Perilous Waters: The Political Economy of International Warship Exports

Abstract

Why would a state export warships that could be used against it? Strategic logic suggests that increasing another state's combat power is bad policy, as the United Kingdom discovered when it faced British-built destroyers in its 1982 war with Argentina. But if strategy is the primary guide for arms export decisions, history suggests that this "lesson" has gone unlearned.

Scholars provide divergent answers to this puzzle, resulting in nagging uncertainty about the determinants of conventional arms transfers. Warship exports can generate policy leverage or maximize alliance strength. Warships are also commodities, suggesting basic commercial motivations. These answers come up short, however, when states export warships to rising competitors or longstanding rivals, or sell warships in violation of their own export controls. When leaders make warship export decisions, what factors trump core security interests?

I argue that excess capacity in the naval shipbuilding industry explains these puzzling exports. When supply exceeds demand, the shipbuilding industry lobbies for export--typically emphasizing potential job losses. And since excess capacity often results from defense cuts, export pressure is most acute when the state is least able to subsidize its shipbuilding industry. Thus, strategically puzzling warship exports are more likely when there is excess naval shipbuilding capacity. In short, states discard strategic restraint when jobs are at stake.

This dissertation advances international relations scholarship by synthesizing insights from the subfields of security and political economy, examining the distinctive characteristics of the naval shipbuilding industry, and rigorously testing the excess capacity hypothesis through statistical analysis and detailed case studies. It contributes to arms trade research through its focus on warship exports--including the development of an original warship export dataset--and by suggesting new perspectives on the conventional arms trade more broadly. Finally, it suggests that states with declining naval budgets should take active steps to reduce political pressure for risky decisions in a world of increasing strategic ambiguity.