Globalization of Arms Production and Hierarchical Market Economies: Explaining the Transformation of the South Korean Defense Industry

The global arms industry has experienced a major transformation in the post-Cold War era, with production becoming increasingly transnational and larger in scale. While many scholars and policymakers predicted the widespread adoption of market-enhancing reforms aimed at increasing domestic competition and attracting FDI, globalization of arms production has not led to a convergence of national defense industries into a liberal-market model. Drawing on the varieties of capitalism (VoC) literature, recent scholarship has demonstrated how an interdependent web of economic institutions has shaped each country’s response in varied ways. This paper builds on the VoC literature and argues that the hierarchical market economy (HME) as a distinct variety serves as a better model for understanding the trajectory of defense industries in many second-tier producers that do not fit the existing categories of VoC. We conduct an in-depth case study of South Korea’s defense-industry reform initiated in 2008 and the subsequent threefold increase in its arms exports. We show that the trajectory of South Korea’s defense-industry reform can be seen as the result of an HME’s attempt to adapt to the globalization of arms production in ways that preserve its distinct comparative advantage. As the HME model has broad applicability for many countries in Asia and Latin America, our findings have important implications for future developments in the global arms industry.

军火生产的全球化与等级制的市场经济：解读韩国军工产业的转型

关键词：军工产业，韩国，资本主义类型，等级制市场经济(HME)，全球化。

全球军工产业在冷战后经历了重大的转型，生产变得日益跨国化，规模也更为宏大。尽管很多学者和政策制定者预测到那些意在增强国内竞争并吸引外国直接投资的强化市场的改革会得到广泛实施，但军火生产的全球化并未导致各国军工产业向自由市场模型的趋同发展。近期的研究利用资本主义类型（VoC）文献展示出一个互相依赖的经济制度网络是如何塑造每个国家不同的应对方式的。本论文利用资本主义类型的文献，提出等级制的市场经济（HME）作为一种独有的类型，对于理解许多并不适用资本主义类型中现有类别的二线生产者的军工产业的发展轨迹来说，可以说是一个更好的模型。我们对于韩国自2008起发起的军工产业改革以及此后军火出口的三倍增长进行了深入的案例研究。我们表明韩国军工产业改革的轨迹可以被视为是等级制市场经济用保留其独特比较优势的方式来适应军工生产全球化的尝试。由于等级制市场经济模型适用于亚洲和拉丁美洲许多国家，我们的研究发现对于全球军工产业的未来发展具有重要的意义。

Translated by Li Guo