Table Of ContentThe Economics of Defence
Policy
A new perspective
Keith Hartley
Routledge Studies in Defence and Peace Economics
The Economics of Defence Policy
Since the end of the Cold War, the world has been faced with new regional con-
flicts, terrorism and threats from the proliferation of weapons of mass destruc-
tion and from rogue states. The world remains uncertain, unstable and insecure
with continued threats to global peace and security. The world economic crisis
has also threatened government spending with defence as a candidate for spend-
ing cuts. Choices have to be made about the size of a nation’s defence budget, its
allocation between nuclear and conventional forces, between equipment and per-
sonnel and between air, land and sea forces. Major reductions in defence spend-
ing and the challenge of maintaining security with increasingly limited resources
will confront the defence budgets of all nations.
This book identifies the typical questions raised by economists when studying
defence policy, shows how simple economic analysis can be used to answer
these questions and provides a critical evaluation of defence policy. Controver-
sial and illuminating, this pioneering work subjects the myths, emotion and
special pleading which dominate defence debates to the close scrutiny of eco-
nomic analysis and critical appraisal. It identifies the range of choices facing all
governments with examples taken from the UK, Europe and the USA.
This valuable contribution should be of interest to undergraduates, postgradu-
ates and researchers focusing on defence economics, as well as those working in
the military, defence ministries and defence industries.
Keith Hartley is Emeritus Professor in Economics at the University of York,
UK.
Routledge studies in defence and peace economics
Edited by Keith Hartley
University of York, UK
and
Jurgen Brauer
Augusta State University, USA
1 European Armaments Collaboration
Policy, problems and prospects
R. Matthews
2 Military Production and Innovation in Spain
J. Molas- Gallart
3 Defence Science and Technology
Adjusting to change
R. Coopey, M. Uttley and G. Spiniardi
4 The Economics of Offsets
Defence procurement and countertrade
S. Martin
5 The Arms Trade, Security and Conflict
Edited by P. Levine and R. Smith
6 Economic Theories of Peace and War
F. Coulomb
7 From Defense to Development?
International perspectives on realizing the peace dividend
A. Markusen, S. DiGiovanna and M. Leary
8 Arms Trade and Economic Development
Theory, policy, and cases in arms trade offsets
Edited by Jurgen Brauer and J. Paul Dunne
9 Exploding the Myth?
The peace dividend, regions and market adjustment
Derek Braddon
10 The Economic Analysis of Terrorism
Tilman Brück
11 Defence Procurement and Industry Policy
Edited by Stefan Markowski and Peter Hall
12 The Economics of Defence Policy
A new perspective
Keith Hartley
Other titles in this series include:
The Economics of Regional Security
NATO, the Mediterranean, and Southern Africa
Jurgen Brauer and Keith Hartley
The Economics of Defence
Policy
A new perspective
Keith Hartley
First published 2011
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
270 Madison Avenue, New York, NY 10016
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2011 Keith Hartley
Typeset in Times by Wearset Ltd, Boldon, Tyne and Wear
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Hartley, Keith.
The economics of defence policy: a new perspective/by Keith Hartley.
p. cm.
Includes bibliographical references and index.
1. Military policy–Economic aspects. 2. Great Britain–Defenses–Costs.
3. Great Britain–Military policy–Economic aspects. I. Title.
HC79.D4H37 2010
355.0335–dc22 2010020532
ISBN: 978-0-415-27132-5 (hbk)
ISBN: 978-0-203-83877-8 (ebk)
To my wife and family:
Winifred
Adam, Rachel, Oliver and Imogen Hartley
Lucy Hartley
Cecilia, Martyn, Matthew, Katie and Sophie Ellis
Contents
List of figures xi
List of tables xii
Preface xiv
Abbreviations xvii
1 Economics and defence policy: an overview 1
2 How do economists analyse defence? 14
3 The case for defence 30
4 Defence budgets 48
5 The determinants of defence expenditure 63
6 Economics, politics and public choice analysis 83
7 Equipment procurement policy 95
8 NATO and equipment standardisation 116
9 The European Union: defence markets and industries 132
10 The European Defence Technological and Industrial Base 147
11 Evaluating international collaborative projects 168
12 The UK defence industrial base 183
13 Personnel policy 216
