Competition in Defence Practice

Abstract

This chapter compares theory about the consequences of competition with market structures and procurement experiences in the defence sector. The arguments are largely theoretical, reflecting commercial logic and propositions about behaviour in highly imperfect market structures. They are meant to illuminate what can happen, and sometimes does occur, rather than what must result. A crucial theoretical question is how competition is likely to work when there is only one immediate customer (and only a few possible customers in the longer run) and only a small number of potential suppliers (for each of whom an order may be of strategic significance). However, the US and the UK have published empirical data on the use of competition in defence, and appropriate reference is made to this.