The Political Economy of Arms Export Restrictions: The Case of Japan

The export of arms belongs to the most contested issues in democracies. In this article, we examine the economic repercussions of the recent easing of the Japanese arms exports restrictions. We develop a rational expectations argument to understand why some political events increase the income of th...

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Bibliographic Details
Published in:Japanese Journal of Political Science Vol. 13; no. 3; pp. 419 - 439
Main Authors: TAGO, ATSUSHI, SCHNEIDER, GERALD
Format: Journal Article
Language:English
Published: Cambridge, UK Cambridge University Press 01.09.2012
Cambridge University Press (CUP)
Subjects:
Argumentation
Armament
Arms trade
Bans
Budgets
Case studies
Cold War
Defense industry
Democracy
Enterprises
Expectations
Exports
Exports and Imports
Income
info:eu-repo/classification/ddc/320
Investors
Japan
Military sales
Military technology
Pacifism
Political Development
Political Economy
Political factors
Political parties
Political science
Politics
Prices
Prime ministers
Profits
Rational expectations
Reforms
Restrictions
Stock prices
Trade policy
Trade restrictions
Weapons
World War II
Japan
ISSN:1468-1099, 1474-0060
Online Access:Get full text
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Summary:The export of arms belongs to the most contested issues in democracies. In this article, we examine the economic repercussions of the recent easing of the Japanese arms exports restrictions. We develop a rational expectations argument to understand why some political events increase the income of the arms manufacturers, while other ones reduce it or have no effect at all. Event studies suggest that investors closely observe relevant political developments since stock prices of the six arms manufacturers companies reacted consistently to the announcements and leaks as to whether the arms export restrictions would be lifted or not.
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ISSN:1468-1099
1474-0060
DOI:10.1017/S1468109912000175