F1IS 4470 - Defense Economics
F1IS 4470 · Spring semester 2025-2026
- Language of tuition
- English
- Course type
- Cours magistral
- Number of hours
- 24
- Credits
- 6
Information
Description
Defence Economics uses the tools of economics to analyse and understand defence policy choices and trade-offs.
As the world undergoes a major power transition and a return to inter-state wars and threats of war, defence budgets and cross-border arms transfers have greatly increased for many nations. At the same time, disruptive technologies such as AI are transforming not only civilian economies but also military affairs and defence industries. As states grapple with these challenges, they face trade-offs – from the overall budget allocation to defence to specific procurement or industrial support decisions – that require rational decision making. The discipline of economics was essentially designed to study choices in the face of complex sets of qualitative and quantitative data, and hence the field of Defence Economics provides a unique contribution to making sense of contemporary defence policy making.
Learning Outcomes
Define and analyze key theoretical concepts in defence economics
Understand the historical background and national specificities
Present recent empirical research
Build a critical understanding of major contemporary defence economic issues
Define and conduct literature-based research and construct a corpus of sources.
Professional Skills
Gain introductory understanding of major research questions in the field of defence economics and in the application of economics to broader international security issues
Acquire analytical thinking, and the ability to understand defence economics research articles from a qualitative and conceptual perspective
Learn to apply economic reasoning to understand defence policy questions
Prerequisites
Basic concepts in economics and statistics. Reminders will be given for each concept used.
Teaching format
Feedback on paper and presentation.
Assessment
Two formal exams in a supervised setting.
An interim exam that will test for basic skills based on the first 6 sessions (defence budget data; drivers of defence spending levels; patterns in the international arms trade), with multiple-choice questions.
A final exam that will test for a wider range of analytical skills, where students should demonstrate the ability to apply economic reasoning to complex defence policy problem statements.
The interim exam will account for 35% of the final grade.
The final exam will account for 65% of the final grade.
Exam conditions: Computer-based, but without access to the internet nor to any AI tools. Students would be allowed to bring in a single A4 sheet of paper containing printed or handwritten reminders of the material covered in the course. (E.g., how to interpret a table of statistical results; how to compute the effect of inflation; bullet point summaries of selected themes). Computer setup should allow students to use MS Excel or an equivalent application.
Workload
In Class Presence: 4 hours a week / 24 hours a semester
Online learning activities: /
Reading and Preparation for Class: 4 hours a week / 48 hours a semester
Research and Preparation for Group Work: 4 hours a week / 48 hours a semester
Research and Writing for Individual Assessments:
Readings
Main readings 5
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Christie, E. H., Buts, C., & Du Bois, C. (2023). Demand for Military Expenditures and Security Alignment Choices in the Indo-Pacific. Defence and Peace Economics, 34(5), 581-602
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Fiot,D. (2024), From liberalization to industrial policy: towards a geoeconomic turn in the European Defence Market? Journal of Common Market Studies, https://doi.org/10/1111/jcms.13600
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Harrison, M. (2023). Economic warfare: lessons from two world wars. CAGE working paper no. 679
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Malizard,J. (2020), Economic methods for defence studies, in D. Deschaux-Dutard (editor), Research methods in defence studies, pp. 151-69, Routledge: London & New York.
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Mueller, T. (2024), Drivers and Impact of European Defence Market Integration: A Literature Meta-Synthesis with Economic Focus, Defence and Peace Economics, DOI: 10.1080/10242694.2024.2396416.
Further readings 20
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Blanchard,J.M.F., Mansfield,E.D. & Ripsman,N.M. (1999), The political economy of national security: Economic statecraft, interdependence and international conflict, Security Studies, 9(1-2), 1-14.
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De Cock, C., Kegels, G., Buts, C. and Du Bois, C. (2023), Article 346(1) TFEU and Strategic Autonomy: A Possible Loophole to Grant State Aid in the Context of Geopolitical Struggles, European State Aid Law Quarterly, vol. 22(2), p. 150-160.
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Du Bois,C. (2024), Military Spending and the Burden Sharing Debate, In: Sookermany, A.M. (eds) Handbook of Military Sciences. Springer, Cham. https://doi.org/10.1007/978-3-030-02866-4_70-1
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Dunne, J. P., & Smith, R. P. (2020). Military expenditure, investment and growth. Defence and Peace Economics, 31(6), 601-614
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Dunne,J.P. and Smith,R.P. (2016), The evolution of concentration in the arms market, The Economics of Peace and Security Journal, vol 11(1, doi:10.05355/epsj.11.1.12
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EDA (2015). The Economic Case for Investing in Europe’s Defence Industry. Fact Sheet. European Defence Agency.
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Gorodnichenko, Y., Korhonen, I., & Ribakova, E. (Eds.). (2024). Russian Economy on War Footing: A New Reality Financed by Commodity Exports. Centre for Economic Policy Research (CEPR).
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Harrison, M. (2023). Economic warfare: lessons from two world wars. CAGE working paper no. 679
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Hartley, K. (2007), Defense economics: Achievements and challenges, Economics of Peace and Security Journal, EPS Publishing, vol. 2(1), pages 45-50, January.
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Hartley,K. (2023), The Future of the European Defense Firm, Economics of Peace and Security Journal. 2023;18(1):66-75.
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Mowery, David C., 2012. "Defense-related R&D as a model for “Grand Challenges” technology policies," Research Policy, Elsevier, vol. 41(10), pages 1703-1715
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NATO (2024). Defence Expenditure of NATO Countries (2014-2024). Online fact-sheet. Available
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Pamp, O., Lebacher, M., Thurner, P. W., & Ziegler, E. (2021). Explaining destinations and volumes of international arms transfers: A novel network Heckman selection model. European journal of political economy, 69, 102033
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Purza, S-A. (2023), Exploring Contractual and Normative Instruments for Collaborative Cross-Border Procurement in Defence and Security in the EU, European Procurement & Public Private Partnership Law Review, vol. 18(3), p. 195-208.
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Roberts, P. S., & Schmid, J. (2022). Government‐led innovation acceleration: Case studies of US federal government innovation and technology acceleration organizations. Review of Policy Research, 39(3), 353-378
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SIPRI (2024), Trends in international arms transfer, https://www.sipri.org/sites/default/files/2024-03/fs_2403_at_2023.pdf
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Smith,R. (2017), Military expenditure data: theoretical and empirical considerations, Defence and Peace Economics, 28(4), 422-428
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Stein,J.G. “Escalation Management in Ukraine: ‘Learning by Doing’ in Response to the ‘Threat That Leaves Something to Chance,’” Texas National Security Review 6, no. 3 (Summer 2023): 29–50.
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Tian,N., Lopes da Silva, D., Liang,X. and Scarazzato,L. (2024), Trends in world military expenditure, 2023, SIPRI Fact sheets. Available at: https://www.sipri.org/publications/2024/sipri-fact-sheets/trends-world-military-expenditure-2023
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Vlasiuk, V., Cooper, L., & Milakovsky, B. (2024). A state-led war economy in an open market: investigating state-market relations in Ukraine 2021-2023
Teaching units
| Unit no. | Unit type | Teaching units | Teachers | Number of hours | Credits |
|---|---|---|---|---|---|
| 58594 | Cours magistral | Defense Economics | Eva SZEGO, Edward CHRISTIE, Cindy DU BOIS, Caroline BUTS | 24 | 6 |
| 59627 | Teaching assistant | Defense Economics | Eva SZEGO | 16 | 0 |
Teachers
- Eva SZEGO
- Edward CHRISTIE
- Cindy DU BOIS
- Caroline BUTS
In the curricula
- Master in International Security - Spring 2026 (Semester 2) ÉCOLE DES AFFAIRES INTERNATIONALES (PSIA)
Contacts and resources
- Contact
- SOROOSH Homa