Military assistance is a perennial feature of international relations. Such programmes typically aim to improve the effectiveness of local partners, exporting the donor’s way of war through the provision of training and equipment. By remaking indigenous armies in their own image, donors likewise hope to mitigate the profound agency costs associated with the transfer of military capability. But, while technical and organisational transformations can provide notable battlefield advantages, the philosophies underlying such innovations are not so easily propagated. Instead, new tactics, structures and technologies typically intersect with pre-existing local schemata of war, producing novel if sometimes dysfunctional hybrid praxes. According to principal-agent theory, the application of greater conditionality in the provision of military assistance should improve the fidelity of military diffusion, aligning agents’ divergent interests with their principals’ goals. In practice, however, principal-agent exchanges rarely exist in isolation. Examining the modernisation of nineteenth-century Japan as a case study in military diffusion, this paper argues that competition between rival patrons allows recipient states to play would-be principals off against each other, bypassing conditionality by replicating a marketplace for military assistance. In so doing, however, agents trade functionality for sovereignty in their military diffusion.