Why Do Small States Produce Arms? The Case of South Korea

Abstract

Abstract Armaments production provides us with an intriguing case where we can challenge widely held assumptions of a nation's economic rationality. Beginning in the 1970s, the Republic of Korea (ROK) initiated an aggressive defense industrialization program, with the long-term goal of establishing “a basic foundation for a self-defense capability for the 21st century.” After more than 30 years of significant public and private inputs in infrastructure and technology, however, the ROK still possesses only limited capacities for self-reliant arms production, and, in general, indigenous arms production has turned out to be neither technologically practicable nor cost-effective. Yet, even in the face of such intimidating technological and economic challenges, the ROK continues to pursue an ambitious, overly optimistic, and perhaps even naive strategy of defense industrialization and arms production. The answer to explaining the ROK's rather idiosyncratic arms-procurement and production decision-making behavior lies perhaps more in more intangible variables, beyond the limited confines of comparative advantage supported by assumptions of economic rationality. In particular, in the case of the ROK, one must take into account such powerful if hard-to-quantify incentives associal psychology (such as collective memory) and status (such as national pride and technonationalism). Ultimately, armaments production has its own operating logic, and the justification for domestic defense manufacturing often goes beyond the narrow confines of sectoral competitiveness.