The Politics and Economics of Arms Sales

I have been doing a lot of thinking lately about the nexus between the politics and the economics of arms sales.  It is a question that lies at the heart of my dissertation, but one which is mostly inadequately appreciated by both economists and political scientists.  I had my class (Politics of Arms in International Relations) read some pieces this week which relate to this decision-making nexus and it has brought some of these issues back to the forefront in my own thinking.

First off is a great quote from Smith, Dunn, and Fontanel (1985) about the problems of politics in the transfer of arms [1]. (Emphasis is mine)

"Although arms transfers comprise a significant component of world trade, they have received little attention from mainstream economists.  This partly reflects the data difficulties which inhibit accurate estimation and quantification, and partly the contamination of the topic by political and strategic elements beyond the economists' expertise."

The idea that an issue is contaminated by political and strategic elements is an interesting perspective of political science.  It is refreshing to see economists admit that there may be something that is beyond their expertise as well!

Smith et al (1985) argue that there are three primary reasons for states to wish to sell weapons:

1.     Strategic: governments wish to maintain an indigenous arms industry ins order to ensure weapons designed exactly to their requirements, national independence of supply, and access to the latest military technology. There is an incentive to export, even if exports are below the average cost. (242-3)
2.     Political leverage in foreign policy: nation can assist their "friends" by strengthening their military position while at the same time having potential to influence their behavior (Kinsella tie-in) or that there is a prohibition that weapons not used aggressively or for internal repression (tie-in with Blanton). (243)
3.     Economic benefits: these include technological spin-offs, employment benefits, economic momentum (243-44)

Caverley and Kapstein [2] look at similar arguments in the case of the United States arms production. They argue that the US lost its advantage in arms exports because of the domestic demands of the pentagon.  The penchant for the US military to ask for the nicest, highest spec equipment means that the finished product is priced out of range for non-domestic buyers.  They give the example of the F-35, which was designed to be a low-cost high tech fighter that would be good enough for most missions and which would be eminently exportable.  The rising costs of that aircraft have meant that many staunch allies have reduced or cancelled orders for the aircraft. The increased design specifications have made the aircraft less suitable for the domestic role that it was originally meant to fill.

This is an interesting dilemma.  The world's superpower which has the advantage of a strong domestic market is being squeezed out because of the unrealistic demands of that same market. This echoes the findings of Smith and colleagues in the case of decreased military spending by Britain, GDR, and the US means fewer exports, while the opposite was true for France and Italy.  They note that it was the civilian oversight of the procurement process in those states - with an eye toward exports - that caused this result.

I had some articles in my newsfeed about aircraft sales that made me think of these arguments today.

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Links

First F-35 built in Europe goes for its maiden Flight: LINK

Making F-35s more quickly can lead to problems: LINK

Kuwait is buying the Eurofighter.  LINK

Brazil is buying a Swedish fighter: LINK  LINK2

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REFERENCES

[1] Smith, Ron, Anthony Humm, and Jacques Fontanel. 1985. “The Economics of Exporting Arms.” Journal of Peace Research 22(3): 239–47.
[2] Caverley, Jonathan, and Ethan B. Kapstein. 2012. “Arms Away.” Foreign Affairs 91(5): 125–32.

Arms related Humor

There are two pieces that I've seen in the past week or so that have me laughing.  The first is from the Onion, which is always fun.  The headline is the funniest part:

Lockheed Martin Sales Staff Instructed To Really Push Tactical Air-To-Surface Missiles This Week

and here is one of the quotes from the article:

“Do whatever it takes to unload this stuff: place a few cold calls to foreign defense agencies, offer to throw in a couple Stalker drones for free. I don’t care what you have to do, just so long as we can hit our numbers and make way for the anti-aircraft shipments we’ve got coming in at the end of the month.” 

Pure awesomeness! LINK

From Duffel Blog

For Sale: AGM-114K Hellfire Missile, Slightly Damaged. Asking $1000 OBO. Location: Fort Drum, NY LINK

And my personal favorite (with picture!)

Lockheed Upbeat Despite F-35 Losing Dogfight To Red Baron

LINK to the hilarious full post.

More Arms Round Up - Strategic Bombers and Navy for Russia and United States

US Aircraft News

I have been following the development of the F-35 with interest for the past few years.  It represents a new way of building aircraft, but seems like it may be a model that is not sustainable, or feasible.  I didn't know the US was looking at creating a third generation strategic bomber, but that seems to be the case.  This article gives some details about the development and testing of this new aircraft.  It will be some time before it is ready for production - if it is chosen as an option.  LINK  LINK2

US most Advanced Fighters, the F-22 raptor, deployed (kind of) to Europe as a reassurance against more aggressive Russian maneuvers in Europe's airspace.  The problem with this power projection is the weakness that it represents because of the low numbers of aircraft in service. LINK

Russian Bombers and MiGs

Meanwhile, Russia's strategic bombers the TU-160 is being modernized.  LINK  With new avionics: LINK

Russia's new smart bombs to go on those updated bombers. LINK

Russian MiGs owned by Bulgaria to be repaired in Poland.  LINK

This is a fascinating look at dependence (my students will have read Kinsella (1998) and should know about dependence) and using an outside state to provide maintenance.  This can't be good for Russia's long-term arms sales.  I am wondering about the long-term implications for arms sales if the supplier is seen as being too pushy.  That's a take on things that I don't think I've seen in the literature before.

Ukraine Crisis News Roundup

Background

I have been working on a paper about covert action.  The paper relies on an extended case study of Russia's various actions in Ukraine since the crisis began in November 2013.  I lived in Ukraine from April 1998 through February 2000 and spent most of my time (12 months) in Donetsk.  I spent another three months in Gorlovka and the remainder of my time in Zaporozhye.  The war in Ukraine is one that has touched the lives of people that I know and love.  My wife is from Russia and my mother-in-law still lives in Russia.  I get a lot of different views on the war living in Kazakhstan and watching Russian news and hearing my students' views of the events.

I won't outline my paper here in full, but the main argument is that states will react to revelations of their covert actions in different ways depending on whether the action was covert to protect the regime from internal pressures, or covert to avoid problems with external states.  I believe that the events in the Donbass have followed a pattern of deliberate misinformation by the Russian state to its own people primarily because Russian involvement in a ground war, civil war, was unpopular to begin with.  The reaction of the government to revelations of Russian involvement have been completely different than reactions to the events in Crimea - which has become a celebrated accomplishment of the regime.

I am collating a collection of information about the conflict that I can use in my own writing.  Maybe it will be useful to others that are looking for more information about what is happening in Ukraine this summer.

Links

Russia Annexing Donbass De facto?

This fascinating article discusses the consequences of Europe supporting Ukraine's position in the Donbass, specifically the need for special status for the Donbass territories to come only after Russia has removed its troops, the rebels have disarmed, and some semblance of order has been restored to the territories. 

Kyiv is insisting that the pro-Moscow rebels disarm, Russia withdraw its troops from Donbas, and that separatist-controlled areas of the border be returned to Ukraine's control before there can be any discussion about the territories' status. 

This puts Moscow in a tough position, which is being called a soft annexation.  

The moves to formally introduce the ruble in the separatist regions, the threats to hold a referendum on joining Russia, and the noise about issuing Russian passports are a last-ditch effort to pressure Kyiv. And Kyiv isn't budging.

Which leaves Moscow stuck taking its least worst option: call it a soft annexation.
And this removes the last bit of leverage Russia has over Kyiv.

"Ukraine will never now be a gray neutral territory between East and West," Ukrainian political analyst Serhiy Taran told Nezavisimaya Gazeta. "Either we won't emerge alive from this hell or else we will emerge very strong. I am convinced it will be the latter, if only because this is what everyone except Russia wants." 

Intelligence in the Conflict

Russia is said to be reactivating Soviet Area European spy networks. 

The Czech Republic's counterintelligence agency says the number of Russian spies remains high and the Kremlin is building a spy network in Europe similar to the Soviet network before World War II.

Link

Academic Stalking and other Notes from APSA 2015

I am currently attending the Annual Meeting of the American Political Science Association.  As I was walking to a panel today I saw a man sitting and read his name tag: David Kinsella.  Dr. Kinsella is my academic hero.  A paper that I read of his during my first year of graduate school is what put me on the path to studying arms transfers.

I didn't have the guts to just go up to him and say hello and tell him how much his early work has inspired my own career.  I probably should have.

***

I ran into two Iowa students at the poster session this morning (September 3rd).  They were both young graduate students when I was finishing up.  Now they are both getting close to the end of their graduate work.  They are both doing interesting work and had well-prepared posters.

***

I saw a few interesting posters this morning.  One is related to my own arms sales research.  It is a test of arms data that shows that states that export weapons spend less on their own defense.  This is an interesting finding and one that I need to look more at before I do much more on my own project.

Link-O-Rama: Arms Edition

Apologies and Excuses

So much for resolutions! (Link) A bold prediction about my future blogging awesomeness followed by 1 post in 5 months is not a stellar beginning.  In my defense, the past 5 months have been as busy as any in my life.  These are the highlights of the past five months:

• The end of the semester
• chairing our graduate admissions committee
• A trip to the US to sit on a hiring committee
• A trip to the US a week later to attend a seminar at Brigham Young University
• Graduation
• A trip to Poland for a conference
• A vacation to the US for 5 weeks to visit family
• The return to Astana to start the new semester with a new role: acting department chairIn addition to the normal activities of getting ready for the semester (preparation of syllabi, courses, etc) I have had the new administrative tasks associated with my new position.  I also had an article accepted for publication that needed work to be ready for the publisher.  I have also been scrambling to put together my paper for the American Political Science Association Meeting (APSA) which is next week. 

I now have a better understanding of the wisdom of my PhD advisers who emphasized that life after graduate school was more busy.  The pressures and activities are a bit different, but it is definitely busy.

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Arms Links

With the preamble over, I am now going to post links to articles about arms.  I am doing this in conjunction with my PLS455/555 Politics of Arms in International Relations course at Nazarbayev University. I thought this would be a good resource for my students as they begin their case study assignments for the course. It is also a good way for me to organize these links and resources and to put together some initial thoughts.  In this edition I will keep my comments brief. I would like to do this more regularly and add more context and analysis. 

F-35

• Australia drops out of F-35 program. Large-scale weapons system collaboration is hard! Link
• A good roundup of lots of arms news.  News on Russian Sukhoi fighter jets, and the ongoing saga of the F-35 fighter. Link
• F-35B not doing well in carrier testing and certification. Link

Mistrel

• France returns Russia's money for the Mistrel.  This is a great example of the politicization of arms transfers. It's an interesting case of Russia importing (Russia is not a major arms importer) and being denied a weapon system that it really wanted. Link
• France needs to sell the Mistrels it is not selling to Russia.  That will prove very difficult. Link

Russian Arms and Navy

• Russia to develop a new "Doomsday" aircraft command center. Link
•  Russian navy to begin building new destroyer - with capabilities that are very impressive and challenging to the US Naval superiority. Does this mean a comeback for the defense industry in Russia? Link
• New Russian drone design. Link
• Seven new and scary Russian weapons systems.  In this sense scary is for the West, or potential military rivals of the Russian state.  Hypersonic weapons are a new class of weapons that pose an interesting dilemma.  They are definitely weapons of the offensive, but are meant to overcome missile shield technology that rendered earlier nuclear offensive capabilities less secure. This is a demonstration of a technological arms race. Link
• Morocco to buy Russian Amur class submarine.  Why? Link
• New love for an old Bear. The TU-95 and nuclear bomber advantages. Link
• Refurbished Russian submarine with all kinds of capabilities baffles US experts. "The Russians were always more innovative at this than we were."  What also struck me about this sub is its length.  It is half the length of a US aircraft carrier.  The Russians don't mess around when it comes to submarines. Link
• Russian air to air missiles R-73 are flying off the shelves of the arms bazaars. Link
• Story about Russia's new Armata tank. Link
• Interesting video of forum on Russian naval power in the 21st century. Link
• Russia selling powerful anti-aircraft missile system to Iran.  Link

India

• Predictions of US-Russian arms competition in India.  This is an interesting field of inquiry.  India just became part of the Shanghai Cooperation Organization (SCO), but is also a democratic state, unlike most other members of the organization.  India has traditionally been one of Russia's biggest customers, and I have dealt with the issue of Russian-Indian arms purchases in other posts (Link, Link, Link). Will closer security cooperation cement the relationship that has been built between the two countries? Link
• India is going to be buying a lot of arms in the near to medium future. 4.7 Billion dollars is a good start. Link

US Navy and Military

• US begins work on second "Gerald R. Ford" Class of Aircraft Carrier to be named after JFK. Link
• An interesting piece on the size of the US navy.  Arguments on one side are qualitative (our fewer ships can do more than many more ships were able to do earlier.)  Arguments on the other are quantitative.  Fetishizing numbers is not good policy.  However, arguing in terms of threats faced and the ability of the naval force, as presently constituted, to respond to those threats is good policy. Questioning the definitions of threats is the next step in such an analysis.  Policy in the absence of strategy is rudderless. Link
• Russian jammers supposedly render aircraft carriers useless.  Whither the advantage of carrier groups? Link
• The US is not selling, but is deploying F-22s to Europe to ease the minds of allies.  Increased Russian air activity within the context of the Crimean and Ukrainian conflict is increasing tensions in the region. Link 
• Strong market for used US M113 Armored Personnel Carriers and its variants.  I spent a lot of time in one of these in Baghdad 2003. Link I spent more time in the Bradley, though.
• I don't understand why the US Air Force hates the A-10 so much.  I think the Army would be happy to have these aircraft. Link
• 
  

China

• China is holding a large military parade next week and is having trouble attracting western leaders: Link  and another Link

Communist China generally shies away from the vast annual demonstrations of military might that were a hallmark of the Soviet Union, normally holding such events once a decade to mark the foundation of the People's Republic. 

It has struggled to attract world-wide interest for the parade as world leaders are wary of the tone of the event, and the risk of lending it legitimacy. 

Beijing is becoming increasingly assertive in the region and regularly accuses Tokyo of failing to show sufficient contrition for Japan's 20th-century invasion of China.

Other Miscellaneous Arms Links 

• Analysis of Central Asian Military capabilities.  This should be of interest to my students. Link
• Sweden and Brazil sign a deal for Gripen fighters. The deal includes financial terms, as well as details about the licensing and production of half of the fighters in Brazil.  The jet was also modified to fit Brazil's needs.  Link
• French Deliver Rafale fighters to Egypt.  Link
• This link maybe the most interesting.  It details the problem with Pilatus aircraft that was sold to Chad by Switzerland. The aircraft is not mean to be armed or used offensively, but apparently it has been.  This has led the Swiss to pull back on other potential exports. It is interesting to see a principled stance on arms transfers. Economic theories of arms transfers would predict that Switzerland is under too much financial pressure to export in order to support its domestic manufacturing for a product that has a limited domestic market. Interesting counterexample/mini case study to think about in terms of policy-making and the complexity of arms sales as a topic. Link

Maybe I'm old fashioned, but....

So I read this article on the Duck of Minerva about a week ago and I had a bit of a visceral and angry reaction to it.  I saved it to read later, and am now re-reading it. In this article, Mackenzie talks about the standards of combat for men and women and concludes that for a number of reasons there should be a re-evaluation of the physical standards of combat so that the military will not remain "behind."

If standards don’t change, inevitably, very few women will ‘make the (male) cut’ into combat roles, including into the Marines. But a lack of change will also keep the entire military behind. There is a need to  develop physical standards that reflect modern warfare, recognise areas that women excel physically- including in endurance and flexibility, and changing a sexist culture that values bands of brothers and men’s bodies over all else.

Mackenzie discuses both the changing nature of combat, and the fact that all soldiers (male and female) receive combat training, but is upset at the apparently anachronistic physical standards required for combat missions.  I have a number of problems with the article.

First, is the conflation of the fact that our most recent wars have a different character than past conflicts means that there is no difference between military tasks. This is not true, and it is laughable on its face.  Even someone with only a cursory understanding of warfare will understand that there are different physical abilities needed for driving a truck versus fighting in the infantry.  These different physical standards limit the number of men who are allowed to do certain highly physical tasks.

Combat training - and remember that basic training is just that: Basic Combat Training - is designed to make every soldier a minimally proficient soldier.  This applies to men, women, intelligence specialists, truck drivers, mechanics, cooks, etc.  When I went through basic training in the summer of 2001 it was at Fort Jackson, South Carolina - in an integrated male-female basic training. Something that has been around since the early 1990s.  We were all soldiers in combat support roles.  I was in intelligence. Others in my platoon were intelligence, some were clerks, some were cooks, and some were mechanics.  Many of the females were going on to be medics.

At some point - based on the fact that we were in the Army - we could expect to be in combat.  But combat for the infantry has a very different nature than that of the intelligence specialist and truck driver. Yes, in Iraq, women are in convoys that are attacked, are on bases that are attacked, or may be part of patrols and teams that come under fire.  Having basic skills is key.  This is different than the task that was given to the Marines in the battle of Fallujah.  It is different than the skills used by the 3rd Infantry Division and 101st Airborne in 2003 in fighting against regular military and irregular militia in the beginning part of the war in Iraq.  I know because that is who I was with - as an intelligence guy assigned to an infantry unit.  And I was not prepared.  I am a big man - 6'4" who at the time was in the best shape of my life.  And I was out of my depth.  I did not have the training to be doing what was done.

The purpose of the military is to fight and win battles.  Combat roles are open to women who meet the standards.  I am not convinced that Mackenzie has made a cogent argument about why those standards should be relaxed.

In Mosul in May 2003 - after I had already traveled across the whole country with the Infantry.  Flying in helicopters is so much easier.