President Obama and the UK Labour and Coalition governments have all backed the renewed momentum for serious progress towards a world free of nuclear weapons, whilst the UK finds itself embarked on a controversial and expensive programme to renew its Trident nuclear weapons system. What does the UK process tell about the prospects for disarmament?

Proponents of arms control and disarmament are often confronted with the argument that reductions in defense expenditure lead to cutbacks in military industries and thus to economic hardship. While a reduction in defense production would cause some economic dislocation, this would be mitigated by the ability of the economy to adapt to changing patterns of production. This book, first published in 1983, assesses the likely effects of reductions in defense industries by an examination of the roles these industries play in national economies. Each chapter discusses industry employment, output, research and development, capital value, profitability, concentration and competition, internal organization and regional employment concentration. Other questions considered include the economic importance of weapons exports, the defense industry as a ‘leading edge’ in maintaining national technological capabilities, and the reliance of individual firms on defense contracting.

For the first time since the design of the first nuclear submarine, the U.S. Navy has no nuclear submarine design program under way, which raises the possibility that design capability could be lost. Such a loss could result in higher costs and delays when the next submarine design is undertaken, as well as risks to system performance and safety. The authors estimate and compare the costs and delays of letting design capability erode vs. those of alternative means of managing the workload and workforce over the gap in design demand and beyond. The authors recommend that the Navy consider stret.

The Ministry of Defence (the Department) continues to struggle with managing its equipment programme on an affordable basis, resulting in the cancellation or deferral of major projects and a damaging impact on value for money. In 2010-11 the forecast costs to complete the 15 largest defence projects increased by £466 million. Since their original approvals the estimated costs of these 15 projects have increased by £6.1 billion and now stand at approximately £60 billion (an 11.4% increase). In aggregate these 15 projects are forecast to be completed 322 months later than originally planned. Projects approved since 2002 show significantly lower cost growth than those approved before this date, which is encouraging. Now the Department faces unpalatable decisions. Decisions to cancel or slow projects and to reduce equipment numbers have added significant long-term costs to the whole defence programme and to unit costs within the programme. Capability has been affected and this has all resulted in poor value for money. Large defence equipment projects have contributed disproportionately to overall cost growth. In the past, the Department has repeatedly failed to challenge unrealistically low estimates for the largest and most complex equipment projects from suppliers. The Department is still unable to set out openly the extent of the gap between income and expenditure it still faces, and how and by when any shortfall will be resolved. The report notes little progress in reducing the turnover of the Senior Responsible Owners (SROs), who oversee individual projects.

Defence policy is of continuing interest and concern to all nations. There are armed conflicts and new threats. Difficult choices cannot be avoided. This book has three aims. First, to identify the typical questions raised by economists when studying defence policy. Second, to show how simple economic analysis can be used to answer these questions and contribute to our understanding of defence issues. Third, to provide a critical evaluation of defence policy.