Billions of dollars in "strategic" U.S. military spends overseas comes with risks that could easily erase the benefits, according to an analysis published by the Cato Institute.
"Over $1 billion a year in overseas defense spending is 'strategic” meaning that it is designed to support both global military operations and foreign policy objectives, usually through limited‐competition contracting with foreign firms," wrote Renanah Miles Joyce and Brian Blankenship. Joyce is a PhD candidate in political science at Columbia University and Blankenship is an assistant professor of political science at the University of Miami.
Government procurement has become "one of the U.S. military’s most used—and least scrutinized—foreign policy tools for rebuilding states after war, buying military access, and pacifying insurgencies," they wrote.
However, "no one knows whether this spending is achieving its intended effects—or producing unwanted consequences," they said.
If the federal government provides money to local economies with no control over how the money is spent, it could easily lead to political blowback, as well as security risks, according to the analysis.
"The U.S. government needs to better assess the costs of doing this sort of business," they argue. "The Department of Defense should improve data collection and reporting on the economic and political effects of preferential procurement policies. For its part, Congress should require impact evaluations as a condition for continued authorization of these policies and improve oversight on vendor vetting requirements."
The authors urge the U.S. government to examine foreign policy goals and the causes of limited-competition procurement. They note that foreign policy tools aren't perfect and that sometimes spending really is the best option. However, doubling down on spending to pursue flawed goals can throw "good money after bad," they wrote.
The authors question the United States' core interests and how large of an overseas footprint is needed when it comes to pursuing those interests. They note that there is not much evidence that spending has any positive effects on certain economies, nor that it is more effective than aid or arms. They believe that spending should be used sparingly and with caution.
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