Transaction Costs in International Armaments Cooperation

The aim of this paper is to examine and provide new evidence on changes in the costs and other determinants of economic rationality of international sharing of armaments projects. Based on current transaction costs theory, it defines individual and collective transaction costs of a weapon systems club. Using results of questionnaire survey, gathering expectations of international expert armaments community, there are analysed relations anticipated among those determinants, which are decisive for the amount of project costs. Results of these analyses indicate general anticipation of decreased total project costs in case of international sharing of armaments projects, along with increased project transparency, which can be viewed as one of the generators of decreased total costs. Transaction costs have indicated an unchanged level or a moderate decrease. Their individual component is to decrease. On the other hand, collective transaction costs are to grow, however, up to the extent of the decrease of individual transaction costs.