Offsets as industrial policy: Lessons from aerospace

Since 1975 “offsets” have begun to appear frequently in contracts covering international sales of aircraft and other products incorporating advanced technology. Offsets involve reciprocity beyond that normally found in an exchange of goods for money. They may involve co‐production or co‐design of the principal item to be exchanged, or acceptance by the seller of goods or services unrelated to it as partial payment (indirect offsets or countertrade).

The United States has become the major provider of offsets and anti‐offset sentiment has grown. Economists interpret them as trade diverting. Politicians from regions suffering loss of employment view them as bestowing unfair advantage to foreign competitors.

The authors examine offsets from both theoretical and policy perspectives and conclude that in such noncompetitive markets, second‐best considerations dominate, requiring case‐by‐case evaluation of impacts and rendering across‐the‐board determinations of welfare loss suspect.     

Book reviews

The Political Economy of Defense, Ross A. L. (ed), Greenwood Press, 1991, New York. pp. ix, 229; ISBN 0–313–26462–7, Price $47.95

Economie Politique de la Defense, Jacques Aben, (Paris: Editions Cujas, 1992, 170 pages, 120 French Francs, ISBN: 2–254–92723‐X)     

Less than Meets the Eye

Observers of United States (US) interventions have almost universally characterized the 1994 Haiti intervention as multilateral, a model for how international cooperation can achieve common security goals. A closer analysis of the intervention reveals that the planning and execution of the intervention were almost entirely unilateral and therefore cost the US few if any of the theoretical costs of coalition warfare, including interoperability and policy compromise. Mapped onto the unilateral strategy and operation of the intervention, however, was a multilateral diplomatic effort that secured United Nations Security Council authorization and provided a cover for an intervention that the US had already planned and intended to execute with or without that authorization. That the US sought a multilateral cover for an intervention that it could easily accomplish unilaterally shows the importance of two factors: A domestic audience that opposed unilateral peacekeeping but would accept using US resources as part of a broader multilateral operation, and a local population that would be more responsive to a multilateral coalition than a use of force that was perceived to be unilateral. The Haiti intervention shows that the determinants of success in operations other than war are as much political as military. When the US already has overwhelming military superiority vis-à-vis its adversary, building military coalitions becomes as much about enlisting political support as aggregating material capability.     

The Botswana Defence Force and the War against Poachers in Southern Africa

‘Semper aliquid novi Africa affert’ (out of Africa this is always something new) wrote the Roman scholar Pliny the Elder, and that has been all too true of catastrophe and misery in modern times. Yet despite Africa's problems, the continent also offers many examples of humankind's most commendable achievements. This is one such story. It is the account of the successful struggle by a small but well disciplined and well led African army to protect a vital national resource, a role performed with dedication and consistent success since 1987. The fight against poaching in Botswana is a peculiar form of low-intensity conflict that poses significant political, operational and technical challenges. This article identifies some of those challenges and notes how the Botswana Defence Force overcame them, providing an example that may profitably be emulated elsewhere. The article also calls attention to evolution of military roles and missions in reaction to the novel threats of post the Cold War world.