تجزیه و تحلیل تعادل عمومی در صادرات اسلحه به کشورهای در حال توسعه در حال جنگ

In this paper a conflict game between the two developing countries is constructed. It is assumed that weapons are imported at the fixed world price, pM, and the consequence of the decline of pM is examined, which happened when the former Soviet Union collapsed. In Section 2, specifying the utility and production functions in general equilibrium (GE) model by Cobb-Douglass type, we actually derive the reaction functions of GE conflict game. In Section 3, we examine the effect of the decline of pM on the “existence” of solution to the game, its “stability”, and finally on the utility levels of two countries in the “stability” case. By simulation we show that as pM falls, the number of “non-existence” cases increases, the percentage of “instability” cases among “existence” cases rises, and finally as pM falls, the percentage of “rising utility levels of two countries” cases among “stability” cases falls. In Section 4, assuming that the above countries have domestic military industries, we derive the reaction functions in this conflict game.

After the crumble of Berlin Wall in 1989 the Eastern Bloc began to disintegrate itself, resulting in the disappearance of USSR in 1991. On the one hand, the victory of Western Bloc forced the other bloc to reconstruct its economy through introduction of Market Mechanism. On the other hand, the defeat of the Eastern Bloc unleashed racial conflicts: e.g. the one in Yugoslavia. In 1992, Economists Allied For Arms Reduction (ECAAR) held a conference at Hague, to discuss the international security. In this conference, [3] attempted statistical examination of armament burden of developing countries, stressing Japanese light military burden as one of the main reasons for her post-war economic growth (see also [4]). Galbraith, an other leading participant at the conference, urged mainstream economists to incorporate military factors into the traditional civilian economic models, especially, the “arms trade to the poor countries of the planet: a trade that denies people the first essentials of survival and supports the most egredious of human slaughter” ([2], p. 9). According to him, “in the eight years from 1981 to 1989, the less developed countries (LDCs) acquired from various sources 37,000 surface-to-air missiles, 20,000 artillery pieces, 11,000 tanks and self-propelled howitzers, 3200 supersonic planes and 540 warships and submarines at a cost of $354.6 billion” (p. 11). The aim of this paper is to respond to the urging by Galbraith, by modifying [1].

We started with the assumption that there are two LDCs, whose armed forces consist of troops and imported weapons (from the advanced countries). Since these LDCs are small countries, it is assumed that weapons are imported at the fixed world price, pM. As the result of the Collapse of Communist Countries with redundant weaponry, pM may tend to decline. The consequence of the decline of pM was examined. Specifying the utility and production functions by Cobb-Douglass type, we actually derived the reaction functions of conflict game with modified definition of armed forces. It is revealed that they are non-linear, while in Fukiharu [1, Section III], they are linear. In Section 3 we examined the effect of the decline of pM. By constructing 10,000 games through random selection of parameters, we showed that as pM falls, the number of “non-existence” cases increases, the percentage of “instability” cases among “existence” cases rises, and finally as pM falls, the percentage of “rising utility levels of two countries” cases among “stability” cases falls. It must be noted, however, that by assumption our model in this paper omits the aspect of human loss by the invasion. (As shown in [5], it is difficult to evaluate human loss.) In this sense, our conclusion underestimates the negative effect of declining pM. It is well known that military industries do exist in LDCs. In Section 4 we modified the above model, such that the above LDCs have domestic military industries, and showed that the reaction functions in this conflict game have similar form as in the ones derived in Section 2. An other extension was attempted in this section; the defensive characteristic of armed force, as well as the offensive one, is incorporated, and similar conclusion on “stability” was derived.