Arms production in developing nations: The relation to industrial structure, industrial diversification, and human capital formation

This paper presents empirical research on physical capital, industrial diversification, and human capital developments in arms‐producing and non‐arms producing developing nations from the mid‐1970s to the mid‐1980s. Drawing on data from the United Nations and the World Bank, a close relation between arms production potential and actual arms production is found which evokes concern about policy‐directions for successful arms control in the third world. The paper closes with brief reflections on third world arms production incentives.