The Political Economy of East–South Military Transfers

Robert M. Cutler, Laure Després, and Aaron Karp

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The Political Economy of East–South Military Transfers

[0. Introductory Remarks]

Most work on military assistance given by the Union of Soviet Socialist Republics (USSR) and its East European allies to the less-developed countries (LDCs) approaches the subject from the standpoint of global strategy, either through studies of

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bilateral military relations (e.g., Soviet arms exports to a given Third World country) or through the compilation of aggregated arms-trade statistics. This article adopts a perspective grounded in the evolution of the international economic order. It investigates the specifically economic factors that affect Soviet arms trade with the Third World and that explain why Eastern Europe’s military assistance to the Third World has shifted from arms transfers to technical assistance. The analysis illuminates how changes in Soviet–East European military cooperation have affected East European competitiveness in the global arms market.

Traditional scholarship on Soviet–East European relations can be divided into two major schools of thought, the hierarchical and bargaining models. Each of these presents a different interpretation of conventional arms production and trade by Eastern Europe. The hierarchical model views the Warsaw Treaty Organization (WTO) and the Council of Mutual Economic Assistance (CMEA) as instruments of Soviet control and alliance management, enabling the USSR to ensure the execution of its policies and the efficient mobilization of East European military resources for that purpose. According to this model (implicit in Remington, 1971; Checinski, 1975; Hutchings, 1983), Moscow needs East European arms production to maximize the size of WTO forces but restrains its allies from acquiring any significant independent capabilities. Military procurement in the Soviet bloc, in this view, is strictly standardized, and production is based on an alliance-wide division of labor. Arms transfers occur exclusively at Soviet behest and principally for Soviet purposes. Any benefits to Eastern Europe are only incidental.

According to the bargaining model, on the other hand, the WTO behaves much like the North Atlantic Treaty Organization (NATO). East European countries vie with the Soviets and one another to maximize their political opportunities and economic welfare. They compete for sales both within the WTO and in the Third World, where they compete with Western suppliers as well. According to this model (implicit in Wolfe, 1965; Erickson, 1982; Campbell, 1984), the governments of the East European countries bargain explicitly as well as tacitly with Moscow over the size of their militaries, the sophistication of their arsenals, and the output of their mili tary industries. The East Europeans use arms exports to promote a variety of national interests, including the health of their domestic arms industries, while striving at the same time to maximize imports of Soviet and Western military-industrial technology that they can then use to develop the widest possible range of their own indigenous weapon systems.

Both the hierarchical and bargaining models offer important insights into Soviet–East European relations. The analysis that follows will show that the bargaining model is more appropriate for explaining arms production in the East European countries, while East European arms transfers correspond more closely with the hierarchical expectations of Soviet initiative and guidance. But neither of these traditional models adequately explains recent developments in either arms production or arms transfers. A unified explanation must be sought elsewhere. A perspective that emphasizes universally applicable economic principles such as comparative advantage can bridge the gap that prevents the hierarchical and bargaining models from providing a comprehensive explanation of these contemporary developments.

The three parts of this article illustrate three levels at which economic phenomena can be analyzed in the study of world politics. The first part considers the behavior of a single state actor, the Soviet Union, invoking the tradition of classical economics through an analysis of supply and demand to explain variations over time in Soviet

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arms trade with the Third World. The second part of the article shifts the discussion to the East European countries and their participation in military transfers to the Third World, including technical assistance and arms. This part of the analysis treats overall patterns of relations between the East European countries on the one hand and the Third World countries on the other. It draws implicitly on the world-system analytical perspective by considering each group principally as an aggregate entity, though noting their internal differentiation where appropriate.

The analysis of differences within the WTO bloc comes to the fore in the third part of the article, which analyzes Soviet–East European coordination of military production. This analysis delineates basic elements in Soviet–East European relations that motivate patterns of Soviet behavior, exposited in part one, and of patterns of East European behavior, exposited in part two. It pays special attention to differences in behavior between the Soviet Union and its East European allies, and among the latter individually. As such, it focuses on sources of change (see Krasner, 1982b: 186–89) in the region-specific international regime that governs the intra-WTO division of labor concerning military exports and technical assistance to the Third World. The third part of the article concentrates on how that regime explains differences among the East European countries’ patterns of military transfers and the differences in those patterns over time. It thus illustrates the application of the international political economy approach to the analytical task at hand.

1. Economic Determinants of Soviet Arms Exports

1.1. Determinants of Third World Demand for Soviet Arms

The vast growth of the international arms trade during the 1950s and 1960s can be explained first of all by the decolonization of Western empires, which created a large number of potential new consumers. Beginning in 1956, the USSR entered the market as an important provider of arms. (For a review and evaluation of the various available data sets on Soviet and East European arms transfers, see Despres, 1984.) At first every producer furnished arms principally to its political clients, but the developing countries quickly learned how to take advantage of rivalries between the two superpowers and their allies. There are numerous instances of an LDC turning to the USSR after being refused a particular arms system or not being granted a given condition of sale by the United States, the United Kingdom, or France (Chari, 1979: 233). This happened in India in the early 1960s, in Egypt in the mid-1950s (Kamoff-Nicolsky, 1980: 1), and also more recently in Zambia in 1979 and Jordan in 1981.

This led to a certain “banalization” of the USSR as an arms supplier; if during the 1960s arms purchases from the USSR were a clear sign of an LDC’s opposition to Western countries, by the 1970s they were no longer systematically associated with support for Soviet foreign policy. Numerous countries, such as Peru and Jordan, purchase Soviet armaments but accept only the minimum number of Soviet military advisors necessary on their soil. Their votes in international forums do not seem to be influenced by their arms supplier. (For a detailed comparative analysis, see Schrodt, 1983.)

Clients’ arms dependence on their single patrons declined during the 1970s, in large part because the number of arms suppliers on the international market had increased. However stricter terms of sale—such as the demand for cash payment

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rather than the extension of loans or outright grants as in the past—also encouraged clients to shop around. European producers and the new arms producers in the Third World, as well as the USSR, took advantage of President Carter’s decision to restrain American arms sales to the Third World, thereby breaching America’s domination of the market (Laird, 1983: 30–31). A seller’s market has been transformed into a buyer’s market (Mallmann, 1979; Laird, 1983: 27–28), and this transformation has been so thoroughgoing that even traditional Soviet clients have not hesitated to seek negotiations with other suppliers. In a general sense, arms clients sought to diversify their sources of supply (Pierre, 1982: 18) in order to reduce their political or military dependence. As a result, the Soviets have had to become more flexible and competitive in setting the conditions of their sales.

The rise in the price of oil in the 1970s and the increased oil revenues of the OPEC countries influenced the growth in demand for Soviet arms during that decade. (See Table 1.) Some such buyers were already traditional Soviet clients—Algeria, Iraq, Libya, and Nigeria, for example—although their purchases were traditionally in small amounts. In 1975, following normal delivery delays, the overall volume of arms purchases by OPEC countries from the USSR suddenly increased to 15 times the average of the five preceding years. Since 1974 OPEC, plus Syria, have represented the lion’s share of sales by the USSR to the Mideast/North Africa region—usually over 95 percent. Purchases from the USSR by countries in this region generally amount to less than half their total purchases from all arms producers; only

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1973–74 and 1979–80 have been exceptions, when these were slightly over half (SIPRI, 1984b: 212–13, 1985).

After a hiatus in 1976–77, the increase in Soviet arms deliveries to the OPEC countries and Syria continued without interruption until 1980. Since then, OPEC (plus Syrian) purchases from the USSR have declined significantly: average deliveries for 1981–83 amounted to only 68 percent of total deliveries of major weapon systems in 1980. Since 1982, deliveries have stagnated at this same level. Given the usual delay between arms orders and arms deliveries, this development may be explained as the result of stagnating revenues after the drop in the price of oil in 1979. Half of the overall decline in Soviet arms sales to the less-developed countries since 1980 is due to a drop in demand by the OPEC countries and Syria, whose arms purchases are largely funded by the OPEC states.

The other half of the decline in Soviet arms sales to the Third World since 1980 is attributable to the non-oil-exporting LDCs, which suffer increasingly from over-indebtedness; as a result, they must restrain their imports generally, including arms imports in particular. In this perspective, the USSR’s situation is similar to that of other arms producers, all of whom are faced with the recent decline in global demand. But the Soviet Union has not defended its share of the Third World arms market very well: in 1979–80 that share was about 45 percent, in 1981–82 it was 32 percent, and by 1983–84 it had dropped to about 27 percent. The West European countries, whose market share together was less than 20 percent before 1980, reached a peak of 28 percent in 1981 but then declined, leveling off at 23 percent in 1983–84. This is still a larger market share than that of the United States. After President Carter’s policy of self-restraint led to a sharp drop in the U.S. market share, from 55 percent in 1976 to 24 in 1979 and 22 percent in 1981, the figure rebounded to 30 percent in 1983, only to fall back again to 21 percent in 1984 (Grimmett, 1982: 16; 1984: 22). The newer arms producers, like the West Europeans, have also increased their Third World market shares.

The principal Western arms producers frequently sell licenses for military production to their privileged clients, but the USSR has until now been extremely reluctant to do this, despite repeated requests by certain LDCs, Iraq in particular, for the transfer of arms-production technology. Among all LDCs, only India has obtained the right to produce major Soviet weapon systems under license. Since the beginning of the 1960s, the USSR has constructed two factories in India to make MiG−21 engines and airframes as well as a factory for electronic equipment. In 1978—largely in an unsuccessful bid to dissuade India from purchasing Anglo-French jaguar airplanes—the USSR agreed to permit India to coproduce MiG−23/27s. More recent agreements license Indian coproduction of T−72 tanks and MiG−29 aircraft (Laird, 1983; Lewis, 1985).

The Indians seem generally satisfied with this cooperation in the field of production. Their goal was to achieve a degree of self-sufficiency. During the first phase, 1966–67, the MiGs were assembled from imported parts. In 1972, 60 percent of the airplane was locally produced, and since then a factory for subsystems has been built in order to increase this fraction still further. Despite their success, the Indian military complain about Soviet reticence to furnish technical information, this being a reflection of the latter’s general penchant for secrecy. Such difficulties have not developed into major differences largely because of the political oversight that leaders of the two countries have exercised over their respective military bureaucracies (Chari, 1979; 236–40).

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Soviet arms transfers to the Third World result from more than Soviet foreign policy objectives. The foregoing analysis, for example, demonstrates that the difficult economic and financial situation of many Third World countries explains much of the drop in Soviet arms sales to them. Not only national economic objectives but also technological imperatives and the international economic order come into play here. What incentives, then, from the Soviet Union’s point of view—over and above well-known strategic and political advantages—motivate Soviet trade with the Third World in military commodities?

1.2. Determinants of the Supply of Soviet Arms to the Third World

Three economic arguments are frequently offered to explain East-bloc arms sales to the LDCs: economies of scale, comparative advantage, and hard-currency exchange. The last of these is incontestably the most important economic factor explaining Soviet arms sales.

The most recently published CIA data (Zoeter, 1982) assumed that the percentage of arms deliveries paid in hard currency had risen monotonically from 52 percent in 1970 to 96 percent in 1978 and fallen slightly thereafter to 85 percent in 1981. This drop resulted from the OPEC countries’ financial difficulties caused by the fall in the price of oil and from a spike in arms deliveries to Vietnam in 1979. On the other hand, Wharton Associates estimate that since 1980 about three-quarters of Soviet arms sales have been made for hard currency but only one-quarter of that being paid in cash, the remainder being financed by hard-currency credits from the Soviet Union to its Third World clients. (See Table 2.)

What fraction of total hard-currency receipts do arms sales represent? Zoeter estimates an average proportion of 16 percent from 1971 to 1981, with highs near 20 percent in several years. During this period the USSR would have gained about twice as much hard currency from arms sales as from gold sales, but only about 40 percent

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as much as from oil and natural gas sales. Comparison of the hard-currency gains due to arms sales (about $27 billion between 1971 and 1981) with the hard-currency debt of the USSR (about $12.5 billion at the end of 1981) (Zoeter, 1982) reveals that this debt would have been three times as large in the absence of arms sales, assuming that the Soviets would not have changed their purchasing strategy and that they would have taken loans from Western banks in order to pay for imports that they settle in hard currency.

A study published by Wharton Associates (Laird, 1983: 24–25) furnishes still another estimate: Soviet arms sales paid for in hard currency are fixed at 40 percent for the period 1971–73, rising to 75 percent after 1973. This estimate of 40 percent for the years 1971–73 is lower than both Zoeter’s estimate and the U.S. Department of State’s (1982) estimate. Yet all these estimates are closer and more compatible if absolute values rather than percentages are compared. For example, Laird estimates that from 1971 to 1980 the USSR gained $21.1 billion in hard currency out of total sales of $32.4 billion, grants excluded. The equivalent CIA data, which include grants evaluated at par to selling prices, are $22.7 and $37 billion. Given problems of data comparability, the difference is remarkably small. Laird (1983: 26) estimates that between 1971 and 1980 about 88 percent of the Soviets’ $21.1 billion total hard-currency gain from arms sales was used to purchase products from the developing countries, leaving only $2.6 billion to cover—and only in part—the commercial deficit with the West. From 1982 to 1985, the gain in hard-currency cash may be estimated (according to the Wharton methodology and assuming that the past tendencies will continue) at a total of about $6.6 billion of net hard-currency debt at the end of 1985. (See Table 2.)

For the last six years available, from 1980 to 1985, hard-currency arms sales (including those on credit) represent about three times the volume of gold sales, which is also slightly less than 30 percent of the net sales of fuels. (See Table 3.) Although estimating the USSR’s hard-currency receipts and hard-currency debt is a

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very delicate and uncertain enterprise, one can nevertheless conclude that arms sales to the Third World are indeed one of the major sources of hard currency for the Soviet Union and that both the decline in the overall volume of those sales and the decrease in oil prices explain the 1985 increase of the Soviet net hard-currency debt from $9 billion to $13.7 billion.

If the Soviet Union seeks to sell the maximum quantity of arms in order to obtain the maximum amount of precious hard currency, then it must at the same time expend its own precious raw materials for this purpose and use production capacity and skilled labor that could be allocated to other production. Consequently, and in this sense, it is possible to pose the question of whether arms exports represent a significant burden on the Soviet economy. The value of the USSR’s arms exports as a percentage of its gross social product (GSP) is extremely low—on the order of several parts per thousand—but it has constantly grown during the period studied. Because military products and production goods are relatively substitutable (Melman, 1982: 73–83; Bond, 1983: 183–91; Cohn, 1983: 199; Mosley, 1984: 32–34, 65–66; Dussauge, 1985: 120–22), we can interpret those exports as a fraction of overall total investment, or of the gross machinery production. These percentages are clearly higher: Table 4 shows them increasing steadily from 0.8 and 1.1 percent respectively in 1971 to 3.8 and 3.4 percent in 1982, decreasing thereafter to 2.7 and 2.2 percent in 1985 as a consequence of the decrease in arms sales themselves.

It follows that the USSR’s arms exports to the developing countries are neither a large nor a negligible burden on the country’s productive capacity. (The USSR’s exports to developing countries represent a relatively low fraction of its exports: 13.2 percent in 1985, for which year its total exports to all countries were 72.5 billion rubles, or about 5 percent of that year’s gross social product.)

The question remains of how to explain fluctuations in the Soviet Union’s arms sales to the developing countries. The very nature of these transactions could explain the absence of a regular and constant flow; Libya alone could strongly influence the total quantity of arms sold in any given year. But more fundamental and structural reasons relative to the nature and the functioning of the Soviet planning system have been invoked to explain these fluctuations. Hutchings (1978) notes that the USSR’s arms sales to developing countries followed the same pattern during the Sixth, Seventh, and Eighth Five-Year Plans, rising at the beginning and the end of the plan and falling from the second through fourth years. He offers several explanations for this. First, the length of time needed to develop major arms systems seems to average about six years. If research and testing begin with the first year of a given five-year plan, then production would start during the first year of the following five-year plan. This new production would reach a regular rhythm during the third year of the plan, and exports to the Third World would begin two years thereafter, following the arms’ first distribution to the Warsaw Pact. This would cause an increase of arms exports during the first and second years of the plan, which is what is observed (see also Checinski, 1977). Second, Hutchings remarks that the socialist countries concentrate their imports toward the last years of the plan. Consequently, the Soviet Union would tend to concentrate its exports to those countries during these years, augmenting its exports to the Third World only toward the beginning of the plan. Third, Hutchings mentions a positive correlation between the USSR’s military spending and its arms exports.

However well these reasons may explain regular fluctuations of the USSR’s arms sales to the Third World during the 19505 and 1960s, the last decade-and-a-half

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exhibit completely different regularities. Arms sales to the Third World drop at the beginning of these plans and then increase from the second through fifth years. This modification of the planning system’s behavior could result from the fact that the USSR is under greater compulsion to obtain hard currency; such a condition could alter its arms sales behavior. An alternative explanation, equally speculative, would note the customary practice of “storming” at the end of the plan-storming this time to maximize hard-currency revenues. Whichever is the case, it is clear that not just external factors but also Soviet domestic constraints are an important influence on Soviet arms trade patterns.

1.3. Past and Future of Soviet–LDC Military Cooperation and Sales

Military cooperation between the USSR and the LDCs assumes varied forms, and there is no transparent correlation between simple military cooperation and economic cooperation. Iran, Turkey, and Morocco—three of the six largest recipients of Soviet economic aid between 1954 and 1981 (U.S. Department of State, 1983: 17–18)—have no military cooperation with the USSR. The same is the case for Brazil, which is third in the amount of economic aid received from the East European countries, and for Iran, which is fifth. Nor is there any correlation between a country’s annual arms orders and the number of trainees sent to the USSR, although one might think that there should be a causal link between the two, since trained personnel would be needed to operate the military commodities transferred (CIA, 1978: 4). Any hypothesized causal link would have to control the level of technological sophistication of the recipient country: the higher that level, the lower the number of trainees. (By contrast, the relationship between the level of development and need for technical assistance among countries importing Western arms is a U-shaped curve. This is because newly industrializing countries, for instance, have the technical skills to use Soviet arms, whereas the most advanced Western arms remain too sophisticated for them to handle alone.) Finally, there is no simple relation between the number of trainees that an LDC sends to the USSR or Eastern Europe and the number of military advisors from these countries in the LDC.

The particular situation of any developing country involves civilian as well as military cooperation, not to mention commercial relations. At one extreme of this spectrum is Turkey, whose civilian cooperation with the USSR is very high but whose military cooperation with and arms purchases from the USSR are nonexistent. Afghanistan has a high level of military cooperation and a significant civilian cooperation, but its arms purchases in recent years have been very low. India, which until 1980 sent almost no military trainees to the USSR or Eastern Europe and received very few technicians either military or civilian (150 and 1,625 respectively in 1981), is an important trading partner of the USSR, one of its largest arms sales clients, and, moreover, benefits from military cooperation agreements. Recently these agreements have been extended to include the production of the most modern Soviet weapon systems, which is probably why since 1980 India has sent about 1,800 trainees to Warsaw Pact countries and in 1985 hosted as many as 500 military technicians from those countries.

Finally, Libya represents another extreme case. It exhibits a high level of arms imports, relatively low general commerce, and a large number of trainees and military personnel (3,300 military technicians and 44,000 civilian personnel from the Eastern bloc, and this for a country with a population of 2.5 million).

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Even if we introduce into the analysis different categories of LDCs that the Soviets themselves distinguish—for example, a first group of countries of socialist orientation (Afghanistan, Ethiopia, Angola, South Yemen, Mozambique), a second group also of socialist orientation but less closely tied (Iraq, Syria, Algeria, Guinea, Congo, Madagascar, Tanzania, Burma, Benin), and then a third group comprising all other LDCs—there still remains no homogeneous cooperation policy even for each of these groups. To be sure, military relations are significant for both groups of socialist-oriented LDCs, but this is the case for other LDCs as well, such as Libya and India. Moreover, such countries as Mali and Nigeria, and above all Zambia, have in the past purchased at least as many arms and received at least as much military cooperation as the sub-Saharan countries in the second group of socialist-oriented LDCs.

What lies ahead for Soviet arms sales? Will the stabilization in evidence since 1980, following a sharp decline, continue, or will the long-term trend since 1956 reassert itself? From a strategic and military point of view, the Soviet leadership does not seem about to adopt a policy of self-restraint in arms sales. Nor do other major exporters manifest any sign of self-restraint; the case is rather the contrary. Moreover, the LDCs themselves consistently oppose any discussion of this subject at the UN (Mallmann, 1979:304–5). Wherever one turns, there appears to be no political will that would limit the global arms race by controlling arms sales. The decline in arms sales to the Third World—and there has been a decline—results only from the increasingly heavy economic constraints on the purchasers.

It thus emerges that the USSR follows no ideal-typical policy of military and economic cooperation in its relations with LDCs. General economic factors certainly impel the USSR, like all other arms producers, to export the maximum quantity. In the Soviet case, the hard-currency factor is decisive. We must conclude that Soviet arms sales will continue to fall only to the extent that the LDCs continue to suffer from the lack of dynamism in the global economy and that at the first signs either of their economic recovery or of the alleviation of their debts (which itself seems improbable in the short or even the intermediate run), purchases by LDCs would cause Soviet arms sales, and those of other producers, to rise once more.

2. Eastern Europe’s Role in East–South Military Transfers

2.1. Arms Sales

The East European countries also have important military relations with the Third World. Their arms transfers, for example, have a distinctive profile that differs significantly from the Soviet pattern, even though these were considerably less significant for their trade balances throughout the 1960s and most of the 1970s than in the late 1950s. Their best-selling products have been their indigenous items, with the important exception of the T−54/55 tank. But East European designs must compete in the Third World against the best that other suppliers, Western and Third World, have to offer. With their military technology still rooted in the 1950s, the East European countries are at a growing disadvantage; most of their sales are appurtenances to larger Soviet deals. Since large Soviet fighter sales are usually accompanied by the sale of Czechoslovak jet trainers, Czechoslovakia has profited handsomely from this. In one exceptional case, Poland sold fifty of its indigenous TS−11 Iskara jet trainers to India in 1974. The Indians, expecting to use these inferior aircraft only as a temporary stopgap, paid a bargain price (Chopra, 1978; Green, Swanborough, and

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Chopra, 1982: 60–61). Eastern Europe can still serve as a Soviet surrogate in delicate diplomatic situations: when estranged temporarily from Moscow, Iraq turned to the East European countries, which were quite willing to supply some $1.3 billion in tanks, artillery, and sundry items (Snitch, 1984: 118). Now that relations between Moscow and Baghdad have improved, however, Soviet armaments have largely replaced those of its WTO allies (SIPRI, 1986b: 381–84).

The strongest challenge to established East European arms suppliers may well come from North Korea and India, which also coproduce Soviet equipment, and from China. North Korea cannot yet supply significant quantities of major weapon systems, but it has provided about 40 percent of Iran’s ordinance and ammunition in the war with Iraq (Halloran, 1982). India produces several Soviet systems, including MiG−27 fighters and T−72 tanks. Although India has rarely made major foreign arms transfers, recent indications are that it will market its military equipment more actively henceforth. Some Indian officials would even like to convert their country’s military industries to provide spare parts to the Soviet Union (Cherian, 1982: 52–61). China has sold considerable quantities of its versions of Soviet designs and provided Pakistan with facilities to overhaul these items. It has also sold Egypt spare parts for its MiG−21s that the latter can no longer obtain from the Soviet bloc, offered MiG−21s to the United States (Biddle, 1984), and indeed become Iran’s chief source of major weaponry in its war with the WTO-supported Iraq (SIPRI, 1986b: 381–84). Czechoslovakia and Poland, lacking competitive military technology, are losing old clients and cannot find new ones. More than 70 percent of their arms transfers go to the Soviet Union or other Warsaw Pact countries (U.S. Arms Control and Disarmament Agency, 1984). Their arms transfers have also suffered from the global recession and the Third World debt crisis that together cut total Third World arms purchases, from all sources, from $38.2 billion in 1982 to $30.5 billion in 1984 (Grimmett, 1985).

Czechoslovakia and Poland are further challenged by the German Democratic Republic (GDR) and Romania. The GDR began rearming in 1956, but economic problems retarded this process until the late 1960s. Struggling to build its own armed forces, the GDR was in no position to assist others. The country was diplomatically isolated throughout the 1960s, and its assistance to Third World countries helped to establish its legitimacy in the global arena (Sodaro, 1981). It first rushed support to the Middle East after the June 1967 debacle. But of equal importance was the invasion of Czechoslovakia in August 1968, for Czechoslovakia has since that time kept a low diplomatic profile, abandoning its role as the East European leader in relations with the Third World. The GDR has stepped into this void.

But the East Germans cannot assume Czechoslovakia’s role as an arms supplier. Their only military industries manufacture small arms, ammunition, spare parts, and small naval vessels. The GDR has considerable industrial potential, but it cannot yet execute a policy of assistance to the Third World that is based on the transfer of major weapon systems. Instead, it has concentrated on providing military advisors. By 1980, estimates of East German military advisors in Africa were on the order of 3,500 to 5,000 (Croan, 1980; Kanet, 1981: 308, 328). In global terms these numbers are far behind those of the superpowers, France, and even Cuba and Pakistan. The GDR’s military representation abroad is about the same as that of Israel, North Korea, or Taiwan. Still, the rise of the GDR did transform the nature of East European relations with the Third World. Transfers of major weaponry are no longer their leading diplomatic instrument. That role is now assumed by military training,

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advice, and technical assistance. The effectiveness of East German military training was demonstrated in the May 1978 rebellion in Zaire’s Shaba province, where rebels trained in Angola by the GDR and armed by the WTO members were far more coordinated and resolute than in a similar rebellion fourteen months earlier (Valenta and Butler, 1981: 153–55).

2.2. Technical Assistance

As recent East German experience shows, military assistance need not be limited to transfers of major weapon systems. Training and technical assistance are established components in the WTO countries’ repertoire of foreign policy instruments. According to the CIA (1978, 1980, 1986) and the U.S. Department of State (1983), the number of Soviet and East European military technicians increased from 3,635 to 10,125 between 1965 and 1970, a factor of 2.8. Following Sadat’s expulsion of Soviet military advisors from Egypt in 1972, this figure dropped 18 percent, reaching 8,220 in 1975, but after 1975 the number of these technicians grew very sharply, at a rate of 25 percent from 1975 to 1977, 56 percent from 1977 to 1979, and 15 percent from 1979 to 1981, reaching in 1981 (as shown in Table 5) the record level of 18,205 persons. Since then it has stagnated, reaching 18,375 military technicians in 1985. The Middle East and North Africa regions predominate; sub-Saharan Africa’s contingents are concentrated mainly in Angola and Ethiopia, and, to a lesser degree, Mozambique.

The specific role of the small European CMEA countries is difficult to evaluate, because the data are usually presented in aggregate form under the rubric “USSR and Eastern Europe.” East European military technicians did represent, however, 11 percent of the total Soviet and East European military contingent in 1981, roughly corresponding with their 9.5 percent share of total arms sales. This share was proportionately greater in Latin America (26 percent, but which represents only 60 technicians), a bit higher in North Africa and sub-Saharan Africa (13 and 14 percent respectively), and slightly lower in the Middle East (8 percent). The specific role played by the East Germans helps to explain this (Valenta and Butler, 1981). Indeed, the GDR has signed military cooperation agreements with several Third World movements and regimes: with the Angolan MPLA in 1973, with Ethiopia, and recently with Nicaragua (Bolanos, 1983). Moreover, the GDR and Cuba have signed a 25-year friendship treaty that provides for their continued support for Third World peoples who are “in struggle.” Throughout the civil war in Angola, the East Germans took care of training as well as of medical aid for soldiers evacuated from Angola to the Congo (Brazzaville). There seem to have been up to 700 East German military advisors, but direct military assistance ceased after the victory of the MPLA. The GDR has supported Ethiopia since 1977, when Moscow’s alliance with Somalia ended. According to the GDR defense minister himself, Ethiopia has received up to 1,500 military experts who engaged in combat during the offensive in Eritrea, and South Yemenites trained by the GDR fought in Ogaden (cited by Valenta and Butler, 1981: 155). The GDR furnishes medical aid to Nicaragua and Afghanistan, and seriously wounded Nicaraguan and Afghan soldiers are treated in East Berlin.

As Table 5 shows, military technicians represent about 16 percent of all technicians sent by the USSR and Eastern Europe in both 1979 and 1981; however, by 1985 this figure fell to 13 percent, due to the leveling off in the number of military technicians mentioned above, as well as to a substantial increase in the number of

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civilian and economic advisors. This percentage varies a great deal according to region, country, and period of time. The low percentage for Iraq is explained by a very large number of economic advisors (about 15,600), with which, aside from Libya (with 44,000) only Algeria compares, although there are also large contingents in Angola, Mozambique, and Mali (while East-bloc economic technicians, strangely, appear to have disappeared from Ethiopia). India’s very low proportion until the early 1980s confirms its status as a special case. Although it appears that in numerous cases, the number of military technicians and advisors is much higher than necessary (higher at least than the number of technicians and advisors sent by Western countries in similar cases), this nevertheless represents only a minority of the various Soviet and East European contingents (Pierre, 1982: 75–76).

A total of 46,985 LDC military personnel were trained in the WTO countries over the whole period 1956–77; this figure rose to 51,930 for the period 1955–79; 57,795 for the period 1955–81; and 82,415 for the period 1955–85. If we assume the number trained in 1955 alone to be negligible, then these figures reflect a mean increase of 5.4 percent each year from 1977 to 1981, since which time the rate of growth has doubled (CIA, 1978, 1980, 1986; U.S. Department of State, 1983). Angola, Ethiopia, and Mozambique had no personnel trained in the Eastern bloc before 1977, but between 1977 and 1981 this number rose sharply, to 180, 2,095, and 530 respectively, fluctuating thereafter until reaching in 1985 the levels of 1,500, 680, and 1,000. Although these countries receive comparable numbers of military advisors from WTP countries, they apparently follow very different training policies, Nicaragua had 260 military personnel trained between 1979 and 1981 but sent 1,200 for training in 1985; Afghanistan, which had no military trainees in the WTO countries in 1979, sent about 800 in both 1980 and 1981, this number rising to 1,300 per year from 1982 to 1985. The military personnel sent for training from the Middle East grew at an annual rate of about 5 percent between 1977 and 1981, and at a rate of 8 percent since then. North Yemen, however, shows a much more significant increase, sending 185 trainees from 1977 to 1979, 700 over the next two years, and 2,250 from 1982 to 1985.

Eastern Europe provides training for a growing proportion of Third World trainees in the WTO countries. This proportion, as low as 11 percent for the period 1956–79 and 12 percent for 1955–79, rose to 21 percent during 1982–85, reaching 30 percent in 1985 alone (2,835 as against 6,465 for the Soviet Union). This is still lower than the proportion of civilian students they train from the Third World (12,400 as against 14,690 for the USSR at the end of 1979, the most recent year for which this figure is available). The military contingent from the Third World in the East European countries, as a proportion of all students, was slightly greater than 4 percent in 1979, dropping thereafter to slightly less than that (CIA, 1980: 16, 22–23). This corresponds with the generally decreasing significance of the East European countries as a source for transfers of major weapon systems to the Third World: their exports of major weapon systems to LDCs represent about 1 percent of Soviet exports for the period 1981–86 (SIPRI, 1986a). The East European countries taken together, however, account for close to one-fifth of the level of total WTO transfers, including munitions and services (CIA, 1986: 74). It follows that East European specialization in transfers other than major weapon systems has intensified, leaving the latter field to the Soviets. There is every indication that future East European patterns of military transfers will continue to diverge from those of their regional hegemon.

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2.3. Past and Future of East European Participation in the Global Arms Bazaar

Eastern Europe has lost its niche in the international arms market. The military equipment it offers is consistently less competitive not only in the European theater but also in the Third World. Many small and middle powers have also been compelled by economic and technological forces to contract their arms industries, but some have retained or even strengthened their place in the international arms market by specializing. Belgian small arms, Norwegian antiship missiles, and Swiss ordnance are just a few examples. However, with the important exception of Czechoslovak jet trainers, Eastern Europe has not been able to adjust in this manner. With research and development costs rising much faster than their military budgets, and with most avenues to foreign military technology cut off, the East European countries are hard pressed to keep up.

This is not to say that East European armaments are inconsequential. In specific cases, such as the resupply of Iraq in 1980–81, Eastern Europe can still transfer huge quantities. But this depends on the fortuitous combination of Soviet diplomatic requirements, client needs, and East European capabilities. The great majority of East European arms transfers to the Third World are marginal diplomatic oddities. Nevertheless, even small arms transfers can have an importance out of proportion to their size. Small sales to small states, insurgents, or terrorists can fortify unpopular rulers, aggravate civil wars, or panic whole polities. Unintended side effects can also result: regional powers have often used small-scale arms transfers to their adversaries as justification for large-scale military interventions.

Given this perspective, Eastern Europe’s gradual transition from security assistance through arms transfers to a policy stressing human skills is a necessity clothed as a virtue. It is not that human skills are a preferable form of security assistance, but rather that this is the only marketable military commodity that Eastern Europe has left. By supplying military training, tactics, efficient organization, and logistic technology, Eastern Europe can playa crucial role in the survival of governments and in the success of putative autocrats. Moreover, the skills of military organization, discipline, and logistics can be instrumental in the civilian economic development of some least-developed countries. But this transformation is evidence of another decline in East European influence: transfers of major weapon systems in the past gave Eastern Europe access to some of the largest and most influential Third World countries, but the human military technology they now have to offer is most useful to the smallest and least developed.

Unless the East European countries make much greater efforts to modernize and expand their military industries, their position as arms suppliers will continue to erode. While the rest of the world continues to modernize, Eastern Europe still relies on technological investments made fifteen to thirty years ago. Many Third World arms manufacturers have already passed them by. Other manufacturers of vintage Soviet designs—especially China and North Korea—sell uninhibited by Moscow’s heavy hand.

If Eastern Europe is to update its military industries, the GDR and Romania are the likely candidates for rapid expansion. Their industries are the healthiest and most dynamic, they are diplomatically prominent, and they both have some access to foreign military technology. Czechoslovakia and Poland should not be dismissed; quiescent for years, burdened by economic problems arid Soviet suspicions, they still retain substantial potential. But unless the East European countries reorient their

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domestic priorities, their military industries will continue the USSR remains unsympathetic to their situation.

3. Soviet–East European Coordination of Military Production

The policy that guided Soviet promotion of East European military industries during the 1950s was equally applied to the newly established People’s Republic of China. Starting in 1954, the Soviets established factories to build a complete range of conventional armaments in China. These included MiG−15/17 and MiG−19 fighters, Il−28 tactical bombers, Mi−4 helicopters, and T−54 tanks, among others (Heymann, 1975). When the Chinese expelled all Soviet technicians in August 1960, the USSR found itself confronted with a hostile power that it had itself armed. The Sino-Soviet split may also have helped to convince Moscow to cease issuing production licenses to its remaining allies. Events in East Berlin in 1953 and in Hungary and Poland in 1956 had already cast doubt on the trustworthiness of the East European allies, and after 1963 Romania increased its foreign policy independence. The Soviet Union would not then have found it hard to conclude that East European arms production no longer served its own best interests.

The most important indigenous program was undoubtedly the Czechoslovak L−29 Delfinjet trainer (Gunston, 1983: 397–98), which remains the only foreign-designed military system on which the Soviet Union is totally dependent. Czechoslovakia had hoped to sell its indigenous jet trainer worldwide, but the L−29 was hard pressed to compete in a market flooded with equally good or better machines from the West, and it focused its attention on the Warsaw Pact. The prestigious Soviet contract made selling to other allies less challenging, but this still required salesmanship. Poland’s TS−11 Iskara lost the fly-off in Moscow at which the L−29 was selected, but Poland decided to produce the aircraft anyway and tried to sell it on the international market. But the success of the indigenous programs camouflaged the fact that East European military-industrial technology was not advancing. The Soviet coproduction licenses of the 1950s—the source of much of the technology in Eastern Europe’s indigenous programs—were not being renewed. After 1961, no East European country received new production licenses for any major Soviet weapon systems, with the exception of tanks. These countries faced a choice between keeping obsolescent items in production and ending production altogether.

3.1. The Decline of East European Military Industries from 1961 to 1978

Just as Eastern Europe’s role in East–South arms transfers was declining in the early 1960s, its military industries were achieving their greatest strength and diversity. Old production lines continued to turn out Soviet-designed weaponry, while new facilities were being created to produce locally designed equipment. The East European countries were transferring imported Soviet technology to their own projects and, for the first time since the 1930s, were introducing indigenously developed weaponry. They lacked the research and development budgets, however, and in some cases the skills, to develop state-of-the-art combat systems. Indigenous East European programs were thus locked into a Catch−22: military industries could build diversity only by incorporating less-sophisticated military technologies dating from the late 1950s, which undermined the products’ competitiveness because, dating from the late 1950s, they were increasingly outmoded.

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Moscow might have justified in several ways its reluctance to share its military technology. It was abandoning its reliance on intermediaries in Third World arms agreements and could have wished to preclude competition. At the same time, the Soviets were becoming accustomed to earning foreign currency through arms transfers. Many of the earliest WTO arms transfers to the Third World were heavily subsidized by grants, soft loans, or payment in local currency or in goods and raw materials. Gradually the Soviet Union, like other major arms suppliers, began to make such financial assistance available only in exceptional cases and regularly insisted on prompt payment in hard currency (Pajak, 1981; Laird, 1984). As arms transfers emerged as a major component in Soviet exports, economically competitive allies became still less desirable. Moreover, the Soviet Union no longer needed East European factories to arm the Warsaw Pact. Khrushchev’s shift to nuclear deterrence justified the reduction of conventional forces, permitting resources to be shifted to the civilian economy. As technological modernization increases production costs, the Soviets may have felt compelled by economic necessity to reduce production rates. For example, in the ten years from 1949 to 1958, at least 14,000 MiG–15/17 fighters were produced. In the subsequent decade these were superseded by only 10,000 MiG−21s, which in turn were replaced with just 1,500 MiG−23/27s in the decade following that. Feeling the burdens of its own overcapacity, the Soviet Union had strong incentives to monopolize production of major weaponry within the Warsaw Pact.

3.2. The Controlled Renaissance of East European Military Industries since 1978

In the late 1970s East European arms industries began to show signs of modest revival. Military production moved laterally through the Warsaw Pact permitting Bulgaria, the GDR, and Romania to assume greater leadership in Third World arms transfers and security assistance. In 1978 the Soviets started modernizing East European arsenals with weaponry from the 1960s. Soviet transfers included MiG−23 fighters, Mi−24 helicopters, and SA−9 surface-to-air missiles, all of which had been shipped to Soviet clients in the Third World several years earlier. In the 1950s such items would have been coproduced in Eastern Europe, but now the Soviet Union supplied Eastern Europe with “off-the-shelf” equipment just as it supplied its allies in the Third World. The Soviet Union moved production of its An−28 turboprop transport to Poland, which continues to build military helicopters, patrol vessels, and small arms. Czechoslovakia continued producing its L−39 Albatross jet trainer (a modernized version of its L−29), armored personnel carriers, and artillery; and it has introduced a new indigenous self-propelled Howitzer, the 152-mm Dana.

The East European countries have tried to compensate for the lack of Soviet supply of military technology by trading such technology among themselves. Czechoslovakia, Hungary, and Poland all trade their respective indigenous armored vehicles, desiring to deal among themselves rather than to buy similar Soviet systems. Poland coproduces the Czechoslavak OT−64 armored personnel carrier, as does Hungary. Czechoslovakia and Poland both use Hungary’s FUG scout car. This pattern creates minor problems for Warsaw Pact military standardization, but it enables the East European countries to subsidize one another’s independent ventures. Such trading can only balance out their capabilities, however, and cannot substitute for new infusions of Soviet military technology.

The only major new military production license has been one enabling Czechoslo-

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vakia and Poland to begin manufacturing the Soviet T−72 tank. Moscow had already supplied large quantities to the Third World, so it was probable (perhaps explicitly guaranteed) that Eastern Europe would share in follow-on orders. In practice, the switch to producing the new tank has not been smooth, apparently because of the obsolescence of Eastern Europe’s military-industrial base. There was a four-year lag in bringing it to series production after receiving the license in 1978, and the production rates since then have been quite low (100 units for Czechoslovakia and Poland together in 1982), while the old T−55s still continue to be produced (500 units in 1982). The defeat of Syrian T−72s by older Israeli machines in the 1982 war in Lebanon has further complicated matters by darkening future sales prospects (U .S. Department of Defense, 1983: 80).

New licenses for fighter aircraft have not been reported. Because fighter technology has changed radically since the 1950s, when the last fighters built in Czechoslovakia or Poland were introduced, resumption of fighter production without considerable Soviet support would be extremely difficult and even with that support, perhaps impossible. The latest generation of Soviet fighters, the MiG−29 Fulcrum and Su−27 Flanker, have severely strained Soviet capabilities. Introduced a full decade after equivalent Western aircraft, they are still not in full-scale production. If Soviet factories are hard pressed to adapt to the new technologies involved (Strode, 1984; Sweetman, 1984), then East European licensees, who face a 25-year technological gap to cross, have bleak prospects.

4. “International Political Economy” or the “World-System”?: A False Opposition

It was suggested at the outset of this study that the hierarchical and bargaining models of Soviet–East European relations fail to capture important economic elements of the global political order that help to explain military transfers to the Third World, and that the international political economy and the world-system approaches illuminate significant aspects of those relations that would remain otherwise unclarified. Both these approaches indeed make clear the need for studies of global commerce in military commodities to give more attention to the autonomous role of international technological modernization in particular. Luke, for example, correctly takes account of this phenomenon in a general way when he asserts (1985: 347) that the Soviet Union’s position in the world economy is semi peripheral, dependent on Western technologies while exporting core-like products to the Third World and Eastern Europe and peripheral products to core areas in the OECD countries. But Luke neglects significant phenomena that fail to conform with that pattern, including such important constants as Soviet imports of finished goods, particularly machinery, from other CMEA states—notably East Germany and Czechoslovakia. Yet this shortcoming is shared by much work done in the international political economy approach; its prodigious literature is dominated by concern with the commerce and commercial policies of the advanced industrial democracies of the West, although that emphasis is understandable since these countries among themselves account for the vast majority of world trade (Nye and Keohane, 1977; Keohane, 1984).

The world-system approach, which Luke applies, has recently (compare Wallerstein, 1976, 1982; Chase-Dunn, 1980, 1981; Ost, 1982; Tylecote and Lonsdale-Brown, 1982) suggested that the CMEA countries are being integrated into the world capitalist system. Vayrynen (1983), however, does not take this into account; in

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his attempt at a general characterization of the semiperiphery in the global military-industrial order, he hardly mentions the Soviet Union or any East European country. Moreover, no subcategory of the semi periphery that Vayrynen develops is defined by empirical criteria that any of the CMEA countries would meet. The root of this difficulty would seem to lie in the nature of the world-system approach itself, which seeks to abstract from the particular characteristics that the CMEA member-states have in common. However, although this analytical approach tends to fail to differentiate between the Soviet Union and the East European countries or among the latter individually, it does shed light on important features of their collective relations with other actors in global politics.

As is known, the member-states of the CMEA differ even among themselves concerning the basic role of foreign trade in centrally planned economies. Some planners in the East European countries feel that exports should function not to optimize capacity or resource allocation but instead to secure revenue for covering import requirements; others contend that the CMEA countries must merge into the international division of labor in order to improve their own economic efficiency and viability; and still others attempt to resolve this dispute by speaking of a “socialist international division of labor” that is distinct from the international division of labor more generally conceived. (Compare, for example, Paszynski, 1981: 38–40, with Dobozi and Inotai, 1981: 48–50.) Thus, the CMEA countries can today be treated as a homogeneous unit in the world economy only with difficulty.

From the fact that the East European states, motivated by Soviet intrabloc trading behavior, have responded to international economic developments by diversifying their general trade patterns and developing technical assistance capabilities, it follows that the international regime that is particular to the Soviet–East European region and governs military production and transfers to the Third World, has changed. In particular, it is the norms and rules if not the procedures as well, that regulate the intrabloc division of labor that have shifted, leading to general and differentiated changes in East European strategies for industrialization and economic growth (Clark and Bahry, 1983). The present study reveals that international technological modernization and its repercussions within the WTO bloc are the principal developments motivating the observed shift in the international regime within that bloc that govern military transfers to the Third World. The international regime therefore emerges as an intervening variable that mediates the effect of the world economy on East European state behavior. This has occurred in other economic sectors as the Soviet Union and its East European allies have entered the world economy, of which their behavior therefore can be only less and less autonomous. They have become subject to global market forces affecting general commerce not only in military but also in nonmilitary products. As the role of the USSR as regional economic hegemon declines, it is increasingly evident that changes in the intrabloc economic regime may have autonomous effects on the international economic order (see Krasner, 1982a: 503–9, 1982b: 186–94).

The general strengths and weaknesses of the international political economy and world-system approaches emerge from this summary of the light they shed on the particular topic at hand. Specifically, those strengths and weaknesses derive from the contrast between the levels of analysis to which each approach is addressed. International political economy is principally concerned with the relationship between the state- and international-regime levels of analysis, whereas the world-system is mainly concerned with the regime- and international-system levels of analysis. (It is possible

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to synthesize the clear and unequivocal advantages offered by the international political economy and world-system approaches—advantages that they hold over the two traditional models of Soviet-East European relations, the hierarchical and bargaining models, neither of which compasses economic sources of the international behavior of states.) Recent work (Comisso, 1986; Tyson, 1986) suggests not just that the two approaches are not mutually exclusive, but, moreover, that a judicious combination of them can accommodate analytically based “within-group” differentiations among state actors whose common distinct attributes also provide a basis for treating them separately as a collective unit for the purpose of holistic interpretation.

5. Conclusion: Soviet–East European Military Relations and Global Military-Industrial Development

The findings presented here reveal the need for substantial revision of standard interpretations of Soviet–East European relations and WTO armaments policy. The hierarchical and bargaining models are revealed as useful ideal types, but neither can be applied across the board to all facets of the military relationship. East European arms transfers generally fit hierarchical expectations. Soviet allies transfer arms to the Third World only where this suits Soviet purposes. In only one instance has a WTO member transferred arms in contradiction to Soviet policy: this occurred in 1975, when Romania briefly supported Holden Roberto’s FLNA in the Angolan Civil War, while the Warsaw Pact backed the victorious MPLA. The only known refusal to transfer arms in support of Soviet objectives came in 1967–68, when Dubcek’s government in Czechoslovakia refused to help the WTO arm the federal government during the Nigerian Civil War (Gavshon, 1981: 242; Porter, 1984: 103). Even when East European countries transfer arms to countries in the gray areas of Soviet diplomacy, it is safe to assume that they act with the Kremlin’s approval. But East European arms transfers are not as orderly as the hierarchical model assumes, and the roles played by individual countries correspond to no hierarchically determined political plan or principle.

WTO arms production corresponds superficially with hierarchic assumptions: major weapon systems are developed exclusively in the Soviet Union while East European military industries tend to concentrate on less sophisticated nonlethal support equipment. But Moscow’s plans to establish a WTO-wide articulated division of labor in arms production have failed. Soviet efforts to orchestrate East European arms production have not met with success because the East European countries cannot be forced to manufacture what they do not wish to. Furthermore, Moscow cannot end East European projects simply because they are obsolete, redundant, or worrisome; its allies seek to maximize the competence and versatility of their own military industries and thus consistently prefer their own to Soviet designs. Moscow has not been able to direct East European military industries through mere fiat. The most effective tools of influence have been selective expansion of East European capabilities, offers of new production technology, and purchases of East European products. The crude hierarchy in WTO arms production that the Soviet Union has achieved comes from its success in convincing its allies that this is in their best economic and industrial interests. What hierarchy there is results principally from bargaining processes.

The East European countries’ capabilities in manufacturing aircraft illustrate the problems this can create for their international marketability. Like many Third

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World arms producers—such as Argentina, Brazil, Egypt, and Indonesia—Eastern Europe’s most sophisticated products are subsonic jet trainers and twin-engine transports. Other newly industrializing countries—including India, Israel, South Korea, and Taiwan—are coproducing or developing supersonic fighters and munitions more advanced than any East European product. But Eastern Europe’s aircraft, like its other military systems, are losing not their competitiveness but their very place in the international market. Unable to sell its products on the basis of their quality, Eastern Europe must depend on political arrangements with Moscow for sales to Soviet clients in the Third World. (For recent analyses of the new Third World arms industries, see Miller, 1980; Ross, 1981; Neuman, 1984a, 1984b.)

The marketability of East European arms depends not only on Soviet policy or local priorities but also on the pace of global military modernization. East European arms transfers as a proportion of global totals have peaked twice: once in the 19508, when Soviet licenses gave East European military industries near state-of-the-art technology; and then in the 1960s, when indigenous East European programs were at their height. In both instances, what made them internationally competitive was the sophistication and range of the East European countries’ own arms production.

These problems are not restricted to major weapon systems. North Korea, for example, has been aggressively marketing its artillery, small arms, and ammunition, all based on Soviet designs; China has received no Soviet military technology since 1962, but it has repeatedly demonstrated its willingness to share what it has. If these and other LDC-produced arms incorporate technology more “appropriate” for use in other LDCs, and if sales of these therefore rise, then the global arms market could gradually become segmented into two world markets for military goods: one for smaller, less sophisticated arms, for which production technology is more often transferred and in which greater competition might therefore be anticipated, perhaps thus resulting in higher demand as well; and another market for more sophisticated arms, for which production technology is less often transferred and in which we would consequently expect lower competition. If such an evolution of the world market were to occur, then the smaller, technologically advanced arms exporters (such as France and Sweden) could, like the East European countries, find themselves squeezed out by decreased demand in the high-technology market and increased competition in the low-technology market.

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[Authors’ note, p. 273: Robert M. Cutler acknowledges the support of the Scientific Research Council, University of Nantes (France), which facilitated the collaboration without which this article would not have been written. Laure Despres acknowledges the assistance of Robert Tartarin, Thomas Ohlson, and Michael Brzoska; the welcome of the International Institute for Strategic Studies and the Stockholm International Peace Research Institute; and the support of the National Center for Scientific Research (Paris), the Economic and Social Science Council (London), and the Swedish Council for Research in Social and Human Sciences (Stockholm). This article is revised from a paper presented to the Research Committee on the Evolving International Economic Order of the International Political Science Association, at IPSA’s XIIIth World Congress held in Paris in July 1985.]

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