Defence procurement as an industrial policy tool: the Spanish experience

The procurement of military systems may be used as a tool to achieve industrial objectives. Medium-sized industrialised countries have the choice of procuring foreign systems on the best economic terms available, or instead using defence procurement as a tool to build up domestic industrial and technological capabilities. The Spanish experience illustrates the difficulties in moving from a procurement approach that only occasionally considered industrial policy issues, to procedures that systematically attempted to use defence procurement to support domestic industries. The problems that emerged suggest the limits to using defence procurement as an industrial policy tool, and provide an indication of the range of feasible objectives attainable by the defence procurement policies of a middle-sized, industrialised country.