From a Cold War peak of some 1000 billion dollars per annum, world military expenditure has declined by about 40 per cent since 1990, reaching its lowest level for 30 years. With such significant decline in global public expenditure commitments to the defence sector, a substantial and lasting peace dividend was anticipated. Most governments believed that market forces, left more or less to their own devices, would deal effectively with this major exogenous shock and generate sufficient new economic activity to allow increased public expenditure on health, education and welfare. The approach of this book is to challenge the fundamental but flawed belief that a substantial and lasting peace dividend could be secured through market solution alone. The principal assertion is that market adjustment by itself cannot deliver such a dividend. The book focuses on the major aspects of the economic, business and security consequences of post-Cold War defence expenditure reduction, including regional impacts, industrial restructuring, supply chain implications, labour market consequences, the conversion and diversification process, technological and strategic trade issues and limited policy response from governments, key problems obstructing optimal market response are identified, possible remedial action by government and others considered, and important areas for future research highlighted.