Determinants of Arms Export Decision-Making: Enhancing Compliance through the Informational Endowment of Domestic Interest Groups

Determinants of Arms Export Decision-Making: Enhancing Compliance through the Informational Endowment of Domestic Interest Groups

How to ensure that arms transfers contribute to the internal and external stability of importers and at the same time support human rights and democratization processes – instead of deteriorating the former and hampering the latter? This essay outlines a theoretically derived proposition for a way to increase compliance with arms export regulations. I argue that weak international institutions could be strengthened by NGO activity, increasing transparency, and enabling national interest groups to act as domestic compliance mechanisms.

1. Introduction

A review of last year’s events reveals a large number of incidents in which arms of Western origin were used to perpetuate violence against civilians. The resulting stories emerging from Syria, Mexico or Libya shed a sad light on the most adverse consequences of widespread arms distribution and availability as a result of global arms trade. The reported horrors highlight once more the importance of the question of how to ensure that arms transfers contribute to the internal and external stability of importers and at the same time support human rights and democratization processes – instead of deteriorating the former and hampering the latter.

Arguably the best way to tackle the adverse effects would be to prevent violent actors from acquiring arms in the first place. Approaching the issue from a prevention side, the question could be put differently: How can we make sure that arms transfers do not contribute to a destabilization or obstruct human rights and democratization processes?

To provide a solution to this issue is the goal of arms export control systems, which formulate criteria for assessing the risk of the arms being used for illicit means or illegitimate ends. Recognizing the transnational nature of the issue, states have established a number of international regulations: Instruments like the OSCE Principles Governing Conventional Arms Transfers, EU Common Position 2008/944/CFSP or the newly adopted Arms Trade Treaty all seek to prescribe export criteria in order to prevent the supply of arms into conflict regions or states with poor human rights record.

However, whilst states share the abstract goal of limiting the adverse consequences of global arms distribution, ensuring the necessary compliance with those rules is another game. Being caught in a collective action problem, actors have an incentive to unilaterally defect from the agreements and ignore the criteria while taking the profits of the deal. The weak nature of those institutions, namely their imprecise monitoring arrangements and lack of sanction mechanisms, make it even harder to achieve compliance. Accordingly, most authors analyzing arms export decision-making found evidence that security and economy related factors constitute the strongest determinants of export decisions (Pearson 1994, p. 54; Smith et. al. 1985, p. 243), while regional stability or the human rights situation only have a very limited impact (Erickson 2013, p. 218; Erickson 2008, p. 27). This result must be judged as unsatisfactory with regard to the consequences of arms exports, leaving the open question of how compliance could be enhanced.

This essay seeks to outline a theoretically derived proposition for a way to increase compliance with arms export regulations. Drawing on a game-theoretic model, I argue that weak international institutions could be strengthened by NGO activity, increasing transparency, and enabling national interest groups to act as domestic compliance mechanisms.

2. Enhancing Compliance by Increasing Transparency

I employ a decision-making model developed by Dai (2007) based on assumptions of neo-liberal institutionalism and theories of rational choice. Dai presents a way of formalizing and explaining state decisions towards compliance beyond the traditional IR explanations of sanction regimes, transaction cost reduction, socialization or normative congruence. Broadening the state-centric institutionalist approach allows her to examine the influence of domestic actors on government policies and the specific way they are able to induce compliance under certain circumstances. Assuming that the decision whether to grant a license for the export of arms to a certain country can be construed as a decision on a level of compliance with arms export regulation, I use her approach in order to construct a simplified model of the decision-making process on arms export authorizations.

The basic model comprises three actors: a government and two domestic interest groups, which all act in accordance with their respective preferences, described by utility functions (Dai 2007, p. 90). In the empirical field of interest, the chief policy-maker is represented by the authority responsible for granting export licenses, while the interest groups arise from the society’s distribution of attitudes on arms exports. The group in favor of a high level of compliance consists of all actors with a preference for a more restrictive arms export policy, for example human rights activists, parties of the political left or churches. The other group, opposing compliance and favoring a relaxed export policy, contains the arms industry, some conservative parties or affected unions. The interest groups’ utility functions derive from the distance between a governmental decision and their ideal point in a one-dimensional policy space. The closer a specific decision is to their preferred policy outcome, the larger is the expected benefit and the likelier will the respective group grant the government its support (Dai 2007, pp. 93-97).

However, as governmental decision-making is not disclosed publicly, the interest groups do not have perfect information on them, thus are not able to exactly determine how much of the experienced welfare in a given situation is due to actual government compliance or non-compliance and how much was caused by exogenous factors. The level to which they are able to make out the true reason depends on their informational endowment and monitoring ability, that is how well they understand the underlying processes and how much information they have on the government’s actions (Dai 2007, p. 93). As monitoring beyond easily accessible information is costly, an interest group might not have the resources to improve its observation capability or might not have an incentive to do so (Lohmann 1998, pp. 810-811). Empirically, the level of information depends on the amount of information the actors have on the governments arms export policy and the underlying factors. Yet secrecy and a general lack of transparency in arms trade limit this informational endowment in practice. Information on arms exports is usually only made public in annual reports, whose specifications are often vague or lack important data (Bromley 2012, p. 7; Moltman 2012, p. 28).

The government’s decision is shaped by its will to stay in power as well as its interest to maximize aggregate social welfare by choosing a policy that best resembles the interest groups’ preferences. In Dai’s model, the interest groups have the power to confirm or dismiss a government. The government therefore depends on their political support (through votes, financial contributions, loyalty, etc.). The leverage an interest group is able to exert in this process is based on its resources, e.g. in the form of electoral votes or financial contributions. The probability of a government staying in power (either by winning elections or withstanding other forms of political control) thus depends on the resources of those whose political support it was able to gain through its policy (Dai 2007, p. 90-97). However, Dai’s analysis of the equilibria for the decision-making process shows that besides the political leverage of a group, its respective informational endowment is of importance, too (Dai 2007, p. 87). This finding can be explained by having a closer look at the underlying mechanisms: As not all interest groups have the same level of information, the degree to which interest groups hold the government responsible for its decision varies among them. Actors being able to discover the real source of an observed situation are more likely to base their decision on whether to grant a government support on the actual policy (Dai 2007, p. 94). This leads to the government favoring those groups that are better informed, as its efforts to gain their support are to a lesser extent falsely attributed to other factors and thus more effective (Dai 2007, p. 87; Lohmann 1998, p. 818-820). In the field of arms exports, those actors opposing compliance are in an advantageous position, as in the form of the arms industry they are directly subjected to government decision-making and therefore have first-hand knowledge on arms export licensing. This is crucial, as it can explain why governments stick to non-compliance even though public opinion (of an insufficiently informed electorate) clearly favors more restrictive policies.

As described above, the government’s utility function depends on the interest groups’ perceived welfare and its chance of getting reelected, which in turn is constituted by their evaluation of how much of this stems from government action and their respective potential for political support. Therefore, factors that can change the outcome of the government’s utility function and with it the policy outcome are, ceteris paribus, the political resources of the interest groups and their informational endowment. Increasing either one of those makes it more profitable for a government to choose a different policy, thus leading to a change towards more or less compliance (Dai 2007, p. 94-100).

The qualitative assessment of Dai’s analysis allows the following conclusion: Compliance increases with the potential for political support and informational endowment of the interest group that favors compliance. Therefore, the greater its political leverage and the better its monitoring abilities, the higher is the chance of achieving a favorable outcome.

3. Conclusion

The previous section provided a model for analyzing the determinants shaping a government’s decision on arms export authorization. The result can now be used to derive a possible strategy to enhance compliance with arms export regulations: In a situation where governments regularly violate rules by authorizing exports to countries which would according to the instruments criteria not be suitable for arms transfers, the level of compliance could be increased in two different ways: firstly and rather straight forward by enlarging the political leverage of those groups opposing the transfer, and secondly also by improving their informational status. This second result is less intuitive and points to a strategy, which has not been given much attention so far.

This essay’s argumentative strength is of course constrained by the limits of this format. However, the conducted considerations provide reason to assume that creating greater transparency on arms transfers is a way of increasing compliance. Germany’s arms export policy towards Saudi Arabia might serve as an example and commends itself for systematic analysis: Having become subject to intense public debate and criticism, the German government decided to halt some exports to Saudi Arabia that would have clearly violated the rules. Yet at the same time, several other and not less critical exports, which had not reached the same level of public awareness, were still authorized. Thoroughly testing the argumentation’s predictive power by analyzing actual arms export decision-making in this and further cases could provide an empirical basis and thereby validate the theoretic conclusion on the critical role of publicly available information.

The essay’s findings underline the importance of the work of NGOs like SIRPI or BICC, which monitor states’ adherence and distribute the information to the wider public. Also, the results join in with those voices calling for greater transparency in arms transfers (Grebe 2014; Moltmann 2011) and suggest that through further action in this field, a functioning multilateral arms export control system could be established in the future that is capable of reducing the number of victims.

This article is the winner of IFAIR’s Essay Competition on “What do we know about Arms Trade with Conflict Regions.”

© Titelbild: Web project depicting global weapons sales 1950-2006. Java/Processing, Ruby on Rails. | Jeff Warren from Lima, Peru (


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