Prix d’économie de la Défense 2017 : retour sur les travaux des lauréats

Prix annuel d’économie de la Défense

Le prix annuel d’économie de la Défense du ministère des Armées récompense une thèse, la présentation de travaux scientifiques originaux ou un mémoire universitaire de deuxième ou de troisième cycle pour sa qualité, son originalité et son intérêt vis-à-vis du domaine de l’économie de la défense.

En 2015, Josselin DROFF, chercheur a la Chaire économie de Défense était lauréat du prix pour sa thèse intitulée: “Le facteur spatial en Économie de la Défense: application au Maintien en Condition Opérationnelle (MCO) des matériels de Défense“.

Cette année, deux prix ont été remis le vendredi 5 octobre 2018. Le prix de thèse est attribué à Antoine PIETRI (IRSEM – Paris 1) pour son travail de thèse sur la modélisation des conflits et le prix du Mémoire université est attribué à Oishee KUNDU (Science Po Paris – Manchester Business School) pour ses travaux sur les enjeux opérationnels, stratégiques et économiques concernant les programmes d’armement en Inde.

Remise du prix d’économie de la défense, 5 octobre 2018 à Balard, Ministère des Armées avec de gauche à droite: Oishee Kundu (Sce Po Paris, Manchester Business School), François Devoucoux Du Buysson (DAF), Christophe Mauriet (DAF) et Antoine Pietri (IRSEM)

Prix de thèse: Antoine PIETRI

En décembre 2016, Antoine Pietri a soutenu sa thèse intitulée « La théorie économique des conflits à la lumière de la ‘Contest Theory’ » au Centre d’Économie de la Sorbonne (CES), Université Paris 1 Panthéon-Sorbonne. Cette thèse a été réalisée sous la direction de Mehrdad Vahabi et Claude Ménard.

Sa thèse est composée de quatre articles de recherche traitant de la manière dont la théorie économique prend en considération les conflits, l’appropriation et la violence. Dans cette thèse, le cadre théorique mobilisé est celui de la ‘Contest Theory’ qui appréhende l’appropriation par un « arbitrage beurre-canon ». En d’autres termes, un individu – ou un pays – dispose de ressources limitées qu’il peut utiliser à des fins appropriatives (‘canons’) ou à des fins productive (‘beurre’).

  • Le premier article explore les tenants et les aboutissants de ce cadre théorique pour l’analyse économique des conflits.
  • Le second article traite de l’expansion territoriale des empires. Il montre que plus la population d’un territoire dispose d’actifs aisément redéployables, plus les empires marchands s’imposent territorialement sur les autres formes d’empires.
  • Le troisième article (non publié) s’intéresse aux motivations pouvant expliquer le commerce d’armes entre deux pays ennemis. Le principal résultat est que si le vendeur dispose à la fois d’une avance technologique militaire et civile par rapport à l’acheteur, le commerce d’armes peut s’avérer mutuellement avantageux, et cela même si les pays sont ennemis.
  • Dans le quatrième article, l’auteur propose d’utiliser le monde virtuel pour étudier la formation de la probabilité de victoire sur un champ de bataille. En exploitant une base de données originale issue du jeux vidéo EVE Online, il apparaît que le meilleur moyen d’appréhender la probabilité de victoire dans un conflit est d’étudier la différence relative des forces engagées (et non le ratio ou la différence absolue).

Antoine Pietri est maintenant chercheur à l’Institut de Recherche Stratégique de l’École Militaire (IRSEM) et continue son travail d’opérationnalisation de ses recherches.

Prix de Mémoire: Oishee KUNDU

Title: The Challenges of Defence Procurement in India in the 21st Century

Author: Oishee Kundu (Sciences Po, Paris), Supervisor: Jean-Michel Oudot,

Economic analysis of defence procurement is necessary because, like all public procurement activities, it faces agency problems and transaction costs. The identification of challenges in defence procurement can be used to control the impact of risks on operational, strategic and economic objectives of nation-states.

In the 21st century, the globalisation of defence industries and the increased private sector participation is changing market conditions and procurement choices. Additionally, warfare practices and strategies have changed, which has also changed procurement practices.

The motivation of this research is to identify defence procurement challenges in India in the 21st century– a country that is increasingly becoming important as a buyer of weapons, is making new industrial and technological choices, has pressing operational needs due to its territorial disputes with Pakistan and China, and continues to balance these against an unfulfilled developmental agenda.

Existing literature and gaps

The theoretical framework for studying defence procurement challenges have been the agency theory, which assumes self-interested rational agents whose actions are a reaction to incentives, or transaction cost economics, which assumes opportunistic behaviour by agents in contracts that are associated with high degrees of uncertainty.

These theories are incorporated with empirical methods like benchmarking and risk analysis to identify the challenges that can occur at different stages of procurement, and the risks can be broadly classified as technological (relating to technical complexity, research and development), contractual (the negotiation and enforcement of contracts, organisational (relating to procedures and organisational structures, and institutional (political climate, market environment).

There is a systemic gap in the literature on Indian defence procurement challenges in terms of methodology and there is much to be gained through a quantitative determination of the probability and impact of risks. The methodology of risk analysis, which has been used in US, UK and France to identify procurement problems, has not taken place in India so far.

Research question and methodology

The research question aims at identifying the challenges of timely procurement in Indian defence, since non-adherence to stipulated timelines has economic, operational and strategic implications.

The methodology of risk analysis has been introduced in this context- risk analysis starts with objectives and creates corresponding parameters on which one can obtain statistics to quantify performance and use the dataset so created to identify challenges and their impact.

Here, the performance parameter is schedule performance, calculated as delay, which is the excess time taken expressed as a percentage of stipulated time.

The unit of analysis is a contractual activity, and details on 90 such contracts could be obtained from the defence audit reports published by the office of the Comptroller and Auditor General of India. This original dataset forms the basis of the study and while it is not a random sample of Indian defence contracts (the publicly available defence audit only publishes information on contracts that displayed deviations), it covers the range of procurement activities and includes both domestic and foreign agents with whom the Ministry of Defence enters into a contract.

53 interviews were further conducted in India to substantiate the findings, appreciate the complexity and nuances, cross-check points of view, ideas and conclusions, and gain the stakeholder perspective. The interviews were conducted with a questionnaire that contained both open-ended and closed questions. The interview respondents were identified on the basis of their involvement in an executive capacity (government or industrial) in defence procurement in recent years and through snowball sampling.

Findings

The findings display a high probability of technological risk, followed by contractual risks. Contractual risks are also the cause in contracts displaying excessive delays (greater than 300%). Technological risks are concentrated in cases of indigenous procurement while contractual risks mostly occur in contracts where the Ministry of Defence has to deal with agents outside its own organisation- foreign suppliers and Indian private companies. This indicates frictions and transaction costs.

Contractual risks are relatively more important because of their probability and impact, measured as the average delay caused by the risk. They are also mostly found in the contracts of the Indian Army, the most pro-active military service in India, and thus assume greater importance from the operational perspective.

A deeper discussion of technological risks shows that most of them (13 of 31 cases) are due to lack of infrastructure, and in the case of contractual risks occurred during production and delivery phase (22 of 28 cases), i.e. ex post, hinting at opportunism and reaffirming the behavioural assumption of opportunism in transaction cost economics.

Conclusions

Technological risks in indigenous production need to be recognised, especially in light of the current government’s flagship ‘Make in India’ initiative- a set of policies that favours manufacturing in India. However, such an endeavour will be limited in success if infrastructure needs are not addressed.

Additionally, the transaction costs that the Ministry of Defence is incurring with foreign suppliers and even Indian private companies is of special concern given India’s dubious distinction of being the largest arms importer in the world.

The policy implication of this study for improving schedule performance in Indian defence procurement would be to build infrastructure and skills in research and contracting. Beyond that, this study shows, like others which have used risk analysis, that the methodology can give new insights into the discussion of procurement challenges, and at odds with stakeholder perceptions.

 

NB: Une présentation plus détaillée des travaux des deux auteurs est disponible au lien suivant: Ecodef n°106, OED

 

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