The Political Economy of Aerospace Industries

The Political Economy of Aerospace Industries

A Key Driver of Growth and International Competitiveness?

Keith Hartley

The Political Economy of Aerospace Industries will appeal to undergraduate and graduate students in industrial and defence economics, public choice and policy courses. It will also be of interest to researchers, policy-makers and those involved in the industry in various different capacities.

Chapter 13: International collaboration: the reality

Keith Hartley

Subjects: economics and finance, industrial economics, political economy, public choice theory, politics and public policy, political economy, public choice


Collaboration has been a distinctive feature of European defence industrial policy. Other components of this policy embrace the Single European Market and the European Defence and Technological Industrial Base (EDTIB). This chapter adopts a project case study approach to analyse international collaboration. Three military aircraft projects are analysed, namely, the collaborative Typhoon which is compared with two European national programmes consisting of the Swedish Gripen and the French Rafale. Comparisons are also made with rival US combat aircraft and with the collaborative civil aerospace projects of the Airbus Group (formerly EADS). The three aircraft case studies reflect different procurement options embracing international collaboration and national independence. Other procurement policy options include the import of foreign equipment and the licensed production of a foreign-designed aircraft. Each procurement option involves different costs and benefits (see Chapters 11 and 12). Overall, the various procurement options can be viewed as choices about military requirements and work shares. A national project can be designed to meet a nation’s specific military requirements whilst appearing to offer some 100 per cent of the work to the national defence industry. In contrast, importing means accepting a foreign-designed aircraft where the foreign supplier obtains all the work share. The remaining procurement options offer combinations of work share and equipment designed to meet national military requirements (Hartley, 2012). The three aircraft case studies are analysed using a cost–benefit approach. Costs include acquisition and operational costs over the project’s life-cycle.

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