Multilateral export controls improved U.S. real military expenditure relative to adversaries by about 1 log point in an October analysis, authors of a National Bureau of Economic Research working paper said.
Unilateral U.S. controls produced a gain of only 0.14 log points while imposing a similar civilian real cost, the authors found. NBER published “Export Controls and the Economics of National Security” by Jingting Fan, Kyle Handley and Nuno Limão in October 2026, without specifying a day.
Other countries replaced only 7% of the reduction in controlled exports under multilateral restrictions, compared with 28% under unilateral U.S. policy, the paper said. The authors found that multilateral controls cut adversaries’ imports of controlled products far more than unilateral U.S. restrictions.
Even a U.S. embargo failed to reproduce the security outcome achieved through multilateral controls in the authors’ model, the paper said. The comparison measured security through U.S. real military expenditure relative to that of adversaries, rather than through the decline in controlled exports alone, the authors said.
Multilateral restrictions reduced adversaries’ real military expenditure by raising their military price index, the paper said. The authors linked that result to how trade and production adjusted across countries after governments restricted access to controlled goods.
The research combined new data on U.S. export control classifications and licensing outcomes with a quantitative general equilibrium model, the authors said. The supplied publication text did not specify the period covered by those data.
The model incorporated production of dual-use goods, input-output linkages and separate civilian and military final expenditure, the paper said. Those features allowed the authors to examine export restrictions alongside production relationships and the distinct expenditure needs of civilian and military users.
The authors estimated large frictions affecting exports and entry arising from the controls, the paper said. Those effects were substantially smaller for U.S. exports to members of multilateral export control regimes, with the difference equivalent to an export cost of 15 to 29 log points.
The policy comparisons used a counterfactual without differential controls on adversaries, the authors said. Their findings therefore compared modeled outcomes under different control arrangements against that benchmark.
Export controls aim to limit adversaries’ access to goods that contribute to military capability, but their effectiveness depends on adjustments across countries, the paper said. The authors’ results pointed to multilateral coordination as producing greater security gains at a similar civilian real cost.
The findings represent the authors’ views and do not necessarily reflect those of NBER, the paper said.
