Sources of inefficiency in the procurement of major weapon systems. Estimates for the German case

Michael Brzoska

Economics of Peace and Security Journal, 2024, vol. 19, issue 1, 5-22

Abstract: The objective of this article is to provide a rough estimate of inefficiencies in German major weapons procurement. It is possible to derive estimates of procurement inefficiencies for 2022 programs—arising from a failure to exploit economies of scale, the complexity of co-production projects, cost overruns and time delays, and low weapon utilization rates. As the necessary data is only partly available to the public, these estimates rely on several assumptions and so are presented as ranges. This article identifies two main causes of symptoms of inefficiency in German major weapons procurement: (a) technological requirements beyond the reach of arms producers at the time decisions on procurements were made, and (b) protectionism, i.e. the favoring of national arms producers. Overall, it is estimated that German taxpayers could have been spared a least a third of total procurement costs had these inefficiencies been avoided.

Keywords: arms; procurement; efficiency; Germany (search for similar items in EconPapers)
JEL-codes: H56 H57 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:epc:journl:v:19:y:2024:i:1:p:5-22

DOI: 10.15355/epsj.19.1.5

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