There is a growing body of literature on the determinants of military spending, mostly either starting from the premise of a dyadic arms race, or a welfare maximisation model incorporating economic, political and strategic variables. This thesis takes the latter approach, to analyse a large sample of developing countries for the period 1981-1997. Two cross-section regressions are estimated, one for the Cold War period, one for the post-Cold War, and a panel data model for the whole period. The results of this analysis suggest that military expenditure is roughly proportional to GNP, depends positively on war and the hostile neighbours' milex, and negatively on population and democracy. There is little evidence that the coefficients differ between the two cross-section regressions, but there is strong evidence of a structural break at the end of the Cold War in the panel data results. There is also evidence of regional differences in the results, which suggests that there may be different regional dynamics in the demand for military spending. To investigate further, the South American continent was chosen, and case studies conducted for Argentina, Brazil and Chile for the period 1970-2000. The main strategic influences on milex are hypothesised to be tension between Argentina and Chile and between Peru, Bolivia and Chile, the Falklands war, and Brazil's ambitions as a great power, while national income, debt and inflation are potential economic influences. Another concern is the differing circumstances of democratic transition in the three countries, especially the level of continuing military influence. This is also hypothesised to affect whether the transition led to reduced military spending. To test these hypotheses, ARDL regressions are run for each country. Argentine milex depends positively on GDP, Chilean milex, and post-Falklands rearmament, and negatively on debt and increasing inflation. Brazilian and Chilean milex seem to be independent of GDP, following an upward trend, but both are negatively affected by debt and inflation. There are no significant external influences on Brazilian milex, but some evidence that tension with Argentina affected Chilean milex. Democracy had no effect in Brazil, a clear negative effect in Chile, and a negative effect in Argentina, but only during the Menem administration. Taken overall, the results of the thesis produce a strong and consistent picture that relates the demand for military spending to overall economic resources and to the level of external and internal threat; however, in countries such as Brazil and Chile with strong continuing military influence, an 'institutionalist' understanding may also be needed, with the military seen as a rent-seeking institution.

This thesis examines the connection between technological change and military privatisation, which includes the privatisation of military assets, as well as the outsourcing of services from the armed forces to the private sector. The main argument is that increasing technological complexity of military equipment in the information age has led to an increasing reliance of the armed forces on private companies in respect to maintaining, managing, and even operating military equipment and networks. The armed forces lack already the competence and the resources for carrying out many important tasks including research, training, and operational support services.

Obtaining value for money is a keystone of UK Ministry of Defence (MoD) acquisition strategy embedded in its Smart Acquisition policy. This thesis examines how best to measure the relative value of competing tender submissions for major projects. There is a comprehensive discussion of a wide range of relevant definitions and over three dozen documents are scrutinised including just some sixteen published by the Government. Commercially available models, algorithms and software are examined as well as those used by MoD. concluding that the programs used by MoD are state of the art but that their use could advantageously be mandated for all large programmes. The programs could also be used to combine the wider factors found in each Business Case. This change, used in conjunction with the Combined Operational Effectiveness and Investment Appraisal should improve Investment Approval Board decision quality An MSc dissertation, supervised as part of mis research, looks at how Integrated Project Teams perceive value. An overview of MoD procurement procedures over the last half-century is followed by an appraisal of how MoD measures value for money under the Smart Acquisition regime. Several recommendations are made outlining how MoD might achieve better, or perhaps more appropriate, value for money when comparing the value of competing bids to select the best one for acquisition. These include avoiding political over-ride of MoD acquisition decisions, firming up aspects of MoD industrial policy, restructuring the Acquisition Management System, stopping acquiring the lowest-cost fully-compliant bid and rejecting offers that exceed the requirement or are unanticipated alternatives. Risk should be considered as a value factor, or the financial cost of various risks calculated. Finally, the phrase "at lower risk' could beneficially be added to existing aims of Smart Acquisition.

This study identifies the influence of national and military organisational values on the cultures of the armed forces of Australia, Britain and Canada, in order to assess the impact of culture on Joint, Combined and Multinational operations. This is achieved by: · Defining culture, values and related concepts. · Outlining a viable methodology to examine and profile cultural values. · Demonstrating why values form the basis of this study. · Reviewing the body of cross-cultural academic literature on cultural values and the military. · Executing a measurement of values in a consistent and academically sound manner. · Examining national influences on the culture of the armed forces of Australia, Britain and Canada. · Examining intra- national organisational influences on the culture of the services of the armed forces of Australia, Britain and Canada. · Examining international organisational influences on the culture of the services of the armed forces of Australia, Britain and Canada. · Focusing on the values of the armed forces examined in this study in order to compare the findings with the results obtained from the Values Survey Module. · Discussing the implications of the findings of this study and demonstrate how the values of the nations and organisations that have been examined can be expected to affect future operations.

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Offset is compensation given to a buyer country for an arms sale. Initially perceived as ‘necessary evil’ in an imperfect defence market, it now serves dual purposes: a marketing strategy for defence industry and a procurement policy for buyer country to generate add on benefits from arms import. Offsets proliferate, and so are stricter mandatory government policies. Still evaluation of offset has been difficult, mostly done in a country-based setting using anecdotal evidence that result in mixed findings. Following the issuance of mandatory offset policy in Indonesia through Law on Defence Industry in 2012, evaluation of past and current offset practice have become not only relevant but also critical to provide policy feedback. This dissertation provides an empirical examination on how offset has been understood and practised in Indonesia, and its contribution to defence industrialisation. The timeframe chosen is 1988-2014, when countertrade has been used to support the lifecycle of strategic industries: development (1988-1998), survival (1999-2009), and revitalisation (2010-2014). This study derives its validity and reliability from triangulation, comprising secondary data, survey, and case study. Three variables are analysed: technology development through ‘strategic industries’, defence offset, and defence industrialisation. Technology development focuses on how technology policy centred on a strategic industries paradigm and ladder of production to initiate industrialisation push. Defence offset discusses the conceptual and practical aspects of offset in Indonesia, including strategic objectives, regulation and institution frameworksin the defence procurement context, and offset life cycle and financing. Defence industrialisation discusses the impact of offset through employment, skill enhancement, transfer of technology, export promotion, domestic supply chain creation, and R&D. Field works were conducted in three firms representing different industrial sectors: PT DI (aerospace), PT Pal (shipbuilding), and PT Pindad (landsystem). Research findings indicate that, first, offset practice has mostly taken place on an ad hoc basis, with no clear reference to strategic objectives, as well as long-term management and financing- that mirror deficiencies in defence procurement. Second, as result of the deficiencies, offset results have been varied from one firm to another, across the different industrial sectors of aerospace, maritime, as well as ammunition and land system. While offset has a positive impact on skill enhancement and technology transfer, it seldom translates into new employment, supply chain creation, export, or R&D. This study generates the following recommendations. First, Indonesia needs to strengthen the management of offset through pre-offset planning and preparing practical guidelines for offset stakeholders in parallel with human resources to support the programme. This means identification of offset potential in procurement (convergence of long term technology policy and long term defence procurement plan), estimation of offset premium cost, allowing participation of industry in the early stage of the offset cycle, as well as devising methods of evaluating offset. Second, Indonesia needs to formulate strategic objectives for offset that relate closely to the dual purposes of defence modernisation and industry revitalisation. Third, Indonesia must strengthen the technology absorptive capability in industry in order to sustain the benefit of offset.

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This thesis critically analyses the procurement rules of international organisations or agencies performing collaborative defence procurement in the European Union (EU). In collaborative defence procurement, States agree to procure equipment or services for their armed forces in common, thereby sharing development costs and looking for economies of scale. The management of collaborative defence procurement programmes is often entrusted to an international organisation or agency acting on behalf of the participating States. After setting out the political, economic and legal context of collaborative defence procurement in the EU, we analyse the applicability of domestic and EU law to international organisations, in particular public procurement law in the field of defence. The conclusion of this first part is that, whilst domestic and EU law apply in general terms to international organisations or agencies, this is subject to the substantive provisions of the relevant laws and to international law, such as the privileges and immunities of the organisations. Specifically, international organisations or agencies in the EU most likely would not have to comply with domestic procurement law or with the EU public procurement directives, but they would still have to comply with the procurement principles flowing from the EU Treaties, except if non-EU Member States control their decision-making. We then move on to an analysis of the procurement rules of three international organisations or agencies performing collaborative defence procurement in the EU: the Joint Organisation for Armaments Cooperation (OCCAR), the NATO Maintenance and Supply Organisation (NAMSO) and the European Defence Agency (EDA). For these organisations we analyse to what extent their procurement rules should comply with EU law, to what extent they are an efficient set of rules, and what measures could be taken to remedy any detrimental issue or incoherence identified. We conclude with recommendations aiming to improve the applicable law.

Public sectors in the developed and emerging economies have been witnessing a period of intense change over the past three decades as a result of the development of free-market economy across the globe. In the UK, the public sector in 1970s (that comprised of nationalised industries) was severely criticised for being wasteful, and subject to political intervention, thereby making them inefficient systems for delivering public services. To put matters right, successive governments from the late 1970s embarked on public sector reforms. These reforms centred on increasing the role of private sector in delivering public services. Privatisation, the implementation of accruals-based accounting and application of compulsory competitive tendering in the public sector were some of these reforms. Public-private partnerships, including private finance initiatives (PFIs), introduced in the 1990s, were a continuation of these reforms. In the defence sector, various reforms carried out prior to 1990s failed to completely remove cost and time overruns in defence projects. PFIs were introduced to further rectify the failures of previous reforms in the defence sector because they were purported to provide better value for money. Defence PFIs are long-term agreements whereby the Ministry of Defence, MoD, contracts to purchase quality services on a long-term basis from the private sector (through the special purpose vehicle, SPV) in which the private sector provides all the finance required in constructing the asset that is used to provide the services. Value for money of PFIs is about economy, efficiency and effectiveness. The question, though is whether, Defence PFIs provide value for money as claimed by the MoD? The purpose of this thesis is to evaluate the effectiveness of three categories: 1) accommodation, 2) equipment and 3) training of Defence PFIs by assessing the financial robustness (over a six-year period) of the SPVs engaged in their delivery. This research employs a multi-method methodological approach to gather data. Qualitative research methods were employed in exploring and understanding customer-supplier relationships and included, PPPs, PFIs in general (and Defence PFIs in particular), the public sector reforms that brought about private sector integration, 4 defence reforms, and Defence PFI policies. Quantitative research was used to collect and evaluate financial data on SPVs (used in Defence PFIs). Research analysis provided mixed results regarding the financial robustness of SPVs employed in the delivery of Defence PFIs. The profit margins of SPVs involved in the delivery of Defence PFIs relating to the category of accommodation were the highest. This is followed by SPVs in the category of Defence equipment and then by SPVs in the category of Defence training. Interestingly, the majority of SPVs involved in the delivery of Defence PFIs relating to accommodation have sound financial health. On the other hand, most SPVs relating to the other two categories have serious financial problems and therefore show cause for concern. Based on research findings of this study, a number of important policy recommendations are advanced to raise the effectiveness of PFIs in the defence sector and the wider public sector.