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Weapons programs are criticized for cost overruns, delays in delivery and failure to meet their operational requirements. Critics focus on the power and influence of the military- industrial-political complex. This chapter addresses these controversial areas involving arms industries, alternative procurement policies and industrial policy. Arms industries are defined and statistics are presented on the world's arms industries. They can be analyzed as economically strategic industries where both R&D and production quantities are important and lead to decreasing cost industries reflecting economies of scale and learning. A structure-conduct-performance approach is applied. Market conduct is assessed including defense R&D and the role of the military-industrial-political complex. Market performance is reviewed by assessing contract performance, firm productivity and profitability and exports. Governments are central to understanding arms markets and weapons procurement raises both theory and policy issues. There are principalagent problems and issues of adverse selection, moral hazard, risk sharing and bilateral monopoly. Various types of contract are available, each with different efficiency incentives. Governments can also use their buying power to determine the size, structure and performance of a nation's defense industrial base (DIB). The benefits and costs of a national DIB are assessed and three policy issues and challenges are reviewed. These are the role of competition in arms procurement, its extension to military outsourcing and the profitability of non-competitive contracts. Alternative industrial policies are a further aspect of procurement policy. Guidelines for a defense industrial policy in a military alliance are outlined together with an assessment of European collaborative programs. The Chapter concludes by speculating on the future of the defense firm and proposing an agenda for future research in the field. [ABSTRACT FROM AUTHOR]

The extent to which the civilian administrators of the War Ministry had achieved a firm grip over the armies and generals under Louis XIV has been one of the obsessions of nineteenth- and twentieth-century historiography on the early modern French armies. Yet no serious attempt has been made for nearly a century to draw together the various branches of the département de la guerre, while the period after 1691 remains almost completely unexplored. The result is that old statist interpretations still hold much sway in our understanding of the development of the army. In his book on the intendants d'armée between 1630 and 1670 Douglas Clark Baxter saw an inexorable march of ‘progress’ by which the intendants, with the approval and prodding of the Secretary of War, gained civilian control over the armies, commenting: ‘the process had not ended by 1670, yet the trend was apparent’. His subsequent work has by and large reinforced this message. Louis André thought the civilian administrators were ‘prépondérantes’ by 1672. It is true to say that intendants and commissaires des guerres played important roles in the army reforms of the years 1654–1701, but the claims of Baxter, Bonney and André are exaggerated, as both Baxter and André Corvisier have since acknowledged. Though they have provided little supporting evidence, both these historians now accept that these functionaries were reduced in importance as military officers came to play a greater role in the policing of the armed forces. [ABSTRACT FROM AUTHOR]