Arms Export Controls and Proliferation

Abstract

Given that there are a relatively small number of suppliers of major weapons systems, control fo arms exports is possible, and there are a variety of regulatory regimes striving to achieve this. Controls can stabilize regional arms races and reduce tensions. However, when buyers can develop the capability to produce conventional or unconventional weapons, arms export controls can increase the incentive for proliferation. The authors discuss a general framework for analyzing the arms trade and examine the dynamic decision problem faced by a country deciding whether to make an irreversible investment in arms production capability under conditions of uncertainty.