Who Receives American Arms? An Empirical Analysis of the Determinants of U.S. Arms Transfers

Abstract

This study examines the determinants of U.S. arms transfers to recipient countries between 1995 and 2020. Using a country fixed effects regression model and panel data from the SIPRI Arms Transfers Database, this analysis examines which economic, political, and strategic characteristics are associated with higher levels of U.S. arms transfers within countries over time. It then tests whether these results vary across countries based on the World Bank’s income classifications. The baseline results reveal that NATO membership, political rights, and bilateral trade with the United States are the three predictors of U.S. arms transfers across the full sample. However, the income-level analysis demonstrates that these relationships do not operate the same across levels of development. Among high and upper-middle-income countries, military expenditure and NATO membership are the primary drivers. Among lower-middle-income countries, political rights and Major Non-NATO Ally status are significant predictors. And in low-income countries, the MNNA designation is the sole positive and significant predictor. These findings suggest that the determinants of U.S. arms transfers vary systematically when income is used as a basis for analysis. On a broader level, the results are more consistent with a realist interpretation of U.S. foreign policy than a liberal or idealist one, reflecting a foreign policy driven by strategic self-interest.