Cost Efficiency Implications of International Cooperation (Implications de rentabilite de la cooperation internationale)
Abstract
This report sets out to evaluate the cost efficiency implications of international military cooperation. Increased cooperation between the NATO Nations is seen as a possible means to reduce the consequences for operational ability of the ever increasing weapon system costs and the stagnating defence budgets. A taxonomy for analyzing cooperation initiatives is proposed based on a categorization of different forms of cooperation initiatives. This taxonomy structures the rest of the analysis. International cooperation entails both benefits and costs that can be economic, operational or political in nature. The economic benefits are mostly related to economies of scale, resulting from increases in scale when two or more countries combine their efforts. The economic costs are often labeled transaction costs, and will typically increase as the cooperation initiative includes more Nations. The political and operational factors are described in this report mainly as show stoppers or enablers. The trade-offs between cost savings on the one hand and possible political or operational disadvantages on the other hand are not made here, and are instead left for the politicians. A successful cooperation effort is selected and managed in order to maximize these benefits and minimize the costs. The report presents three case studies showing that large economic gains can be achieved through cooperation. The size of the gains that each nation can expect to see in a collaboration initiative depends on the chosen area and design of the collaboration.
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 2015
- Accession Number
- ADA627129
Entities
Organizations
- NATO Science and Technology Organization