"Stay Competitive!" the French Defense Industry and the National Interest
“Stay Competitive!”
The French Defense Industry and the National Interest
Alina SURUBARU
Associate Professor, University of Bordeaux (France)
Proposal for the mini-conference
“Building Bridges between Economic Sociology and International Relations”
The production and distribution of war weapons is traditionally seen as an act of sovereignty of Nation-States, which supports their international policy, i.e. their relations to other States. Yet, the defense industry has become increasingly liberalized over the last decades, defense firms being encouraged to market incentives, especially at international level. This paper explores this paradox of a key attribute of sovereignty becoming a market, and thus proposes to articulate economic sociology and international relations. It shows that international weapon transactions, while becoming increasingly competitive, are always associated with political deals between States, but also that State diplomacy becomes increasingly shaped by sales performance.
This topic is particularly challenging for the economic sociology. Indeed, economic sociology usually studies the construction of markets within a particular political entity, where market space and political authority basically coincide and overlap. Typically, economic sociology studies the construction of a domestic market for a particular commodity, and the way in which this contributes to the achievement, the integration of a national economy (Granovetter & McGuire, 1998; Berk, 1994). Or, at supra-national level, it shows how the achievement of the European single market contributed to European integration (Fligstein & Mérand, 2002). In the case of international war weapons market, we witness market exchanges without political integration, and through heterogeneous political and regulatory spaces. Furthermore, while this is a common feature of export markets, in the case of the defense industry, transactions remain under political control, on both sides. How can economic sociology address this kind of configuration? This, obviously, goes far beyond the conventional process of market building through standard setting. How do economic transactions unfold, when they have to fit the strategic interest of States? How does economic rationality articulate with political rationality?
To explore this complex market exchange situation, the French defense industry provides some interesting insights. Since the end of the Cold War, the management of the French defense acquisition projects is experiencing constant criticism from the political authorities (Hébert & Pascallon, 2000). In a White Paper published in 1994, the French government asked for the first time to the national authority in charged with the defense acquisitions projects (Direction générale de l’armement – DGA) to reduce costs in this sector and to adopt a market-oriented approach, like “any other industrial organization” (Long, Balladur, Léotard, 1994). This White Paper also explicitly demanded to the French defense firms to become more "competitive" on the international market, in order to anticipate a massive reduction of the domestic public procurements.
Twenty-five years later, the management of the French defense acquisition projects is still criticized, because it is not fully “market-oriented”. However, many experts are also convinced that the French defense industry underwent dramatic changes since the beginning of the 1990’s, precisely because of the new competitiveness issue (Joana & Smith, 2006; Hoeffler, 2008; Irondelle, 2011). What is the sense of this debate? What does liberalization exactly mean, both for the government and for the defense industry? Is there any possible compromise between the French “national interest” and the “private commercial interests”?
The qualitative survey that I conduct in this field since 2013 confirms the idea that economic actors faced tremendous challenges in the late 1990s. On the one hand, they continued to be (directly or indirectly) State-controlled, and on the other hand, they had to adapt to a competitive type of client relations on export markets. Furthermore, international market relations were constantly under political constraint, and deals threatened by government interference. In my presentation, I will compare two international negotiation cases (witch involved French firms) and I will show how these economic actors mobilized theirs personal connections in order to “stay competitive”.
References
Berk, G., 1994, Alternative Tracks: The Constitution of American Industrial Order, 1865-1916, The Johns Hopkins Series in Constitutional Thought.
Fligstein N., Mérand, F., 2002, “Globalization or Europeanization? Evidence on the European Economy Since 1980”, Acta Sociologica, March, vol. 45, pp. 7-22.
Granovetter M., McGuire P., 1998, “The Making of an Industry: Electricity in the United States”, in Callon M. (dir.), The Laws of the Markets, Oxford, Blackwell, pp. 147-173.
Hébert J.-P., Pascallon P., (ed.), 2010, La politique industrielle d'armement et de défense de la Ve République - Évolution, bilan et perspectives, Paris, L’Harmattan.
Hoeffler C., 2008, “Changement des politiques nationales d'acquisition d'armement et coopération européenne”, Politique européenne, n° 26, pp. 211-220.
Irondelle B., 2011, “Qui contrôle le nerf de la guerre ? Financement et politique de la defense”, in Bezès P., Siné A. (ed.), Gouverner (par) les finances publiques, Paris, Presses de Sciences Po, pp. 491-523.
Joana J., Smith A., 2006, “Changing French Military Procurement Policy: The State, Industry and ‘Europe’ in the case of the A400M”, West European Politics, 29 (1), pp. 70-89.
Long M., Balladur É., Léotard F., 1994, Livre blanc sur la défense, Paris, La Documentation française, Collection des rapports officiels.