ABSTRACT
Introduction Governments have long sought ways to reduce the costs of weapon systems development and production. European countries have a long tradition of establishing collaborative programs. Examples include the 1957 Atlantic program to replace the Lockheed Neptune Anti-Submarine Warfare patrol aircraft and the 1959 Transall C160 medium sized transport aircraft. More recent examples of international co-development programs in Europe include the NH90 helicopter program, the Tiger attack helicopter program, the Eurofighter Typhoon program, and the A400M Military Transport Aircraft. The general logic behind collaboration is straightforward: sharing research and development costs with more partners and lowering unit costs as a result of larger production volumes. However, many collaborative programs have generally not excelled in economic efficiency so far. Security and national economic issues led to programs being established on the bases of elaborate work sharing arrangements, thereby increasing coordination problems and the duplication of activities over countries. Under the current circumstances – increasing costs of weapon systems and strained defense budgets – these arrangements have become unsustainable. Governments in Europe have increasingly tried to raise competition in the defense industry. Many governments have implemented new procurement policies and reduced export restrictions. They have facilitated industrial restructuring and participated in international development programs. Many European countries have privatized large parts of their industrial defense bases. In Europe, new institutional arrangements between governments have emerged, among which is the European Defence Agency (EDA). On the industrial side, the 1990s witnessed a large scale restructuring in the aerospace and industrial defense bases in both the United States and Europe. In the United States, Lockheed and Martin-Marietta merged to become the world’s second largest aerospace and defense giant, and McDonnell Douglas merged with Boeing in 1997, soon after it lost in the design competition for the future joint strike fighter program in which it competed against Boeing and Lockheed Martin.
