1. How Does the Moscow Treaty Affect the National Defense Portfolio?
- Author
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Watt, Donald A.
- Subjects
- *
TREATIES , *ARMS control , *NATIONAL security , *INTERNATIONAL relations , *U.S. states ,UNITED States armed forces appropriations & expenditures - Abstract
?Treaties between countries always raise questions as to the value of the agreement. How best to perform an evaluation to assess the value of a treaty is often a major question. Although other economic analogies are often used for national defense, this paper examines the Moscow Treaty through an application of portfolio analysis. Portfolio analysis, as developed by Harry Markowitz, seeks to understand the relationship between the expected return of an economic portfolio and the variance of the expected return. Although the expected return from the treaty can be viewed in economic terms, to go beyond this it is necessary to briefly discuss the role of a state. Thus the expected return in this analysis is more than a simple economic calculation. Expected return and variance, which Markowitz sees as competing goals in economic portfolios, are factors to be considered in an analysis of treaties. Using his assertion that an efficient portfolio is one with the greatest return at a given variance, the Moscow Treaty is examined as to how well it fulfills this function. From the United States? perspective, portfolio analysis shows that the Moscow Treaty increases the expected return from the national defense policy, although it does little to decrease the potential variance in the knowledge of or actual numbers of nuclear weapon systems. Based on the role of the state defined in this paper, the treaty can be judged as a legitimate action. However, if the Moscow Treaty is compared to previous treaties on offensive nuclear weapons, this type of analysis shows it to be less efficient than previous long-term treaties with fixed numbers of weapon systems. [ABSTRACT FROM AUTHOR]
- Published
- 2004
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