The economics of disarmament and conversion

Disarmament involves reductions in Defense spending. The conversion challenge is to achieve a re-allocation of resources from the military to the civilian sectors of the economy. Questions arise as to whether disarmament and conversion raise special problems unique to the Defense sector. A starting point in any analysis requires a definition of the Defense industrial base. Disarmament is then analyzed as an investment process involving costs and benefits. The problems, costs and prospects for conversion involving both Defense industries and Armed Forces are analyzed and various policy options are reviewed.