The Economics of the International Arms Trade
Sales of arms are a significant component of international trade and raise a range of pressing policy issues. After a short review of the market, this paper provides a formal model of the trade which allows for competing, forward-looking suppliers whose welfare depends on both the economic benefits from the sales and the security repercussions of recipient behaviour. The recipient's behaviour depends on their military capability which is a function of the stock of arms they have acquired. We first examine myopic recipients, whose behaviour depends on current stocks, then forward-looking recipients for whom questions of the time-consistency and the credibility of supplier threats to embargo, or promises to resupply become crucial. Finally, we examine the impact of supplier cooperation of the sort currently being discussed in the UN Security Council.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Mar 1993|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:770. 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: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.