Transfer of dual-use technology from the United States to the USSR: The tradeoff between national security and economic benefits, or, Klitgaard's dilemma revisited in the Gorbachev era

There is an inherent tradeoff among the economic benefits, political effects, and national security risks in trade relations between potential and actual adversaries. This dilemma, originally proposed by Robert Klitgaard (1974), is applied herein to U.S.-USSR relations during the Gorbachev era (1985-1991). Locating the tradeoff as applied to the Soviet Union is complicated by the additional factor of exporting potentially dual-use technology, and by the difficulties of coordinating export policy among a coalition of industrialized nations.; Cold War-era export administration legislation ignored the dilemma: under almost all circumstances, the United States considered economic benefits to be less important than political-security concerns in its relations with the Soviet Union. Gorbachev's policies orchestrated changes of such magnitude, both within and outside of the USSR, that the United States was faced with the necessity of rethinking the relationship between its security and trade policies. To date, the United States has yet to seriously consider its own economic security in terms of its partners in the multilateral export control regime (COCOM). COCOM has, since its inception, been primarily engaged in ensuring the technological security of the West against its common adversary.; The collapse of the Soviet threat has sharply highlighted the intra-COCOM differences on security: the Americans emphasize almost exclusively political concerns; the West Europeans stress economic as much as political interests. Even during the Cold War, the European allies were more inclined to trade in dual-use technology. Now they have few objections to not only continuing, but escalating, this practice.; This study expands Klitgaard's model in a dimension that it originally considers only perfunctorily: the economic competition that the United States increasingly faces from its allies. The U.S. government will henceforth have to consider evaluating the costs and benefits of each and every trade deal: the former USSR is no longer an ideological, and less of a military, threat; the COCOM partners are investing heavily in advanced technology that the ex-USSR desperately wants; and, finally, the former Soviet Union is a relatively virgin market. In sum, the United States is competing with other industrialized nations for trade advantages with an erstwhile adversary.