An Economic Interpretation of French Military Expenditures

Abstract

In the post-Cold War context of decreasing military expenditures and arms-market crisis, France has redefined its defence policy, giving up the model of protected arms production and exports while reasserting its military and strategic ambitions. But does the country still have the means of its ambitions? The analysis of statistical data since 1990 may show that the independent policy of security has been clearly replaced by a real dependency on armaments and strategies, in the context of higher budgetary constraints. Military expenditures now seem to be more an economic burden than a driving force. The study of the defence budget compared with the general state budget shows that military expenditures are often used as variables of economic adjustment and that inertia effects are important. Several aspects of the French defence policy are underlined, notably the weakness of French military research and development, the declining share of capital expenditures in the defence budget and the decreasing investment in the nuclear field. In addition, the French arms industry suffers from a too-belated restructuring and from the continuing compartimentalization of European markets.French defence policy, Defence budget, Defence industrial base, Structure of military expenditures,

Accidental rivals? EU fiscal rules, NATO, and transatlantic burden-sharing

“…This research complements previous defense economics and conflict research on burden-sharing to help bridge the quantitative–qualitative gap. While defense economists (Harris, 1986; Coulomb & Fontanel, 2005; Arvanitidis, Kollias & Messis, 2017; Christie, forthcoming) have considered relationships between fiscal constraints and defense spending, none has addressed fiscal rules as such. Defense economics and conflict researchers have not yet used FRI.…”

Military Expenditure and Migration in Europe

“…Coulomb and Fontanel(2005) find that since 1990 French military expenditures are more of an economic burden than a driving force. This may in part be due to their procurement procedure.…”

Defence Acquisition and Procurement

“…Equipment design has often reflected perceived foreign demand rather than French military needs, prompting complaints by the armed services. Coulomb and Fontanel (2005) comment that French arms exports were sometimes promoted without any economic or commercial logic, particularly when firms tried to compensate for domestic budget cuts by increasing exports. France lost $1.2 billion on the $3.4 billion 1993 order for 436 Leclerc tanks for the UAE, mainly from problems with foreign exchange hedging.…”