The evolution of concentration in the arms market

John Dunne and Ronald Smith

Economics of Peace and Security Journal, 2016, vol. 11, issue 1, 12-17

Abstract: This article examines the evolution of concentration in the global arms market, or industry, over the period 1990-2013 and considers its prospects. Using data from the Stockholm International Peace Research Institute (SIPRI) list of the largest 100 arms producing firms, it finds that within the international arms industry, there has been change but also continuity, particularly in the nature of the markets and the relations between the main producers and governments. While the changes that have taken place are important, it is still political rather than economic logic that shapes the evolution of the market. Certainly the arms industry remains relatively unconcentrated compared to other industries probably because of the domestic preferences in procurement by national governments. Countries do not like monopoly arms producers, but there is no western country other than the United States that can currently support more than one competitor, although in the near future Russia could and China may provide serious international competition to the U.S. What is clear is that there are economic forces pushing for increased competition, but the final outcome will be determined by political forces, and transparency and governance will become increasingly important issues.

Keywords: Arms market; firm concentration; defense industry (search for similar items in EconPapers)
JEL-codes: D74 H56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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