Public–Private Partnerships in Defence Manufacturing: Performance,Risk Sharing and Accountability
Year: 2026
Type: article
Abstract: World military expenditure reached US$2,718 billion in 2024, a real rise of 9.4% and the steepest annual increase since at least 1988, and governments now ask private manufacturers to expand defence output faster than state arsenals can. Public–private partnerships (PPPs) are the main contractual vehicle for this, yet the evidence on whether they deliver value, how they share risk, and who answers for failure is scattered across audit reports, policy documents and a thin academic literature. This review synthesises 101 sources published up to October 2026 on PPPs in defence manufacturing and support, drawn from the United Kingdom, the United States and India. It then develops a Performance–Risk–Accountability (PRA) framework that links a risk-adjusted value-for-money test, an optimal cost-sharing rule and an accountability condition for contestability. Four findings stand out. The UK National Audit Office could not conclude that the £10.5 billion, 27-year tanker PFI achieved value for money, and negotiations took over nine years. The UK government-owned, contractor-operated reform of defence procurement collapsed in 2013 with one bidder. India's private sector raised its share of defence production from 21% to 23% in FY2024-25, while only 14.5% of Rs 74,756 crore of corridor investment commitments had been grounded by April 2026. The framework implies that high-uncertainty development work should carry low private cost shares, mature serial production high shares, and that accountability fails when the state cannot credibly replace its partner.
Author: Kamal Deep Jaspal
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7225803121
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