Rational and Nonrational Processes in Foreign Naval Procurement


For much of the 19th and 20th centuries, navies were considered excellent barometers of a nation’s strength, and a strong surface fleet was generally regarded as prerequisite for major power status. Less research has focused on naval arms procurement outside of the major powers. What there is has been concentrated almost exclusively on the recent developments in the Asia-Pacific region. International relations literature offers competing explanations for the accumulation of naval power. A rational, realist framework emphasizes reasons of security. A maritime state will build a large navy if it faces a maritime threat, or if it has maritime-based national security vulnerabilities. Japan, for example, is reliant on global sea lines of communication for fossil fuels and other natural resources not found in the country itself, which is a source of economic vulnerability. There are also nonrational reasons for a large navy. Constructing navies requires high capital investments, which also necessitates large defense industrial entities. For a variety of reasons these entities can leverage their resources, knowledge, and power position to influence procurement decisions made by governments. This relationship need not be always between the government and a defense industrial corporation in the same country. Further, the military itself is an actor in procurement decisions, usually along with civilian government bureaucracies such as ministries of defense, and legislative bodies, all of which have varying degrees of influence over the distribution of resources. Bureaucratic politics explanations suggest that the military will push for larger resources, including larger navies, than is rationally necessary. Finally, large and noticeable navies can become focal points for national pride, as did America’s Great White Fleet. Prestige-seeking may further introduce non-rational procurement decisions.

Large-n regression analysis, which excluded landlocked and P5 states, finds that there are only a few reliable predictors of naval power (measured both quantitatively and qualitatively). Using the number of principal surface combatants, total naval tonnage, and a self-generated six-level scale of qualitative naval capability as dependent variables in two sample years, 2000 and 2010, the most frequently statistically and substantively significant variables were real GDP and population (used as controls), number of Exclusive Economic Zone (EEZ) neighbors (used as a proxy for naval threat), and naval defense exports (used as a proxy measure of defense industrial size), although the latter was surprisingly a negative predictor of naval power. When Germany, a country with huge naval defense exports, is removed, it becomes a positive predictor of naval power, as would be expected.

Germany, in addition to its large defense industry, has a well-institutionalized and regulated defense procurement process. These institutions, including strong civilian control, prevent nonrational forces such as prestige, defense industrial interests, or military parochialism from having undue control on procurement; this is despite the evident export success of Germany’s naval defense industry and the requisite economic power from those exports.

Since the Cold War, Germany’s naval procurement has largely matched declaratory policy. While numbers of submarines, missile craft, and principal surface combatants have all decreased, it was most shallow for the first two. While retiring its legacy classes of destroyers and frigates, the Deutsche Marine has introduced new classes that focus on preserving traditional high-intensity missions like anti-submarine warfare and anti-air warfare and other classes that focus on new lower intensity missions. These ships, the Braunshweig and Type 125 frigates, are designed with deployability and flexibility in mind. In strategy documents, the navy moved toward system-focused strategy, rather than its Cold War state-focused strategy. Instead of defending Germany against state threats, the main role of the navy is participating in multinational missions intended to preserve peace and good order at sea, such as naval peacekeeping operations or counter-piracy operations.

In contrast to the German Navy is the Taiwanese Navy, whose declaratory strategy has consistently emphasized the need to protect the island nation against the Chinese naval threat. Part of the reason Taiwan makes for an engaging case study is that the predicted naval size, based on the regression analysis’s β values and Taiwan’s own independent values, is smaller than its observed naval size. The relative size, proximity, and likelihood of attack from the Chinese navy, factors that were not accounted for in the regression analysis, likely explain this difference.

Yet, a fully rational explanation for Taiwan’s naval size also does not fit, at least temporally. If Taiwan were reacting to Chinese naval threat, then their naval capability should have grown and kept pace with China’s, but while the People’s Liberation Army (PLA)’s naval power has skyrocketed in the last two decades, Taiwan’s naval power has largely remained the same or increased only slightly. Partly this is a result of factors outside Taiwan’s control: China exerts incredible pressure on other states, including the United States, to prevent them from selling arms to the island nation.

Beyond that however, interservice rivalry among Taiwan’s three military services and strong political divisions have also created disunity in the procurement system that has led to inefficient outcomes. Proving that where you stand depends on where you sit, naval procurement lags when Army or Air Force generals head the Taiwan’s General Service Headquarters or Defense Ministry, and increases only when naval commanders assume positions of power in the defense bureaucracy. The long reign of army general Pei-tsun Hau as Chief of the General Staff from 1981-89 is the starkest example as the Navy (and Air Force) saw their strategic roles minimized and procurement decisions favored the Army. When political winds changed, ousting him from power, the succeeding decade saw large naval procurement because the Army’s influence declined with Hau’s departure. Political partisanship since then, however, has politicized national security and prevented or slowed force growth, for example by political party divisions in the legislature delaying funds for arms purchases from the United States.

While partisanship and interservice rivalry exists, to varying degrees, in almost all countries, Taiwan can ill-afford such nonrational forces given its limited resources and the gravity of its military threat. The case studies of Taiwan and Germany show the effect strong institutions in the procurement process have toward rationalizing procurement and force size. Germany benefits from a well-regulated defense establishment, even receiving a rare “A” rating from Transparency International’s government defense anti-corruption index. This has generally allowed the German military and political leadership to devise a post-Cold War strategy in line with their national interest and execute the procurement necessary to meet that and avoiding non-rational pressures to build a larger navy than strategically necessary. Taiwan, while identifying the importance of responding to China, has been less efficient in its procurement. In addition, Taiwan’s procurement has been much more affected by political divisions and interservice rivalry, which have actually slowed force growth and led to strategic vulnerability. Overcoming these and other nonrational procurement forces is essential for any maritime power, and this analysis highlights the importance of considering them when analyzing foreign naval power.