The Rationale for Offsets in Defence Acquisition from a Theoretical Perspective

Abstract

Offsets are an economic development tool used to seek technology from foreign suppliers as part of an international sale of equipment. Although offsets practice has been in existence for long, offsets have only become increasingly popular in the past two decades; thus a vital component of defence acquisition for many governments around the world. Most scholarly work on offsets have not clearly addressed the theoretical underpinnings behind why offsets are required as part of defence acquisition. What is the rationale for offsets being incorporated as part of a defence acquisition? This paper addresses the rationale for offsets in defence acquisition from a theoretical perspective. The chapter defines offsets, discusses the role of offsets in defence acquisition, outlines costs and benefits of offsets and undertakes an in-depth discussion on the various theories on the rationale for offsets in defence acquisition. This chapter argues rationale for offsets as a discipline within the defence acquisition framework can be discussed on a solid theoretical framework.