THE FINANCING FACTOR IN MILITARY TRADE

Available sources value transfers of weapons irrespective of whether t hey are paid for and how. Data from the U.S. indicates that the shares of arms given for free or on credit are high. If other arms exporters , all military aid and all credits used for military purposes are cons idered, which is done here on the basis of rough estimates and an oppo rtunity cost model, the true cash costs of weapons in the year of the actual transfer are small. On the other hand, the financial burden of earlier arms imports via debt service has grown over time. It most pro bably exceeded the true cash cost of imports of arms in the late 1980s . Large differences between arms transfer data and the actual true cos ts of arms transfers means that analysis of the economic effects of ar ms imports without considering these financial aspects makes little se nse.