A model of the international arms market∗

Levine, Paul; Sen, Sudeshna; Smith, Ron

doi:10.1080/10430719408404776

Cited by 45 publications

(27 citation statements)

References 5 publications

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“…This holds true both at the analytical level and at the empirical level (we defer the discussion of the empirical difficulties until ). Weapons are often traded as part of a larger package that may include related aspects such as access to technology and spare parts and seemingly unrelated aspects such as offset agreements (Levine, Sen, and Smith 1994, 4; Levine and Smith 1997, 346). In one example from the 1980s, Smith, Humm, and Fontanel (1985, 241) note that the Belgian purchase of military vehicles from Bombardier of Canada was tied to landing rights in Toronto for the Belgian commercial airline, Sabena.…”

Section: Analytical Frameworkmentioning

confidence: 99%

“…In one example from the 1980s, Smith, Humm, and Fontanel (1985, 241) note that the Belgian purchase of military vehicles from Bombardier of Canada was tied to landing rights in Toronto for the Belgian commercial airline, Sabena. Furthermore, the close relationship between arms firms and national governments means that the production and trade of the weapons, not to mention research and development and marketing efforts, are often heavily subsidized by governments and that major international trades are more in line with national priorities than with the profit maximization goals of the private firms (Levine, Sen, and Smith 1994, 4; Smith, Humm, and Fontanel 1985, 242). In addition, the price at which weapons are traded need not be closely correlated with the cost of production, and different recipients may pay vastly different prices for identical products (Levine, Sen, and Smith 1994, 4; Levine and Smith 1997, 345–347).…”

Section: Analytical Frameworkmentioning

confidence: 99%

“…On the supply side, the export of weapons can be derived by maximizing a supplier’s welfare function, where welfare depends on the profit from as well as the security repercussions of the sale (Levine, Sen, and Smith 1994). Supply is thus determined by economic as well as strategic and political factors (Smith, Humm, and Fontanel 1985, 242–44).…”

Section: Analytical Frameworkmentioning

confidence: 99%

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Guns and Oil: An Analysis of Conventional Weapons Trade in the Post‐cold War Era

Khanna

Chapman

2010

Economic Inquiry

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"This paper analyzes the global conventional weapons trade between 1989 and 1999. We postulate that a key reason for the huge transfer of weapons to the Persian Gulf region is the enormous value of the oil wealth there along with the dependence of Western economies on access to the relatively cheap and steady supply of crude oil. We find a strong, positive, and robust empirical association between arms trade and crude oil trade and explain it as the result of a target price band arrangement that was responsible for the remarkably stable crude oil prices during our study period." ("JEL" F10, F59, Q38) Copyright (c) 2009 Western Economic Association International.

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Section: Analytical Frameworkmentioning

confidence: 99%

Section: Analytical Frameworkmentioning

confidence: 99%

Section: Analytical Frameworkmentioning

confidence: 99%

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Guns and Oil: An Analysis of Conventional Weapons Trade in the Post‐cold War Era

Khanna

Chapman

2010

Economic Inquiry

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“…Anderton (1995), Sandler and Hartley (1995), Levine and Smith (1997a), and Bolks and Stoll (2000) provide surveys and assessments of models of international arms trade. Detailed theoretical models of arms trade can be found, among others, in Levine, Sen, and Smith (1994); Levine and Smith (1995, 1997a, 1997b; Garcia-Alonso (1999; Bolks and Stoll (2000); Blume and Tishler (2001); and Mantin and Tishler (forthcoming).…”

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confidence: 97%

Security Needs, Arms Exports, and the Structure of the Defense Industry

Golde

Tishler

2004

Journal of Conflict Resolution

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A two-stage game theoretic model is developed in which firms in two producer blocs (the United States and Western Europe) produce a homogeneous defense good and sell it to their own governments and to the rest of the world. The security levels of the two producer blocs depend on their purchase of the defense good relative to the amount purchased by the rest of the world. Countries choose their security levels, such that their welfare, which depends on their security level and on government expenditure on other goods and services, is maximized. Results show that net defense costs of the United States and Europe are lower when the number of defense firms is small and that a further increase in world prices will crowd out developing countries from the market for modern weapon systems and may force them to develop and use “cheap and dirty” weapons.

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“…A model focusing specifically on arms-transfer decision making by the superpowers can be found in Sanjian~1988!. Levine and Smith have also developed a series of formal models of the international arms market, and in these, it is the demand for weaponry that comes from pairs of potentially hostile neighbors~seeLevine and Smith, 1997;Levine, Sen, and Smith, 1994; Levine, Mouzakis, and Smith, 2000!.…”

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confidence: 99%

Rivalry, Reaction, and Weapons Proliferation: A Time-Series Analysis of Global Arms Transfers

Kinsella

2002

Int Studies Q

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This article analyzes the competitive dynamics in global arms transfers from 1951 to 1995. I discuss the enduring forces behind the proliferation of military capability during the Cold War and other historical periods, and then consider the competitive dynamics characteristic of the superpower rivalry itself. The process of military‐technological advance, along with the dynamics of enduring interstate rivalry, lead us to expect certain patterns in quantitative data representing arms‐transfer levels over time. Concepts in time‐series analysis—cointegration and error correction—are helpful for understanding competitive arms‐transfer policies during the Cold War, and I apply the relevant analytical tools to test for the hypothesized patterns in the empirical data. American and Russian, as well as NATO and Warsaw Pact, arms transfers are examined at three levels of regional aggregation: the Third World as a whole, the Middle East security complex, and the Persian Gulf subcomplex. The evidence shows that arms transfers by the Cold War rivals moved together in patterns consistent with competitive policy making in an environment of military‐technological change, and that one or both sides adjusted their supply policies to correct for deviations from a moving equilibrium. This describes an action‐reaction process, but a loosely coupled one deriving from military‐technological uncertainties, the complexities of regional security dynamics, and the multidimensional character of the Cold War competition.

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A model of the international arms market∗

Cited by 45 publications

References 5 publications

Guns and Oil: An Analysis of Conventional Weapons Trade in the Post‐cold War Era

Guns and Oil: An Analysis of Conventional Weapons Trade in the Post‐cold War Era

Security Needs, Arms Exports, and the Structure of the Defense Industry

Rivalry, Reaction, and Weapons Proliferation: A Time-Series Analysis of Global Arms Transfers

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