Examining Institutional Factors May Yield More Effective Policy Interventions to Improve Defense Acquisition Outcomes

Abstract

Existing studies of cost growth in defense acquisition have been predominantly descriptive rather than explanatory. However, recent studies have highlighted the importance of decision-making by government officials as a factor affecting cost growth. While observers of defense acquisition acknowledge the role of social, cultural and institutional factors on program performance, few studies are focused there. Thus, informed by the literatures on cost growth, behavioral finance, group decision-making, and organizational failure, a research agenda is developed to consider factors affecting cost growth beyond those traditionally studied. Ostrom’s Institutional Analysis and Development framework can be the foundation of a stream of research including both field studies and laboratory/computational experiments that may provide fresh insights into the cost growth phenomenon and — more importantly — aid in the design of more effective policy interventions.

Keywords: defense acquisition, cost growth, institutionalism, policy intervention, military sociology, computational model, game

JEL Classification: C9, C7