THE PROCUREMENT NEXUS

Escalation in the unit costs of military equipment is now recognised a s a rational and cost-effective response to the circumstance of cost b eing associated with absolute levels of performance but effectiveness deriving from superiority in performance over rivals. Less clear has b een why the rate of cost escalation should be so uniform over time and across so wide a range of apparently disparate items. This paper show s the rate of cost of escalation to be the product of a nexus of diver se influences all tending to much the same end. Cost escalation is jud ged, therefore, to be a robust phenomenon likely to persist unaltered even in the face of major geo-political or economic changes.