Foreign Military Sales and U.S. Weapons Costs
Staff working paper
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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Until recently, evaluation of the foreign military sales FMS program has depended chiefly on security and foreign policy judgments. The programs goal has been assumed to be promotion of these policies, and its success measured by how well they are served. Recent debate has, however, extended to the economic consequences of foreign sales-particularly their secondary effects in reducing U.S. weapons costs and requirements. These savings have been considered as a valuable attribute of the FMS program, as compensation for faults in the program, and as reason for not restraining the program with additional Congressional regulation. This study finds that some individual cases do produce substantial savings against a given weapons total program costs. These cases are, however, exceptional. Large savings do not seem to be generally characteristic of FMS. Similarly, it is difficult to identify consistent savings resulting from reduced requirements on U.S. military resources as a result of FMS strengthening recipient states. Certain sales--such as those to NATO allies--may reduce pressures on U.S. resources. The majority of sales, however, go to the Middle East, where more important policy concerns, such as the distribution of U.S. weapons technology, complicate and overshadow military costs evaluations.
- Economics and Cost Analysis