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.