DEFENSE AND DEVELOPMENT INDUSTRY: THEORETICAL CONTROVERSIES AND IMPLICATIONS IN INDUSTRIAL POLICY

Abstract

The main objective of this article is to expose the debate around the relationship between military spending and economic development, as well as between defense industry and technological development. With this in mind, we have explored literature from the classical school of economics through to Marxist, Skeletal, Schumpeterian and Neoclassical writers. We argue in this paper that the strengthening of the defense industry, through a robust and focused industrial policy, is a viable strategy for the endogenization of critical technologies central to the domain of the paradigm of development of the digitization. This strategy demands the construction of a robust industrial policy focused on the development and strengthening of the national defense industry. Therefore, it is necessary to advance the research agenda of institutional arrangements and governance focused on this sector.