royal Economic Society, vol. 105(429), pages 471-484, March.
    20. Levine, Paul & Smith, Ron, 2000. "The Arms Trade Game: From Laissez-Faire to a Common Defence Policy," Oxford Economic Papers, Oxford University Press, vol. 52(2), pages 357-380, April.
    21. Lutz Kilian, 2008. "A Comparison of the Effects of Exogenous Oil Supply Shocks on Output and Inflation in the G7 Countries," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 78-121, March.
    22. Paul Levine & Ron Smith, 1997. "The arms trade: winners and losers," Economic Policy, CEPR;CES;MSH, vol. 12(25), pages 335-370, October.
    23. Garcia-Alonso, Maria D.C. & Levine, Paul, 2007. "Arms Trade and Arms Races: A Strategic Analysis," Handbook of Defense Economics, Elsevier.
    24. Todd Sandler, 2000. "Arms trade, arms control, and security: Collective action issues," Defence and Peace Economics, Taylor & Francis Journals, vol. 11(3), pages 533-548.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olaf J. de Groot & Carlos Bozzoli & Tilman Bruck, 2015. "The Global Economic Burden of Violent Conflict," HiCN Working Papers 199, Households in Conflict Network.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jleorg:v:34:y:2018:i:2:p:272-299.. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) The email address of this maintainer does not seem to be valid anymore. Please ask Oxford University Press to update the entry or send us the correct email address or (Christopher F. Baum). General contact details of provider: https://academic.oup.com/jleo .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.