June 18, 2020 3:15PM

Explaining U.S. Arms Sales

By A. Trevor Thrall and Jordan Cohen

This past June, the U.S. State Department inspector general who was fired by President Trump, revealed that the administration discouraged him from investigating arms sales to Saudi Arabia, which the administration has pursued despite intense opposition in Congress in light of Saudi Arabia’s disastrous war in Yemen and the murder of Washington Post journalist, Jamal Khoshoggi. These investigations also carried particular weight because of the sheer volume of sales from Washington to Riyadh. According to data from the Security Assistance Monitor, the United States delivered over $34 billion in arms to Saudi Arabia since 2002 and the two countries have agreed to sales worth $5.08 billion in 2019 alone.

Meanwhile, the administration is preventing investigations into a country that uses American‐​made weapons to commit human rights abuses in Yemen, funds unsavory extremist groups, and opposes U.S. diplomacy abroad.

Our recent article in Strategic Studies Quarterly suggests that this situation is not unique.

Power, Profit, or Prudence?

Our study seeks to determine the relative impact of strategic, economic, and risk factors in explaining U.S. arms sales since 2001.

The traditional view, echoed both by most scholarly research and Washington’s policymakers, is that strategic considerations explain why the U.S. sells more weapons to certain partners than others. They argue that arms sales are a tool for strengthening the military capability of allies and strategic partners to increase regional stability abroad.

A competing view is that economic motives drive arms sales. This has been echoed by President Trump. Referring to an arms deal with Saudi Arabia, he noted that the sale, “will create hundreds of thousands of jobs, tremendous economic development, and much additional wealth for the United States.” Critics of arms sales often argue that in fact it is the narrower, profit motives of defense contractors that explain the pattern of U.S. arms sales, and that they often outweigh other considerations.

Finally, by law, the United States must consider the possible negative consequences of every arms sale before approving it. The 1976 Arms Export Control Act, the 1997 Leahy Law, and the 2008 Foreign Assistance Act all require in various ways that the U.S. government give consideration to risks. Even the Trump administration’s update of the Conventional Arms Transfer Policy emphasizes avoiding civilian casualties made by American weapons.

To understand what factors shape U.S. arms sales, we collected data concerning arms purchases, ally status, bilateral trade, military expenditures, and risk indicators for 183 countries, 169 of whom purchased U.S. weapons at some point since 2001.

Overall, we find strong evidence for the impact of strategic considerations. Between 2002 and 2019, for example, we find that American allies purchased $135 billion of weapons compared to $75 billion for non‐​allies. Even controlling for other factors, we find that the United States sells over twice as much to allies as non‐​allies.

We also find evidence that economic considerations are crucial to determining where Washington sells weapons. Holding other variables at their means, moving from the lowest to highest value for bilateral trade leads to a predicted increase of $491 million in arms sales. Utilizing a similar process, but replacing trade with military expenditures, we find that the country who spends the most on their military will receive an additional $372 million in sales.

Unfortunately, however, we do not find any evidence that risk considerations help shape arms flows. Leading customers include both low‐​risk nations like Japan and Australia and high‐​risk nations like Saudi Arabia, Egypt, and Turkey. This is reflected in our analysis where risk fails to reach statistical significance in any of our models.

These findings are concerning. Out of the 74 allies that bought weapons, fourteen of them ranked in the riskiest category for one of the indices making up our risk index. We find an even more extreme result for the 95 non‐​allies who bought weapons: over half are in the riskiest category for one of our indices.

Balancing the Costs and Benefits of Arms Sales:

Without question, analyzing the costs and benefits of an arms deal is difficult given that reasonable minds may disagree on which benefits and risks matter most, as well as on how likely each of them is to be realized. What also makes it difficult to balance benefits and risks is the fact that most of the benefits come in the short term, while the downside risks will emerge over a much longer time frame.

Regardless, recent history should give observers pause. The United States has seen weapons sold to risky customers misused, lost, stolen, and used by terrorist groups against Americans and its partners. During the Trump administration American weapons have enabled autocrats and amplified conflicts, including Saudi Arabia’s war in Yemen, and heightened tensions with Russia and China.

Moving forward the United States can do more to reduce the risks from selling weapons. As we argue in our article, a simple start would be to stop selling weapons to the 62 countries that are not American allies and which have one or more red flags with respect to key indicators of risk such as poor human rights records, high levels of political violence and terrorism, etc.