| Although the end of the Cold War has led to the cessation of the global East-West arms race of the era, however, military conflicts or arms buildups at local and regional levels have continued unabated. Well-known examples of regional antagonism include Israel and Arab countries; Pakistan and India; North and South Koreas; Taiwan and China; Greece and Turkey. For many of these regional arms races, the major weapons states have played an important role in fuelling the regional arms buildups through arms export or military/economic assistance. Such military/economic aid could have significant impact on the recipients' defense spending, non-defense consumption and regional arms accumulation.;In this study, a regional arms race problem is modeled as a competitive, resource constrained, dynamic process of interaction between two opposing nations (or coalitions of nations) in their acquisition of weapons. Each strategically interacting nation allocates its resource endowment among nondefense consumption goods and defense activities that determine the current and future levels of weapon stock. Although each nation derives utility from both the non-defense consumption and the security provided by the accumulated weapon stock level, however, by increasing the level of investment in weapons and accumulation of weapon stock to boost up the level of security, less resource will become available for non-defense consumption purposes -- the so called "guns versus butter" dilemma. This dilemma is brought to the fore by an explicit formulation of the budget constraints that also depend on the availability and fungibility of foreign economic or military assistance.;Thus, the game-theoretic approach taken in this study provides a more satisfactory underpinning for the well-known a-theoretical Richardson's arms race equations. Whilst analytical and numerical results under various equilibrium solution concepts are derived and compared, the possibility of payoff values moving nearer to the Pareto-efficient cooperative outcomes (for at least one player) by employing non-linear feedback strategies is also discussed and illustrated by way of numerical method. |
