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I'm only here for a little bit this time, but I'd like to clear this up.   The F-20 was always designed to be generally more capable than the F-16A/B except in raw low speed acceleration (if the F100s held together) and payload/range at altitude.  In fact, in many ways it was the equal of and in certain areas superior to the F-16C/D.  However, the Carter policy opposed offering such a capable aircraft, saying that nations of a certain category needed to be satisfied with lesser capability aircraft, hence the F-16/79 which generated zero interest.  Northrop disguised the Tigershark by asking it to be designated the F-5G, implying that it was simply an F-5E with some changes when it reality it was a lot more.  All Carter's policy did was insult potential allies, who just planned to go elsewhere.  Reagan's policy was more realistic.   GD could now offer F-16 A/Bs (and maybe C/Ds to a few).  Northrop now could openly promote the Tigershark's full potential and wanted to get away from the image of a "duded up" F-5E, so petitioned for a new aircraft designation.  The next one in sequence was F-20, so that's what they got. 


Why the F-20 didn't sell  is a story for another place, but it wasn't because of a niche disappearing or its capabilities relative to the F-16


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