Measuring Defense Conversion in Russian Industry

The size of the defense industry in Russia has been a primary concern for policymakers and scholars interested in international security and arms control, as well as for students of Russian politics and economy more generally. For an issue attracting so much apparent
interest, however, there appears to be remarkably little quantitative information available on the scope of the military production sector and, particularly, on the extent to which it has changed in recent years. Analysts of the military-industrial complex (MIC)1 have either
combined the scraps of information derivable from official reports to try to form an overall picture (e.g., Cooper (1991a and 1991b), Despres (1995), Gaddy (1994), Sapir (1994), Sanchez-Andres (1995) and most of the published literature in Russian language), or they have been limited to detailed case studies of just a few firms, eschewing any attempt to measure the sector as a whole (e.g., Bernstein (1994)). Both approaches have contributed substantially to our qualitative understanding of the organizational structure of the military industry and of recent changes in the operation of some of its enterprises. But neither provides quantitative answers to the following questions: How large is Russian defense industry? What is the magnitude of decline in military production since reforms began?
What are the sources of the change? To what extent are resources being released for civilian purposes? Yet the answers have important implications for international security and for the design of foreign aid and domestic policies to assist the conversion and industrial
restructuring processes.