The Sahel has become the epicenter of global terrorism, accounting for half of all terrorism-related fatalities by 2024. Jihadist groups pursuing system-transforming agendas have expanded across the region by aligning with local militant actors and building durable insurgencies. Their growth has disrupted longstanding security relationships between Sahelian governments and France, the United States, and the United Kingdom, with many of these new states reorienting and seeking security support from Russia. This study develops a game-theoretic model to explain why jihadist expansion has strained traditional Western partnerships and encouraged governments to seek Russian assistance. We also present an alternative model demonstrating how negotiated settlements can reduce jihadist appeal and limit external rival influence. We show that jihadist groups enhance local militants' capabilities, reducing prospects for negotiated settlements with host states. At the same time, jihadist intervention increases the political and military costs borne by Western partners, weakening their capacity to sustain long-term security commitments. These dynamics create opportunities for Russia to expand its influence by offering security services through mercenary forces that profit from ongoing conflict. We conclude that arming host states is likely to prolong conflict, whereas negotiation and peace aid can isolate jihadist groups and promote a more stable peace.
New defense is reshaping the traditional boundaries of the sector. By delivering critical technologies for modern warfare these New defense actors are becoming central to Europe's strategic autonomy. Yet, they remain for now overlooked in defense industry literature. This article pursues two objectives: first, to define New defense companies in contrast to the traditional defense industrial base (DIB); and second, to provide a preliminary statistical analysis showing how these firms are redefining the structure of the defense industry in Europe. Our findings indicate that New defense is not driven by new entrants alone, but by a diverse ecosystem that includes both small firms and established actors. Instead of being truly disruptive, current market dynamics are largely complementary: new entrants typically position themselves in strategic yet relatively narrow niches with strong growth potential, while incumbents incorporate them through acquisitions or partnerships. We further demonstrate that the new defense ecosystem extends beyond a simple opposition between startups and large firms, encompassing also the strategic repositioning of established SMEs. Recognizing these complementarities, alongside existing structural rigidities, may pave the way for a renewed approach to defense industrial policy.
There is a widespread perception that terrorism has increased over the last two decades, and common data on terrorism appear to back this up. This raises questions about the relationship between terrorist tactics and other types of political violence. Some argue we see a transformation of political violence, where indirect targeting through attacks on civilians replace conventional civil conflict where non-state actors directly target the state and security forces. We examine the relationship between terrorism and civil war in terms of potential substitution or complementarity between tactics, moving from trends in aggregate data over time to disaggregated analyses focusing on specific non-state actors and relative allocation of direct and indirect targeting. We find little evidence consistent with strict substitution, or growth in indirect attacks in countries outside episodes of civil war, but more evidence consistent with growing complementarity between terrorism and civil war, with increased use of terrorist attacks within civil wars over the period where terrorism appears to have increased. We examine whether increased use of terrorism in civil war coincides with observable changes in the characteristics of ongoing civil wars, and find increasingly asymmetric conflicts where rebels may benefit more from carrying out terrorist attacks.
In the United States and Europe, the private sector plays a pivotal role in cyber defense. In China, this role is less clear, due to the 'socialist market economy' system implemented in the country. Under the 'Military-Civil Fusion Development Strategy', the party-state has been promoting integration between the military-industrial complex and the civilian sector. Yet, the specific role that the private sector is assigned within the strategy's 'civilian side' remains unclear. By presenting an analysis of the specialized Chinese journal Civil-Military Integration on Cyberspace, the paper reveals a complex (and largely unresolved) relationship between China's party-state and the private sector.
While UNPKOs' effectiveness on health outputs in host countries has been extensively investigated, their impact on health inputs-health expenditures - has been overlooked. We explore the effectiveness of UNPKOs on health inputs and argue that UNPKOs influence the host state's decision on resource allocation through healthcare promotion-related mandates, which address cross-sectoral trade-offs, induce external funding, and enhance efficiency. Using African countries that experienced civil wars from 2001 to 2013, the empirical analysis shows that UNPKOs increase expenditures through the humanitarian relief and public health mandate, supporting the external channel mechanism. Our additional analysis shows that bureaucratic capacity enhancement through state authority mandates is a promising mechanism, although it is insufficient to influence health expenditures.
Does the national security state reshape the geography of innovation in ways that markets cannot? While the U.S. is often portrayed as a paradigm of market-driven development, this study argues that the spatial allocation of defense contracts functions as a potent, albeit 'invisible,' industrial policy that fundamentally alters regional technological trajectories. Utilizing a comprehensive dataset of U.S. defense contracts (1985-2020) and applying the Knowledge Complexity Index (KCI), we analyze how state-directed resources impact regional innovation through two major policy shocks: the 1986 FAR restructuring and the post-2001 defense industrial base initiative. Our findings reveal that defense-led development is highly spatially selective: while it significantly enhances the knowledge complexity of established hubs, it risks 'crowding out' innovation in regions with low initial absorptive capacity. By tracing these effects, this article contributes to the International Political Economy (IPE) literature on the 'geoeconomic turn,' suggesting that the modern state-market relationship is increasingly mediated through geopolitically driven spatial interventions.
This article examines how deteriorating global security conditions after 2014 and 2022 affected the revenue development and related economic indicators of the Czech defence industry. Using financial data from 18 companies for the period 2014-2023, the study applies a production-function framework combined with descriptive, correlation, and trend analyses to test whether employment, assets, and revenues grew consistently under rising defence demand. The results show that while aggregate indicators increased, company-level developments were uneven, cyclical, and strongly shaped by structural constraints and volatility of state procurement. These findings call into question the conventional assumption that worsening security automatically generates continuous industrial expansion. By linking theoretical concepts from defence economics with detailed company-level evidence, the study provides the first comprehensive assessment of how a small open economy translates external security shocks into industrial performance, offering new insight for both policy and comparative research in the field of defence economics.
This paper examines a common omission in terrorism risk assessments - the element of psychological terror. By employing Disability-Adjusted Life Years (DALYs), I estimate the psychological effects of terrorist attacks across a range of plausible scenarios. The findings reveal that physical harm is only the tip of the iceberg, with psychological harms representing between 85% and 99% of human harms of terrorism. Moreover, the majority of harms are felt not by the victims of the attack but are felt by the public at large. The importance of psychological harms challenges the validity of any risk assessment or program evaluation that fails to include them. This finding calls for a paradigm shift in counterterrorism strategies; instead of the traditional focus on combating terrorists with physical security measures, this research advocates for combating terror itself by addressing the fear, anger, and despair it causes.
Taiwan's security has attracted international attention in recent years, yet little attention has been devoted to Taiwan's counterintuitive defense spending. While confronting a rising Mainland China, Taiwan has been cutting military spending since the early 1990s. We propose a novel argument that trade drives Taiwan's defense spending. Since Mainland China often interprets an increase in Taiwan's military spending as a signal towards independence, the fear of losing the benefits from cross-Strait trade makes the Taiwanese government reluctant to raise defense spending. To empirically assess our argument, we conduct a comparative study of competing hypotheses at the aggregate level and a survey experiment at the individual level. The findings uniformly demonstrate that trade with Mainland China reduces Taiwan's defense spending. Meanwhile, the common belief that Taiwan's military spending is driven by the U.S.-China rivalry receives no empirical support.
The threat posed by the war in Ukraine and the shift in the U.S. administration's stance toward the European Union compel member states to cooperate in the armaments industry through co-production and co-development projects. This makes the present study particularly valuable for understanding the current state of the defence sector within EU member states. Our study examines the situation of the armaments industry across EU member states, focusing specifically on intersectoral relationships and their multiplier effect on the economy. This approach enables us to assess the state of the defence sector and anticipate worst-case scenarios arising from the ongoing conflict in neighboring territories. Furthermore, it allows us to identify potential capability gaps within the defence sector. To conduct this analysis, we employ a multisectoral and multinational modeling framework based on the input - output methodology, which enables the disaggregation of the armaments sector into its constituent subsectors, thereby facilitating the examination of income flows associated with this industry. The results obtained provide an in-depth understanding of both the weight of the armaments industry in the domestic economy of each EU member state and the impact of this sector on other economies through trade exchanges.
This study examines the impact of two recent political events - the U.S. presidential election result of November 2024 and the Donald Trump - Volodymyr Zelenskyy meeting of February 2025-on the European defence sector. Using event study methodology and the constituent stocks of a recently launched European defence exchange-traded fund (ETF), we find significant positive abnormal returns both before and after these events. Notably, cumulative average abnormal returns (CAARs) reached 5%-6% over the four trading days immediately following the election result announcement and 16%-18% over the same window after the Trump - Zelenskyy meeting. The results suggest that both events sent strong signals to market participants about potential increases in European defence firms' revenues. These signals may arise from increased market expectations of European countries' defence spending, triggered by the abrupt changes in U.S. foreign policy indicated by these events. Our findings have important implications for investors and policymakers.1
This study uses the recent Red Sea crisis to assess the collateral trade costs of militarized conflict. Using monthly trade data, we show that attacks by Iran-backed Houthis triggered a sharp decline in flows typically routed through the Suez Canal, with larger losses among country pairs reliant on this route. However, this divergence was short-lived, as trade among these dyads rebounded within months. Despite one of the most significant disruptions to maritime transport in decades, countries maintained trade with their first-best partners. We attribute this resilience to the shipping industry's adaptability. These findings speak to debates on wartime substitution and 'trade through globalization': features of the shipping sector - one of the most globalized industries - enhance countries' ability to mitigate trade disruptions. As a result, the deterrent effect of trade disruptions, emphasized in liberal theories, may be weaker in a still-globalized system.
Armed conflicts are widely acknowledged as significant obstacles to economic stability and growth. This study analyzes how African countries recover economically after internal conflicts, focusing on endogeneity issues related to reverse causality. We use the entropy balancing method and find evidence of an economic catch-up effect in the post-conflict period. The analysis of transmission channels reveals that increased investment, consumption, and trade are the primary drivers of post-conflict economic recovery. The cumulative impact of growth is estimated at 2 percentage points in the first year, increasing only slightly to 2.5 percentage points by the fifth year. This modest 0.5 percentage point increase over five years indicates that post-conflict growth remains volatile and unsustainable, reflecting the persistent effects of conflict. We perform a series of robustness checks to validate our results, ensuring the consistency and reliability of our estimates across various specifications.
This study empirically examines the structural transformation of the global arms trade through a network analysis disaggregated by weapon type. Prior research has largely focused on aggregate transfer volumes, overlooking structural variations across weapon systems. To address this gap, the present study analyzes networks for six weapon categories - aircraft, ships, missiles, sensors, artillery, and air defense - and traces the evolving roles of central actors. The results show that during the Cold War the United States and Soviet Union dominated a bipolar structure, whereas the post - Cold War era has witnessed the rise of Germany, France, China, Israel, Sweden, South Korea, and the United Arab Emirates as influential players in specific markets, indicating a transition toward multipolarity. The analysis further reveals that China has partially assumed Russia's role in sectors such as sensors and artillery, while the United States has ceded ship trade leadership to European states, most notably France and Germany. These findings demonstrate that disaggregation by weapon type uncovers distinct trade patterns and clarifies how leading suppliers shift across systems. Overall, the study underscores the importance of a network-based, weapon-specific approach for understanding the evolving structure of the global arms trade.
We examine the patterns of lethal socio-political violence in the United States during the period between 1930 and 2025 and estimate their impact on income growth. The predominant type of violence shifted from riots to terrorism over time. Whereas such incidents were heavily concentrated in the south before the 1960s, they spread to all regions by the twenty-first century. Using improved data measurement and applying a difference-in-differences approach designed for multiple types of events, we find that overall socio-political violence had a significant adverse effect on the growth of personal incomes.
Public concerns about Europe's dependence on the United States military industrial base have increased with the worsening security situation in Europe and the deterioration of the transatlantic relationship. With a new dataset covering all US Foreign Military Sales notifications since 2008, of Ukraine, increasing its reliance on US military equipment, we show that Europe has substantially increased its purchases from the US defence industrial base since the start of Russia's full-scale invasion. The dependence is particularly significant for specific high-tech equipment, including air defence, missiles and fighter jets, and for additional equipment and services included in purchases, such as advanced software and sustainment and modernisation required in future years. This strategic reliance on the US has provided benefits as weapons are effective. Yet, it creates significant dependencies. Even if the probability of the US using the dependence to its advantage was considered to be low, the high costs of security vulnerabilities provide the US with significant bargaining leverage over Europe in other policy areas such as trade. Moreover, the US military industrial base faces its own constraints and current and future US administrations might prioritise deliveries to Asia, which renders US suppliers more uncertain. We discuss the resulting policy trade-offs.
The war in Ukraine has reshaped the European defence market, triggering a surge in procurement that has created unprecedented pressure on defence supply chains. Historically structured around small-batch, cost-efficient production optimised for predictable peacetime demand, the European defence industry now faces the dual challenge of meeting urgent short-term operational needs while sustaining long-term technological and industrial capability. This study examines how this post-2022 procurement surge has affected the supply chains of the defence industry in Sweden, a sector characterised by private ownership, an international customer base. Drawing on 45 semi-structured interviews conducted in 2022 and 2024 with senior representatives from four major defence firms, the Swedish Defence Materiel Administration, and the Swedish Armed Forces, the study employs an abductive approach and thematic content analysis to identify key shifts in procurement practices and supply chain dynamics. The findings reveal mounting production bottlenecks, extended lead times, and intensified dependence on subcontractors, alongside emerging, but still largely informal, customer expectations regarding security of supply in the absence of binding contractual conditions. The study contributes to theory by demonstrating how procurement dynamics shape supply chain resilience in monopsonistic markets and highlights the need for new contractual mechanisms to balance peacetime efficiency with wartime scalability.
