Research On Bilateral Governance Structure For Weapons Procurement

From the specific practice, every country over the world is facing the practical difficulties of "dragging (progress), down (index), up (price)," during the process of weapons and equipment procurement. From an economic perspective, any transaction needs a contract to govern. Based on this theoretical and practical background, this article expects to seek to the basic ideas of easing the plight of the practical difficulties from the perspective of weapons procurement contract management.This paper argues that weapons procurement process has continued for a long time, uncertainty, high risk, specific investments and other characteristics, these features make the equipment procurement process will occur in "fundamental change" ,which is issued by Williamson. That is, there are a lot of specific investments and uncertainty in weapons procurement process, even if you can purchase weapons in advance through the tender mechanism to achieve a certain degree of competition, but once complete contracting, procurement of weapons is completely transformed into a transaction of mutually monopoly. Therefore, the weapons procurement management needs to find a management structure to match with the transaction attribute. This paper follows this logic, proceeds to analyze the property of transaction of procurement weapons, and build effective governance structures of weapons procurement.Weapons procurement is a "regular - hybrid" trading patterns, and the governance mechanisms corresponding to this mode is bilateral governance based on the long-term relationship between the military and contractors. Military and contractor relational contract is the basic framework of governance in weapons procurement. In this framework, the two sides can on the price of weapons procurement, progress and quality of three core elements to establish appropriate institutional arrangements of governance, namely the formation of dynamic Bayesian learning model based on the price control mechanism, based on the progress of the governance model mortgage mechanisms and reputation-based model of quality control mechanisms.Trust mechanism plays an important role in the governance framework of weapons procurement. This study developed Williamson's assumption of "contract person" and use notion of split core model of human nature, while having the opportunity to motives, but also can be trusted. The military and contractors can build a good relationship of trust during weapons procurement process. The military and contractors'trust relationship is the foundation of the running of the governance structures, also is the important means to improve the weapons procurement efficiency and reduce the cost of weapons procurement.The bilateral governance structure'analysis just from the perspective of economics is not enough; it needs to introduce the embedded framework in new economic sociology. This paper analyzed the embedded mechanism of bilateral governance structure from the two dimensions of process and structure, and found that the bilateral governance of weapons procurement need the interaction mechanism of integration of economic factors and social factors. It can make the governance mechanisms targeted, cooperation relationships between the military and the contractor longer, more constructive.Finally, based on theoretical analysis, this paper made our weapons procurement management system design of bilateral governance framework forms the three aspects of operation, guarantees and evaluation.