National Security or Private Profits? Trade in Dual-Use Commodities

Denise Eby Konan () and Natalia Tamirisa ()

No 199605, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: This paper develops a simple model of imperfectly competitive trade in commodities with both military and civilian applications, a.k.a. dual-use commodities. We consider the role of export barriers and foreign economic aid in encouraging peaceful rather than military application of dual-use commodities in importing countries. When governments conjecture the profit-shifting effect of their policies, Nash equilibrium policies combine export barriers and foreign aid.

Keywords: dual-use commodities; national security; defense economics (search for similar items in EconPapers)
JEL-codes: F1 F2 O3 L2 (search for similar items in EconPapers)
Date: 1996

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