Arms Export Controls, Subsidies and the WTO Exemption

Garcia-Alonso, Maria D C and Levine, Paul (2005) Arms Export Controls, Subsidies and the WTO Exemption. Scottish Journal of Political Economy, 52 (2). pp. 305-322. ISSN 0036-9292. (The full text of this publication is not available from this repository)

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Abstract

Owing to the World Trade Organization (WTO) exemption that allows governments to subsidize arms exports, the arms trade is one of the few remaining areas of trade where we observe export subsidies. This paper examines the effect of arms controls, in the form of licensing delays, on the incentives to subsidize arms exports and conversely the effect of the WTO arms trade exemption on the incentives to break arms control agreements. Our main result is that arms controls and free trade commitments re-enforce each other. Licensing delays reduce the incentive to subsidise and free trade without subsidies reduces the benefits of a unilateral abrogation of arms controls. Transparency actually worsens the Nash inefficiencies at play in that incomplete information leads to lower subsidies and lower arms exports.

Item Type: Article
Subjects: H Social Sciences
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: C. Hudson
Date Deposited: 19 Dec 2007 18:24
Last Modified: 20 May 2014 13:46
Resource URI: http://kar.kent.ac.uk/id/eprint/650 (The current URI for this page, for reference purposes)
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