What are the benefits, costs, and risks associated with arms imports and exports? A substantial, though dated, body of literature examines the value of participation in the defense trade for both importers and exporters. Yet the resulting conventional wisdom regarding consequences—such as dependence, leverage, and economic development—is increasingly met with skepticism. Nuanced theoretical investigation and rigorous empirical analysis can clarify the value and implications of defense sales. Important areas of focus include dynamics of dependence and political leverage, the subsidizing effects of defense sales on domestic acquisition (e.g., reductions in per-unit costs), spillover effects on the economy and political system, and the economic, political, diplomatic, and social conditions in which defense sales can become a strategic enabler or liability.