Home Defence and the Sandys Defence White Paper, 1957

Long understood as the key document in Britain's Cold War history, the Duncan Sandys Defence White Paper of 1957 nevertheless has a largely forgotten context: home defence. This article argues that understanding this context allows important new conclusions to be drawn concerning the drafting, presentation and the reception of the document and the deterrent strategy it expounded. It argues that the Paper failed to establish a new doctrine for civil defence which reconciled the policy with the wider deterrent strategy. In doing this, the Paper presented a muddled policy to the public: one which failed to justify the reductions in civil defence provision but which stressed the destructive power of thermonuclear weapons. This had the effect of encouraging the critics of the government's nuclear strategy to flag up the absence of adequate civil defence measures and highlight the ‘admission’ that there was no defence against the hydrogen bomb.     

South African defence policy: the rationale and impact of the SANDF’s primary role and conventional force design

The 2015 South African Defence Review set out to reverse the deterioration of South African National Defence Force (SANDF) capabilities. Within the South African Department of Defence (DOD) this deterioration is expressed mainly in terms of a decreasing defence budget, subsequent declining conventional capabilities and obsolete prime mission equipment. Contemporary research and defence expert debates on this theme, point out the disjuncture between policy ends and the available means, with scepticism for an increased defence budget given the DOD’s lack of internal reform and strategy adjustment. One question that remains largely unanswered in the literature regarding the decline of the SANDF, is why both the policy-makers and the SANDF have remained focused on the primary role of the military (defending territorial integrity) accompanied with an unaffordable conventional force design? This question relates to the aim of this paper and is explored by revisiting initial defence policy decisions and compromises that were made in the 1990s. It is argued that the primary role of the SANDF and its conventional force design suited the interests of both the politicians and the military, but that the drawbacks thereof have harshly caught up with the DOD.     

Rent seeking and defence expenditure

A plethora of arguments from the ‘public choice school’ suggest that public goods are ‘under‐supplied’ by comparison with public sector provision of more private goods. The implication is that rent seeking by the ‘military‐industrial complex’ serves, in some measure, to offset potential allocative inefficiency. In this paper a comparison of rent seeking by producers of public goods and producers of private goods identifies a bias that favours public good supply. The bias results from the different way in which collective demand for public goods and for private goods is expressed. The prospect of larger rents to the ‘military‐industrial complex’ implies greater rent‐seeking expenditures in this sector. The extent to which public goods (and, in particular, defence) are ‘under supplied’ is much exaggerated.     

Securitising humanitarian assistance and post-conflict reconstruction in Africa: A critical review of South Africa's new defence policy

The South African Defence Review 2014 is the country's new defence policy. The Review, which is expected to steer South African defence policymaking for the next few decades, discusses in detail the role of the South African National Defence Force (SANDF) in peace missions in Africa and proposes the direct involvement of the country's soldiers in both military and civilian tasks, from peacekeeping to humanitarian assistance, post-conflict reconstruction and development. This paper contains a critical review of the Review with regard to South Africa's envisaged contribution to regional and continental peace and stability. It is argued that humanitarian assistance and post-conflict reconstruction should not be securitised and that the SANDF should only be tasked with peacekeeping and the establishment of stability and security in fragile in-conflict and post-conflict settings. The humanitarian work should be left to humanitarian and aid agencies, while reconstruction and development should be left to organisations such as the New Partnership for Africa's Development, continental and international development organisations, and local actors.     

India–Africa defence cooperation against the backdrop of the ‘Make in India’ initiative

Although India is a major importer of defence equipment, it has also been manufacturing defence equipment for some of its needs. The Government of India’s ambitious ‘Make in India’ initiative for the defence sector aims to achieve self reliance in defence equipment production. This essay explores the opportunities for bilateral arms trade between India and Africa, as a new facet of India-Africa defence cooperation. It covers India’s arms export policy, policy reforms in India’s defence sector, and the opportunities for Indian and African defence markets.     

Addressing the “headwinds” faced by the European arms industry

ABSTRACT

The European arms industry is challenged by several adverse “headwinds.” Fragmentation leads to costly duplications and, in conjunction with stagnating budgets and sharply increasing costs, prevents firms from exploiting economies of scale and learning. This is exacerbated by size differentials vis-a-vis the leading US arms manufacturers and competition from emerging producers. As some “headwinds” are self-enforcing, far-reaching industrial and policy responses are required to improve the industry's outlook. As exports may not indefinitely compensate for low domestic demand, there is an economic imperative for further cross-border collaboration and consolidation. Despite various EU policy initiatives, progresses regarding the European Defence Equipment Market and strengthening the European Defence Technological Industrial Base have been relatively slow. It remains to be seen whether the European Defence Fund will be the proclaimed “game-changer,” raising competitiveness of the European arms industry. At the same time, the UK's withdrawal from the EU adds uncertainties.     

EFFECTS OF MILITARY SPENDING ON THE PROFITABILITY OF SPANISH DEFENCE CONTRACTORS

The traditional view of the defence industry obtaining large profits from contracts with the Ministry of Defence relies on several assumptions. Among these are the use of such arrangements as an instrument of industrial policy, the strong market power enjoyed by prime contractors, and the inefficiency encouraged by the sector. The findings show that defence contracts have a positive effect on profits, as well as the prizes for innovation and the market power enjoyed by some defence subsectors.     

BENCHMARKS AND INDICATORS TOR CORPORATE GOVERNANCE

In addition to the South African King Report, there has been a rapid growth in the development of African thinking on corporate governance. In a period in which the private sector is accepted as the motor for growth, good corporate governance is an essential lever for development and social justice. As the New Partnership for Africa's Development (NEPAD) recognises, the link with economic and political governance criteria is critical. New thinking is to attack on the supply side of corruption (company bribes) by complementary anti-corruption measures by the state. The recent initiative of the African Union (AU) to develop an AU Convention on Combating Corruption addresses the importance of declaring public officials' assets, and also breaks ground by targeting unfair and unethical practices in the private sector.     

On the nature and scope of defence economics

Defence economics uses the tools of economics to study the defence sector and its domestic and international implications. Simple models require careful application in defence economics, since indirect effects may have counterintuitive impacts. For example, while certain arms races can lead to the outbreak of war, others may have the counterintuitive effect of discouraging the outbreak of war owing to mutual deterrence.

The world is now multipolar rather than bipolar, analogous to an oligopoly situation. This multipolar world can be analyzed by a qualitative characteristic function, where the formation of a potential coalition allows study of the shift from conflict to cooperation in international relations. Some new issues to be considered in this framework include accidental nuclear war, potential arms races and conflicts in the third world, and the proliferation of chemical weapons and missiles.     

The practice of strategy: South African defence in stasis

The article concerns the strategy development processes of the South African Department of Defence in South Africa. It intends to identify the probable causes of the observed failure of the South African National Defence Force to develop appropriate departmental policy and military strategy. Military strategy comprises force development, force employment, force deployment and the coordination of these elements in pursuit of national, grand-strategic objectives. (See Dennis M. Drew and Donald M. Snow, Making Twenty-first Century Strategy: An Introduction to Modern National Security Processes and Problems Montgomery, AL: Air University Press, Maxwell Air Force Base, November 2006, 103). Of these four constructs, the article concerns itself only with the first two. The article analyses two complementary approaches to strategy formation: a resource-driven, inside-out model and an interests-driven, outside-in method. The article concludes that the Department is preoccupied with the inside-out method to the lasting detriment of the declared strategic intent of the defence policy.     

The right place at the right time,or the right person in the right place?

South Africa's military has, since the First World War, been an oft-used and effective tool in the conduct of South African foreign policy, but this role has not always translated into power for Defence Department principals in its formulation. South African Defence Ministers for most of the country's history have played a minor role in the making of foreign policy; despite a change in this dynamic between approximately 1975–1990, the post-apartheid era has once again seen a diminishment of Defence's power in this arena. This article examines why Defence Ministers have generally been such weak players, with an eye toward disaggregating whether this was a product of interpersonal relationships with Cabinet and – most importantly – the Head of State, or whether this influence (or lack thereof) was more a function of South Africa's international standing. While determining who has influence on this process is difficult given the primacy of the national leader in making foreign policy and a lack of insider accounts by participants in the process, this article relies upon several interviews with participants and knowledgeable observers that help illuminate the process and Defence's role in it.     

The Czech defence and security industry: taking the pulse to an ailing man

ABSTRACT

The paper summarises the evolution of the iron triangle of the mutual relationships amongst the ministry of defence, defence industry, and the political elite in the post-communist Czech Republic in 1990-2020. The essay stresses the oddness of this relationship. On the one hand, the government is bound by a partnership to the Defence and Security Industry Association of the Czech Republic (DSIA), a lobbying group of more than 100 organisations that conduct business in defence and security sector in Czechia. Yet, since its creation in 2000, this assemblage of industries within DSIA's market position is falling, in fact. Neither political parties in power, nor the governments have been able to support national defence industry through the small military. Just a few DSIA national members are able to compete internationally with their cutting-edge products. Others have evolved into middlemen trading intime-expired Czechoslovak equipment retired from the Czech Armed Forces.     

Defence research and development: Encouraging private venture R&D with ‘option’ strategies*

Central to the changes in UK Ministry of Defence procurement policies over recent years has been the attempt to shift risk out of the public sector. In the context of research and development this has taken the form of encouraging private venture investment, so‐called PVR&D. Recognising that the scope for PVR&D is necessarily constrained by excessive risk and imperfect information, this paper explores the possible use of Option contracts as a means of expanding the opportunities for private venture funding.     

Defence Procurement Policy: The Way Ahead

Abstract

The Defence Procurement Executive is the single largest customer of British industry and controls some 127 000 contracts. As Chief of Defence Procurement, Dr McIntosh explains the effects of expanding market forces on defence contracts and the suppliers, before continuing to outline the prospects for future competitive contracts in view of the recent cuts in defence budgets.     

EUROPEAN DEFENCE FIRMS: THE INFORMATION BARRIER ON PRIVATE FINANCE*

After the fall of the Berlin Wall, European governments adopted a hands‐off policy towards the defence industrial base, in an attempt to increase the sector’s efficiency and reactivity. In this context, one topical issue is how to motivate defence firms to apply for private rather than public finance. Since banks have no prior experience with European defence firms, a problem of asymmetric information may block this transition. The problem is analysed within the framework of a game between defence firms and banks. It is shown that the Bayesian Equilibrium might correspond to a situation where low‐risk firms prefer the state‐financed scheme; yet, in a perfect information set‐up, the same firms would apply for bank credit. In order to facilitate the transition to private finance, the government might decide to subsidize investors who agree on financing defence firms; the state aid should be made available during a transitory learning period.     

The German arms industry in a European context: A study in successful downsizing

Defence offsets rank as one of the most important and controversial topics within the broad field of defence economics. Arms vendors are likely to view offsetting investment as a distraction, fearful of its potential to hurt the bottom line. By contrast, policymakers in the arms purchasing countries see offsets as an opportunity to extract technology transfer, as well as employment, investment and export sales opportunities. Establishing the actual impact of offsets, however, is not easy. The subject is shrouded in secrecy and myth, with anecdote and generalisation pervading even the intellectual press. This paper seeks to break the mould by offering an empirical case study of the role of offsets in Malaysian defence industrialisation.     

Corporate performance and military production in South Africa

With the end of the Cold War and apartheid, a process of demilitarisation and dramatic cuts in military spending has marked the transition to democracy in South Africa. Between 1989 and 1997 the South African defence budget was cut by more than 50% in real terms, with most of the cuts coming from the procurement budget, which was cut by nearly 70% in real terms during the same period. These cuts have had a significant impact on the country's defence industrial base. However, there has been surprisingly little research on the changes to defence companies that have taken place since the late 1980s. This paper makes a start at rectifying that deficiency by providing an analysis of the restructuring of the major defence‐dependent companies over the period 1988–97. It uses a number of financial ratios and other measures of corporate performance to compare their experience with non‐defence companies in the rest of the South African economy during the same period.     

Feeding the Lion: China and defence development in African states

ABSTRACT

In analysing trends in Chinese defence engagement and their impact on defence development in African states, it is important to consider both China's changing policy priorities and its capabilities for the provision of defence support. China's international ambitions and its economic development contribute to its emergence as a key supporter of defence capability development in Africa, occupying a crucial niche as a provider of support, particularly arms transfers, appropriate to evolving local requirements. The economic and politico-military imperatives driving China's engagement of Africa, which stem from its economic reforms and re-emergence as a great power, are facilitating defence modernisation by accelerating the introduction of modern arms in substantial quantities. The commercial importance of arms exports and the growing importance of strategic ties strongly situate China to help sustain processes of defence capability development in African states over the long term.     

DETERMINING THE DEFENCE INDUSTRIAL BASE

This paper models the determination of the defence industrial base – the number of different military systems a country decides to maintain. High R&D costs means that few countries can afford to produce major weapons systems and the producers also import systems. Non‐producers rely on imports and we assume their demand is driven by regional arms races. Military capability is determined by the number of systems and the quantity and quality of each. We examine how the defence industrial base is influenced by military expenditures, R&D costs, export controls, the nature of regional arms races and a variety of other factors.     

Chains,networks and shifting paradigms: the UK defence industry supply system

Industrial supply chains have emerged as the focus of much economic and business research over the previous decade and defence is no exception. This paper reviews contributions made to the body of knowledge in this field with particular attention given to primary research undertaken on the UK defence industrial supply system. In doing so, the author assesses the quantity and quality of knowledge available to researchers, analysts and policy makers. There have been a number of valuable contributions to the literature and this paper reveals a subject that is extremely complicated, dynamic and yet under‐researched. It is suggested that it may well be this complexity and dynamism, coupled with difficulty in accessing data, that has inhibited research development in this field. Defence industry supply systems are repeatedly referred to as ‘chains’; however, primary research consistently suggests this is a misnomer – the author concludes that future analysis of the UK defence sector must embrace directly the economics of networks if understanding of the same is to progress and industrial ‘invisibility’ is to be avoided.