The 2015 Defence Economics Dissertation Prize was awarded during the annual conference organised by the Defence Economics Chair at the University of Paris 1 Panthéon-Sorbonne, in partnership with the Ministry of Defence's Financial Affairs Directorate. «Defence industries and international challenges».
Defence Economics Thesis Prize 2015: Le facteur spatial en économie de la défense : application à l'organisation du Maintien en Condition Opérationnelle (MCO) des matériels de défense, Josselin Droff.
Josselin Droff's thesis demonstrates that understanding defence production choices (military mission accomplishment, equipment and personnel support) necessarily involves a strong spatial dimension. The thesis shows that understanding defence production choices The developments proposed by Josselin Droff provide a reference framework for anyone wishing to understand location choices in the defence sector. The proposed methodology can be applied not only to operational readiness but also to other dimensions of defence, for example in a bilateral or multinational context or within an alliance.
Summary of the thesis:
This thesis examines public policy choices relating to the spatial organisation of defence production as a public good. Our analytical framework makes it possible to integrate the spatial factor into the modelling of this production.How can space be integrated into defence economics? How does space structure the organisation of defence production? And conversely, how does defence production structure space?
Our work focuses on the case of France, and more specifically on the maintenance or Maintien en Condition Opérationnelle (MCO) of defence equipment. In France, according to the Direction Générale de l'Armement, MCO costs generally represent between 35 % and 50 % of the overall cost of owning equipment. In 2012, they represented around 15 % of the defence budget. Controlling these costs has been a major challenge since the 1990s. Over the period 2010-2014, these costs will increase by an average of 8.7 %. The aim of good MCO management is to maintain - or improve - the availability of defence equipment while reducing MCO costs. To this end, the spatial organisation of MCO is a key factor from both a static and a dynamic point of view, given the changes in both the format of armed forces and their equipment.
The thesis is organised into four chapters:
- The first chapter reviews the literature on the relationship between defence activities and the territories in which they take place.
- The second chapter examines the contemporary transformations of French defence in terms of doctrine, budget and the size of the armed forces, in order to identify the geographical consequences of these transformations.
- The third chapter looks at the evolution of defence equipment MCO since the end of the Cold War. More specifically, we look at equipment availability, changes in MCO costs and the reforms introduced by public decision-makers to improve MCO.
- The fourth chapter looks at the optimal spatial organisation of the MCO.
Our modelling shows that space can be an instrument for optimising defence equipment MCO costs. However, it remains a constraint that is difficult to overcome because of the existence of transport costs, but also and above all because of the very nature of defence activities. We therefore model a strategic constraint in the form of an operational social cost. This constraint takes into account the intrinsic specificities of military activities (e.g. availability of equipment, imposed strategic locations). It allows us to highlight and discuss the balance of forces that exists between agglomeration and dispersion in the production of MCO. The contribution of this thesis is to make it possible to integrate the spatial factor into the modelling of defence production. We defend the idea that the organisation of defence production cannot be understood by ignoring space. The optimisation of the defence effort is based on a spatial dimension inherent in the very concept of defence and the territory to be defended. Consequently, research into the optimality of the organisation of defence production can only be carried out within a framework of spatial analysis. This methodology can be applied to other dimensions of defence than MCO and in a multinational framework between two countries, several countries or within an alliance.
