EXTENDED DETERRENCE IN THE MIDDLE EAST

The article presents and analyzes the US extended deterrence commitments in the Middle East as well as those provided by regional states, and assesses the effectiveness and credibility of these commitments. The article then proceeds to analyze a situation wherein Iran successfully develops nuclear weapons. It considers first the security requirements and alternatives of Gulf Cooperation Council (GCC) states, and then proceeds to assess the stability—or instability—of an Israeli-Iranian nuclear balance. The enhancement of US extended deterrence in the region is required in order to deter Iran, reassure allies, and contribute to the stability of an Israeli-Iranian nuclear balance. The article also discusses several contextual issues, such as: the future form of US extended deterrence; distinguishing between the latter and other US extended deterrence commitments; and the different approaches of specific GCC states and Israel.     

NONPROLIFERATION POLICY CROSSROADS:

On October 1, 2008, Congress enacted a proposal that originated with President George W. Bush in 2005 to approve an unprecedented nuclear trade pact with India by removing a central pillar of US nonproliferation policy. Despite the numerous political challenges confronting the Bush administration, the initiative won strong bipartisan support, including votes from Democratic Senators Joseph Biden, Hillary Clinton, and Barack Obama. The four-year struggle to pass the controversial US-India nuclear trade agreement offers an exceptionally valuable case study. It demonstrates a classic tradeoff between the pursuit of broad multilateral goals such as nuclear nonproliferation and advancement of a specific bilateral relationship. It reveals enduring fault lines in executive branch relations with Congress. It vividly portrays challenges confronting proponents of a strong nonproliferation regime. This article is based on an analysis of the negotiating record and congressional deliberations, including interviews with key participants. It assesses the lessons learned and focuses on three principal questions: how did the agreement seek to advance US national security interests?; what were the essential elements of the prolonged state-of-the-art lobbying campaign to win approval from skeptics in Congress?; and what are the agreement's actual benefits—and costs—to future US nonproliferation efforts?     

The Problem of Weak Nuclear States

Governments are increasingly recognizing the problem posed by internally weak nuclear-capable states. The problem, however, is under-theorized. This article brings together literature on sovereignty and international order, the nonproliferation regime, and weak states, and introduces new concepts to provide a more structured understanding of this problem. Insight comes from focusing attention on the function and governance of two nuclear estates (termed the production and operational estates), and on their resilience to decay and disorder occurring within the state and society. Drawing on empirical observation, the authors suggest a typology of weakness in nuclear states, involving state fragmentation typified by the former Soviet Union, the “hard weak state” typified by North Korea, and the internally conflicted state typified by Pakistan. Although these types give rise to distinctive difficulties, their alleviation depends heavily on the maintenance of internal authority within the state and estates, the presence or absence of cooperative relations, and the international regulatory framework's vitality.     

Icons Off the Mark

In two landmark articles, longtime scholars Kenneth N. Waltz and Thomas C. Schelling have re-emphasized the utility of nuclear deterrence over nuclear nonproliferation (Waltz) and nuclear disarmament (Schelling). While the thrust of the articles is seemingly different, both are rooted in the same intellectual ground: an epistemology that assumes problem-free inferences, drawn from past experiences, are applicable in future scenarios; a foundational rooting in strategic rationality that entangles them in unsolvable contradictions concerning comparable risks of different nuclear constellations, namely deterrence versus proliferation and disarmament; and a bias in framing the empirical record that makes nuclear deterrence more conducive to security than nuclear disarmament. The common normative-practical denominator, then, is to let a nuclear weapon-free world appear both less desirable and less feasible than it might actually be.     

The Importance of Safeguards Culture

International safeguards is the system of measures put in place by the International Atomic Energy Agency and states to ensure nuclear programs remain dedicated to peaceful purposes. This international safeguards system consists of agreements, inspections, and evaluations that have never considered the safeguards culture of a state or facility. Neither a common definition nor an understanding of safeguards culture is internationally recognized. This article provides an analysis of the concept of safeguards culture and gauges its value to the international safeguards community. The authors explore distinctions among safeguards culture, safeguards compliance, and safeguards performance, and suggest possible indicators of safeguards culture and methods to promote a strong, positive safeguards culture.     

Deterrence in the Gulf War

A recently published collection of captured Iraqi records offers an opportunity to better understand Saddam Hussein's perception of US and Israeli deterrence signals, affording innovative insights into the reasons behind Iraq's restraint from using weapons of mass destruction against Israeli targets during the 1991 Gulf War. This article tests a wide range of suggested hypotheses, and suggests that US and Israeli deterrence played only a minimal role in dissuading Iraqi use of WMD. The article concludes with some thoughts on the practical implications, particularly on the effectiveness of a “no-first-use” nuclear policy.     

The structure of the defense industry and the security needs of the country: a differentiated products model

This paper models the interactions between the defense needs of the USA and Western Europe, which produce several heterogeneous defense goods, and the defense industry market structure. The results show that net defense costs of the USA and Europe are lower when the number of defense firms in each arms‐producing country is small and when the world prices of the defense goods are high. The model predicts that the increase in world prices will crowd‐out countries in the developing world from the market for modern weapon systems and may force them to develop and use ‘cheap and dirty’ weapon systems.     

Does Geopolitical Risks Predict Stock Returns and Volatility of Leading Defense Companies? Evidence from a Nonparametric Approach

Abstract

We use the k-th-order nonparametric causality test at monthly frequency over the period of 1985:1 to 2016:06 to analyze whether geopolitical risks can predict movements in stock returns and volatility of 24 global defense firms. The nonparametric approach controls for the existing misspecification of a linear framework of causality, and hence, the mild evidence of causality obtained under the standard Granger tests cannot be relied upon. When we apply the nonparametric test, we find that there is no evidence of predictability of stock returns of these defense companies emanating from the geopolitical risk measure. However, the geopolitical risk index does predict realized volatility in 50% of the companies. Our results indicate that while global geopolitical events over a period of time is less likely to predict returns, such global risks are more inclined in affecting future risk profile of defense firms.     

ESCAPE FROM NUCLEAR DETERRENCE

Since the post-World War II genesis of nuclear deterrence, two presidential initiatives have been presented to deliver humanity from the threat of its failure. The first was the Strategic Defense Initiative (SDI), a constellation of space- and ground-based systems that President Ronald Reagan envisioned would render nuclear weapons “impotent and obsolete.” The second is President Barack Obama's roadmap to “a world without nuclear weapons,” commonly referred to as “Global Zero.” While these proposals appear to have little in common, deeper investigation reveals a number of provocative similarities in motivation and presentation. Moreover, both generated fierce debate, often with ideological overtones, about their strategic desirability and technical feasibility. We use these parallels, as well as prominent dissimilarities, to draw lessons from the SDI experience that can be applied to the debate over Global Zero.     

DIVERGING NUCLEAR PATHWAYS IN SOUTH ASIA

Eating Grass: The Making of the Pakistani Bomb, by Feroz Hassan Khan. Stanford University Press, 2012. 544 pages, $29.95.

Managing India's Nuclear Forces, by Verghese Koithara. Brookings Institution Press, 2012. 304 pages, $59.95.