A Better Way to Measure Returns on U.S. Security Cooperation Investments

Security cooperation has been a primary tool of the U.S. military to counter terrorist groups and compete with the likes of China and Russia. Given the billions of dollars the Pentagon spends annually on security cooperation activities, it’s worth asking what the Defense Department gets in return..

The 2018 National Defense Strategy called for “reforming the department’s business practices for greater performance and affordability.” One way to  measure security cooperation is return-on-investment analysis. Although that seems like an obvious approach, our experience indicates that return on investment is both a misguided way of thinking and an unworkable metric for security cooperation activities. 

As an alternative, we propose a mixed-methods evaluation framework and communication tool, which can provide stakeholders in the U.S. government and Congress a better sense of the returns from security cooperation activities.

Why return on investment does not work as a metric for security cooperation

Return-on-investment analysis is appealing for its simplicity, but conducting such analysis of security cooperation activities is either impossible or inherently unsatisfying for four primary reasons: returns are non-monetary and generally not quantifiable, costs are unmeasurable, the measurement uses the wrong unit of analysis, and returns are difficult to compare across security cooperation activities. 

First, while return on investment is an attractive cost-benefit analysis for the business sector, a calculation of financial return on monetary investment is the wrong concept for measuring security cooperation outcomes. International security cooperation “returns” are the degree and quality with which desired outcomes are achieved in alignment with strategic objectives. In the near term, those objectives involve improved cooperation and interoperability with partners. In the long term, security cooperation activities aim to build partner capacity, provide the U.S. military access to allies and partners, and create partnerships that ultimately benefit U.S. strategic objectives. These items are not monetary, and in most cases they are not quantifiable. 

Second, even if the returns were quantifiable, the real costs of security cooperation for the U.S. military are often unmeasurable. For example, past analysis indicates that the structure of the Navy’s cost accounting system makes it impossible to know the full, exact cost of any security cooperation deployment or activity. Additionally, there is opportunity cost in every decision about security cooperation. In Washington, the focus in recent years has been on realigning resources for great power competition. However, each geographic combatant command has dozens of partners. How, for example, can one accurately calculate the real and opportunity costs of conducting a bilateral exercise with Brazil as opposed to Colombia; or even with the UAE navy versus the UAE armed forces? 

Third, return on investment focuses on the wrong unit of analysis. By trying to quantify the costs and returns of isolated security cooperation activities, evaluations fail to capture the full context of security cooperation with U.S. partners. The U.S. conducts security cooperation as integrated, iterative, or mutually supporting activities that involve multiple countries or multiple elements of a single country. For example, providing a patrol craft, training a crew, and exercising patrol operations are all discrete security cooperation activities, but which is responsible for building a partner’s maritime patrol capability—and can any of these activities achieve that desired outcome without the others? The outcomes of these activities are therefore not an additive result of individual security cooperation activities, but oftentimes a multiplicative one, further reducing the utility of return on investment as a useful tool.

Fourth, in the business sector a common desired outcome is larger profits—regardless of the nature of any particular business. This does not translate to security cooperation. On the contrary, U.S. military commands have numerous desired outcomes that nest into broader U.S. strategic objectives. A tool for measuring a single numerical outcome—as return on investment does well for financial returns—is not compatible with the multi-faceted outcomes that security cooperation activities seek to achieve. 

If not return on investment, then what?

In our experience, U.S. military leaders ask for return on investment analyses of security cooperation because they require an analytically rigorous yet manageable tool to both plan internally and communicate effects to other stakeholders—including geographic combatant commands, the Pentagon, the State Department, and Congress.

We agree that monitoring the outputs and outcomes of security cooperation activities and reporting them clearly and concisely is necessary, but we find the return-on-investment approach to be the wrong tool for the job. A better solution is a mixed-methods approach that combines quantitative and qualitative data. Because security cooperation outcomes are not financial gains, we view the “returns” on security cooperation investment as outcomes in alignment with strategic objectives. To measure the effects of these activities properly, we propose a framework that focuses on strategic objectives, alignment, and outcomes. 

A framework focused on these elements allows military commands to compare findings from individual security cooperation engagements or to compare subsequent iterations of an annual engagement. Our framework includes a quantitative component and a qualitative one. First, we compute a quantitative alignment score, which is a combination of partner participation and strategic objectives addressed by a security cooperation activity. The objective alignment score is as simple as tallying the number of command strategic objectives addressed by the security cooperation activity. The combination of the partner participation score and the objective alignment score produces a numeric value of alignment with strategic objectives.

Our framework’s qualitative outcomes assessment ascertains the success of the security cooperation activity in increasing capacity or changing partner behaviors to meet objectives. This process includes defining the desired outcomes of strategic objectives, collecting periodic data on indicators of those outcomes, and concisely summarizing findings. Partner militaries, U.S. embassies, and military commands already collect much of the required data—though not systematically. Using this framework, the command could assign personnel to pull this information, or task an external organization to conduct the data collection.

By combining these quantitative and qualitative components into a single tool, our assessment framework generates a display of security cooperation activities’ strategic objectives alignment, progress toward achieving objectives, and overall assessment. Though not as simple as return on investment, it displays far more—and more relevant—data for security cooperation in an easily readable table that a command can share with key stakeholders at regular intervals. 

Zack Gold, Ralph Espach, Douglas Jackson, and Nicholas Bradford are researchers in CNA’s Strategy, Policy, and Plans division, where they have conducted numerous evaluations of security cooperation activities for the U.S. military in recent years. The views expressed here are those of the authors and do not necessarily reflect those of CNA or any of its sponsors.