The Political Economy of Drones

Abigail R. Hall

Advisor: Christopher Coyne, PhD, Department of Economics

Committee Members: Peter J. Boettke, Peter T. Leeson

Enterprise Hall, #318
April 09, 2015, 03:30 PM to 11:30 AM


Throughout its history, the U.S. military has utilized an assortment of technologies in an effort to accomplish a variety of goals. Following World War Two, the emergence of the military-industrial complex and “permanent war economy,” these technologies have been researched, developed, and produced at a rate unparalleled by any other nation. Unmanned aerial vehicles (UAVs), or “drones,” are one recent example of this expanded military technology. Drones have quickly become a core component of the U.S. military arsenal, seeing significant expansion in their development, manufacture, and use since the beginning of the Global War on Terror in 2001. 

This dissertation consists of three essays which examine the interplay between private and public actors in the evolution, development, and implementation of this technology. The work provides a political economy analysis of the drone industry through public choice economics. This serves as a clear demonstration of how the incentives faced by various private and public actors and the interactions between these groups work to influence decisions regarding the evolution of national defense and policies surrounding military technologies. 

The first chapter provides the first political economy analysis of the evolution of UAVs in the United States. Focusing on the interplay between political actors and private economic and their influences on the trajectory of political, economic, and military outcomes, it finds that when studying issues of drones, and defense more generally, particular attention must be paid to the role of actors in both the polity and the private industry. These public-private linkages influence each other and, in doing so, influence the trajectory of defense policy and production. 

The second chapter provides a political economy analysis of the drone industry post September 11, 2001 through the lens of public choice economics. The work begins with the observation that literature on UAVs assumes a public interest frame work. That is, those responsible for constructing UAV policy sets aside private incentives in order to create policies which fulfill a larger "public will." This paper identifies the implications of this public interest assumption and explores the robustness of these implications. I find a general disconnect between observed outcomes and the public interest. In some cases, evidence directly contradicts the assumption of public interest. This work offers an alternative analytical framework to adjudicate between observed policy outcomes and stated goals.

The third chapter analyzes how the use of UAVs in foreign interventions abroad have changed the dynamics of government activities domestically. Facing limited or absent constraints abroad, foreign interventions served as a testing ground for the domestically-constrained U.S. government to experiment with drone technologies and other methods of social control over foreign populations. Utilizing the “boomerang effect” framework developed by Coyne and Hall (2014), this paper examines the use of drones abroad and the mechanisms through which the technology has been imported back to the U.S. The use of these technologies domestically has substantial implications for the freedom and liberties of U.S. citizens as it lowers the cost of government expanding the scope of its activities.