Defense Economics Research Articles

Human resource management in the armed forces: An investigation into the monetary incentive systems for military personnel

How do the armed forces pay and compensate military personnel? In this article, this question is addressed by investigating the monetary incentive systems in place in the armed forces in twelve NATO and NATO-partner countries. The primary objective is to understand how the armed forces, in a variety of advanced countries, structure their compensation and personnel policies. The countries’ monetary incentive systems are analyzed and compared using a Request for Information distributed by the Norwegian Ministry of Defence to NATO and NATO-partner countries. The secondary objective is to motivate the research community in the nexus between personnel economics and defense economics to study monetary incentives in the armed forces in a cross-national perspective. There is great potential to learn from the experiences of compensation policies in other armed forces.

On What Topics Does the Scientific Community Cooperate in Defense Economics? A Science Mapping of the First 30 Years of the Journal Defence and Peace Economics

ABSTRACT The academic journal Defence and Peace Economics, which celebrated its pearl jubilee in 2024, is acknowledged as the leading journal in defense economics, bringing together a scientific community of authors from a diverse array of countries. We conduct a bibliometric study using science mapping to analyze the evolution of author networks and research themes within the journal from 1994 to 2023. Analyzing 1069 articles, our findings reveal a growing internationalization of the journal, alongside an increasing diversification of topics. However, we observe a decrease in the rate of international co-authorship during the most recent period of our analysis, i.e. 2019-2023. The core of the publications remains focused on military spending and its interconnection with economic growth. Moreover, our analysis points to themes related to technology, innovation, and R&D in the defense industry as research opportunities.

Research-Based Learning for Developing Certain Skills of Future Military Officers

Today’s world is incredibly dynamic and constantly evolving. Rapid technological advances, vast information resources, changing market conditions and intense competition are forcing the acquisition of new skills. The primary mission of General Jonas Žemaitis Military Academy of Lithuania is to train, educate and inspire competent, motivated and educated Lithuanian officers leaders to lead in today‘s and tomorrow‘s battle field. Therefore, special attention is paid to developing the skills of future military officers, using innovative learning methods, which encourage participation and engagement in the study process. This publication focuses on the role of research-based learning in developing the certain skills of future military officers. To this end, the author draws on a comparative analysis of the scientific literature and on her personal experience of integrating researchbased learning into assignments of Defence Economics course. The author hopes that sharing her experience of using researchbased learning in the study process will encourage other lecturers to evaluate the possibilities of applying this method in their taught subjects.

The dangers of sharing knowledge with friends: the FSX Controversy and the use of US export controls against Japan in the 1980s and 1990s

ABSTRACT This article places the US–Japanese controversy over the co-development of the FSX jet fighter in the context of US debates about ‘economic security’. During the 1980s, this concept became the widely used shorthand for describing a new calculus of national security and foreign economic policy, closely linking defense economics, competitiveness in commercial global markets and the crucial role of dual-use technologies in both spheres. The article shows that the dangers of sharing dual-use know-how were at the heart of the US security concerns in the FSX case, prompting the US government to use export controls – during the Cold War the sharpest economic weapon against the Eastern bloc – against its close ally Japan.

Corruption From The Perspective Of Defense Strategy

This research aims to analyze corruption crimes from the perspective of defense strategies using the theories of defense science, defense economics, and corruption. The research method used is qualitative literature study by collecting literature sources as research data classified according to the established research formula. The background of this research is the ongoing problem of corruption in Indonesia, which does not provide a deterrent effect for corrupt actors, resulting in significant negative impacts and losses for the state, as well as weakening defense. The results of the study show that defense strategies can be used as a way to reduce corruption in Indonesia by integrating defense science, defense economics, and corruption theories. Effective defense strategies can minimize the risk of corruption and enhance national resilience. Essentially, the support of national defense, in the face of corruption crimes, demands the implementation of Defense Strategies in accordance with the applicable regulations.

Economic Effects of Investment in Defense Research and Development and its Impact on Productivity in Developed Countries

This work is based on the hypothesis that a country’s technological development and innovation in the security and defense sector is a critical factor for developing high-tech industries and thus promoting the country’s competitiveness. This research seeks to establish a correlation between defense economics (DE), security investments in research and development (R & R&D), and the generation of value-added products in high-tech industries from 2009 to 2018, based on models used in the United States, China, and Japan. Quantitative, descriptive, and non-experimental research was implemented to conduct a statistical verification. This contributed to determining the connection between value-added productivity (VAP) indicators related to investments in R&D, the Competitiveness Index, value-added industries, and high-technology exports creating a correlation between the DE indicator and investments in research discovering positive relationships among these variables.

Defense Economics in Indonesian “Semesta” War Strategy

The strategy of the Semesta War is part of an Indonesian National Defense System. The purpose of this study is to show that the strategy of the Semesta War was not a total war and was not just a guerrilla war, although guerrilla tactics were part of it. It is also different from the People’s War from Mao’s Strategy. So, what is Semesta War looks like? We can understand this strategy from Indonesian History. A Trikora operation was the largest military strike Indonesia had ever planned and titled, with the aim of a massive attack on the Dutch military forces in the land of West New Guinea. But rather than showing the Semesta War Strategy succeeded, The studies will show the impact of the Semesta War strategy from a Defense Economics perspective. The writing employs historical methods of heuristic criticism consisting of internal and external criticism and the historiography of history in which interpretation, exposition, and presentation from a literature study of the writings of the perpetrators of Trikora history. The results suggest that operation Trikora is one of the implementations of the Indonesia Semesta War Strategy, it was successful to achieve its strategic goal, but, with expensive sacrifice.

Management of human resources in national defense depend on defense economics point of view

Indonesia is a country with abundant human resources but the number of military forces does not match with population and area. This paper aims to explain how the role of human resources as the main in the country's defense efforts to support the national economy because human resources (HR) is the most crucial resource and the element that determines the development of civilization, including the aspect of national defense. The method used is a descriptive qualitative method with a literature study research approach by collecting information from journals, books, and other media to obtain topic-related materials. The result of this writing is that it can be concluded that the competence of a systematic and professional state defense management and implementation system is necessary to face threats to state defense, it is necessary to develop the strength and capabilities of state defense including the development of human resources, natural resources, artificial resources, facilities and infrastructure, technology, and defense industry as well as a value system to improve capabilities defense of the country and support the national economy.

Defense Economic Strategy in Creating the Independence of the Indonesian Defense Industry (Case Study of the Independence of the Chinese Defense Industry)

Efforts to build an independent defense industry is a strategic goal in strengthening national identity. The aim of this research is to find out the Defense Economic Strategy in Realizing the Independence of the Indonesian Defense Industry. The results of the study show that one indicator of the independence of the defense industry is to produce its own defense and security equipment without any intervention from other countries. The Indonesian government must be able to make the independence of China's defense industry a spirit model for the development and independence of the Indonesian defense industry by consolidating and strengthening capital for the domestic defense industry, increasing competitiveness in producing defense products in global trade competition, and conducting collaborative technology transfer cooperation. to increase the ability of the national defense industry to realize the independence of the defense industry.

Chinese Defense Industry Reforms and Military Firm Performance: Evidence from the Civil—Military Integration Strategy

ABSTRACT In March 2015, the Chinese government initiated an important reform program targeting the defense industry, namely civil–military integration (CMI), with the objectives of introducing military technologies to the civilian market and infusing private capital into military enterprises. On examining this unique exogenous shock in a 2007-2017 sample of Chinese A-share listed firms, we identify the following effects of CMI on military firms’ performance. (1) The market value of military firms significantly increases after the establishment of the CMI policy in 2015 and the market value of military firms is on average 6.682% higher after 2015. (2) This effect is robust to propensity score matching, instrumental regression, alternative measures of corporate market value. (3) The positive impact of CMI on military listed firms’ market value is stronger for firms with lower innovation ability and weaker corporate governance, suggesting that the CMI policy can improve the research and development abilities and ease the agency conflicts of military firms. (4) After 2015, military firms with weaker financial constraints and those located in provinces with lower marketization levels perform better. Overall, offering a micro-perspective on military firms, this paper complements the growing literature on defense economics and clarifies how CMI improves military firms’ performance.

MICRO, MACRO, MONETARY, AND FISCAL SECTORS OF INDONESIAN ECONOMICS DEPEND ON DEFENSE ECONOMICS

Indonesia as a developing country, has good awareness of the importance of national development in many aspects. The national development process includes the developments of micro, macro, monetary and fiscal sectors. These factors have affected the allocation of resources, distribution of income, economic growth, and stabilization related to military defense. This paper aims to describe the Indonesian economic condition in 2022 from the defense economics perspective. The method used in this paper is a qualitative literature study with a descriptive and narrative approach. The conclusion is that the Indonesian economic current condition from the micro and macro sectors shows a good development. Furthermore, the policies taken by the government in the monetary and fiscal sectors are considered to be able to stimulate economic recovery. From the defense economics point of view, this condition must be accompanied by conducive country security so the public welfare can be stable

Pengembangan Kajian Ekonomi Pertahanan di Indonesia Melalui Studi Narasi Arkeologi dan Filologi Terkait Kerajaan Mataram

This study is part of the study of narrative psychology, a science that studies how historical stories shape the influence of current human behavior if and someone's personality shapes their lives. The role of inherited manuscripts for storing information about life in the past, for the present life gave birth to the need for maintenance and utilization. In a number of the manuscripts described it can be understood that there is a content that turns out to be used in the development of studies in the realm of defense economics. Research and development of archeology so far has produced data that can be divided chronologically into three (3) periods, namely the Prehistoric, Classical (Hindhu-Buddhist) period, and the Islamic and Colonial periods. Each period is divided into several aspects of research. The results of archeology research and development can be utilized for the public interest, especially those related to the past reconstruction of values ​​which are very useful for human life now and for generations to come. Archeological research and development can be used to develop defense economy studies that are in accordance with the character and identity of the Indonesian people. Defense economics continues to develop as a reflection of the problem of allocation of resources and of course each country has its own perspective on facing the challenges of defense economic issues. In general, the dissemination of economic studies on defense can be approached from when a large conflict occurs. The contemporary defense economy is more interested in working on those related to conventional, ethnic and conflict wars including revolutions, civil wars and long wars.

Education for Sustainable Defence and Security

The aim of the article is to analyse the challenges facing education in "Economics of Defence and Security", implemented by the Department of National and Regional Security at the University of National and World Economy in Sofia in the transition to sustainable defence and security. The main tasks of the research are to: outline the need for transition to education for sustainable defence and security; present a vision for sustainable defence and security and the adoption of an integrated holistic approach to security; offered a vision of what educational change and practical measures are needed to build sustainable defence and security.

The impact of military expenditures on out of pocket healthcare payments: international evidence based on a dynamic panel data analysis

PurposeThe empirical analysis dealt in this paper emphasizes on the impact of military expenditures on out of pocket (OOP) healthcare payments. A sizeable body of defence economics literature has investigated the trade-off between military and public health expenditure, by testing the crowding-out or growth-stimulating hypothesis; does military expenditure scaling up crowd-out or promote governmental resources for social and welfare programs, including also state health financing?Design/methodology/approachIn this study, panel data from 2000 to 2018 for 129 countries is used to examine the impact of military expenditure on OOP healthcare payments. The dataset of countries is categorized into four income-groups based on World Bank's income-group classification. Dynamic panel data methodology is applied to meet study objectives.FindingsThe findings of this study indicate that military expenditure positively affects OOP payments in all the selected groups of countries, strongly supporting in this way the crowding-out hypothesis whereby increased military expenditure reduces the public financing on health. Study econometric results are robust since different and alternative changes in specifications and samples are applied in our analysis.Practical implicationsUnder the economic downturn backdrop for several economies in the previous decade and on the foreground of a potential limited governmental fiscal space related to the Covid-19 pandemic adverse economic effects, this study provides evidence that policy-makers have to adjust their government policy initiatives and prioritize Universal Health Coverage objectives. Consequently, the findings of this study reflect the necessity of governments as far as possible to moderate military expenditures and increase public financing on health in order to strengthen health care systems efficiency against households OOP spending for necessary healthcare utilization.Originality/valueDespite the fact that a sizeable body of defence economics literature has extensively examined the impact of military spending on total and public health expenditures, nevertheless to the best of our knowledge there is no empirical evidence of any direct effect of national defence spending on the main private financing component of health systems globally; the OOP healthcare payments.

Demand for Military Expenditures and Security Alignment Choices in the Indo-Pacific

ABSTRACT We explore the possibilities and limitations of models of the demand for military expenditures, as against additional kinds of cross-country analyses, with an empirical focus on the Indo-Pacific region. Our research bridges a gap between the Defence Economics and International Relations literatures by developing testable security alignment hypotheses and by testing these hypotheses in three ways: with demand modelling on total expenditures, with analyses on estimated stocks of imported armaments, and with qualitative analyses of trends in defence cooperation between states. We find consistent evidence across research methods of an increase in threat perceptions towards China since around 2012 and of balancing behaviour by US allies and by two non-allies. As compared to standard demand modelling, our hypothesis-based mixed methods approach allows for a clearer treatment of samples with mixed and shifting security alignments and of states that stabilise or reduce expenditures in the face of rising threat perceptions.

The Indonesian Government's Defense Economic Program for the Small Business Economy During the Covid-19 Pandemic for Economic Resilience

The Indonesian government always pays attention and focuses on the context of economic recovery during the Covid-19 Pandemic to MSMEs so that they are able to rise from adversity and be able to reabsorb workers who have lost their jobs during the COVID-19 pandemic. Many businesses, especially Micro, Small and Medium Enterprises, went bankrupt and closed their businesses due to demand from consumers who fell free. This study uses the strategy theory of Lykke, 1989 which includes 3 (three) aspects of Ends, Ways and Means, with descriptive qualitative methods. various strategies. This paper aims to discuss the importance of the Government's Strategy in helping Micro, Small and Medium Enterprises during the COVID-19 pandemic in order to survive and continue to increase their business in supporting Indonesia's economic resilience. The results achieved are the need to improve strategies on Ways, including the right strategy starting with a regulatory framework and incentives in the form of policies in legislation, government regulations that are comprehensive and sustainable in helping the MSME sector to survive and get out of difficulties during the Covid pandemic. -19 so that it can support the economic resilience of the Indonesian people and nation.

Indonesia's Defense Economic Program in the Context of Food Security, Overcoming the Impact of the Covid-19 Pandemic and Anticipating the Impact of Climate Change

Apart from the Covid-19 pandemic, there are other threats that will be faced by countries around the world, including Indonesia, namely climate change. The threat of climate change is predicted to cause a worldwide food crisis. One of the government programs through the ministry of defense is the food estate program. This study aims to analyze the strategies used by the government in the development of food estates in strengthening the national economy. This research is qualitative. The data collection technique was carried out using a literature review. The author relates the discussion to the strategy theory proposed by Carl Von Clauswitz. There are 3 war strategies used by Napoleon Bonaparte in battle and his war experience, namely Means, Way, and Ends. Based on this research, the results show that there are 3 strategies used by the government in the development of food estates. The first strategy is Means, which is the government's efforts to develop food estate by providing land resources to be developed into a special sector for food estate development. The second strategy is the Way, the Government designs a business model that will be used from the production of food estate development for the recovery of the national economy. The third strategy is Ends, namely the development of food estates based on law number 3 of 2002 concerning national defense. Keywords: Defense Economy, Food Estate, Government, Development, National Economic Recovery, Strategy DOI: 10.7176/JESD/12-23-04 Publication date: December 31 st 2021

The Political Economy of Turkish Foreign Policy

ABSTRACT In recent years, Erdogan’s rising authoritarian tendencies at home coincided with the hardening of his positions in the country’s foreign relations. From Libya to Syria to Greece to Iraq to Azerbaijan, and yes, even to Israel, Turkey’s actions have been at least controversial and have also led to increased tensions with Cyprus, Egypt and Greece over the EastMed maritime zones, but also with faraway geopolitical players. The article tries to explore the material foundations of current Turkey’s assertive foreign policy, focusing on the main country’s economic indicators, defence capabilities and defence economics. By comparing Turkey’s economic potential and defence capabilities with regional players but also with some other middle or even great powers such as England, France, Italy and Russia, the analysis shows that Turkey’s aggressive international behaviour is not only the outcome of a new nationalist rhetoric but is based on some facts and data that should not be overlooked.

Implementation of Trade-off, Local Component, and Offset Policy Pt. Pindad (Persero) in Supporting the Defense Economy

The fundamental problems in economic development in Indonesia are the low level of welfare, unsustainable economic growth, and the inadequate development process of economic sectors. Defense Economics is a branch of science that applies economics to national defense issues. Defense economics as a multidisciplinary study discusses resource allocation, income distribution, economic growth, and political stability as applied to topics related to defense. One of the efforts of the Indonesian government in increasing the capability of the defense industry is to implement a trade-off, local component, and offset policy also known as IDKLO. The Indonesian government in carrying out this mechanism has formed a cooperation with various industrial bodies, locally and internationally such as PT. Pindad (Persero). In carrying out its duties, PT. Pindad (Persero) experienced several obstacles for instance the limitations on the company's high technology mastery in building defense equipment, the availability of funding, and inadequate human resources regarding technical and academic matters. The purpose of this study was to find out how the implementation of the IDKLO policy was carried out by PT. Pindad (Persero) in developing the defense industry. The data collection process is carried out through a literature review method on scientific articles, laws and regulations, as well as PT Pindad's (Persero) annual report related to the IDKLO for the procurement of defense equipment. The results show that the implementation of PT Pindad's (Persero) (IDKLO) is divided into 3 main activities, namely the Ministry of Defense contract with the principal, the principal contract with the defense industry, and the completion of the local component and offsets (KLO) contract. Several variables to support the implementation of PT Pindad’s (Persero) IDKLO are the ability to communicate, its resources, the bureaucracy, and the disposition which could improve the capability of the defense industry of the Republic of Indonesia.

THE ROLE OF DEFENSE ECONOMIC IN ECONOMIC GROWTH

<p class="Els-history-head">The fundamental problems in economic development in Indonesia are the low level of welfare, unsustainable economic growth, and the inadequate development process of economic sectors. Defense economics is a branch of science that applies economics to national defense issues. Defense economics as a multidisciplinary study discusses resource allocation, income distribution, economic growth, and political stability as applied to topics related to defense. According to the defense economy, the impact of the use of the defense budget on the economy can be viewed from the demand or consumption and supply or production approaches. From the consumption side, the defense can protect national resources against various threats, so that national consumption becomes stable and even increases. This research uses role theory according to Biddle and Thomas, among others, Expectation, Norm, Performance, and Evaluation. The research objective is to provide government input on the importance of the economic role of defense in economic growth in Indonesia. Research using qualitative methods is aimed at understanding social phenomena from the perspective of the participants. The result that has been achieved is that the defense economy plays a role in improving security stability, so it is recommended that the government pay attention to defense-security spending budgeting, in particular the adequacy of its allocation, priority level, and linkages between other components</p>