Defense Financing Research Articles

Військові видатки найбільш впливових країн світу в період воєнних дій в Україні

Instability in the world makes it necessary to strengthen the military security of countries by modernizing armies, increasing armaments, using innovative technologies, which requires an in-crease in military expenditures. Such measures necessitate the restructuring of the economy, refor-matting of business in various branches of economic activity. And this question becomes relevant not only in those countries that are involved in the war, but also in neighboring countries and countries that have an influence on the world economy and politics. The purpose of the article is to study the trends in the volume of military expenditures for the period 2014-2022 in a number of countries that have the greatest influence on the world economy and politics. Currently, the United States, China, and Russia have the largest share of global arms expendi-tures. These countries are among the top five largest exporters of major types of weapons for 2018-2022. The top ten largest exporters of major types of weapons over the past five years include the highly developed countries of Europe - members of the "Big Seven": Germany; France; United Kingdom; Italy. US military spending fluctuated somewhat and was the lowest in 2017, but it began to grow al-ready in 2018. China has been increasing its defense budget every year in a row, and the constant in-crease has been going on since 1995. In Russia, these expenses decreased the most in 2017, slightly in 2018 and had the smallest volume this year. However, already in 2019, Russia's defense budget in-creased by 4.5%, and in 2022 by another 9.2%. A decrease in defense funding in Great Britain was observed in 2015-2016, and in subsequent years there is a tendency to increase it. Germany is char-acterized by a constantly growing trend with a slight decrease only in 2021. In France, an insignifi-cant decrease in military expenditures was observed in 2018. Italy had the most uneven nature of de-fense financing - if in 2019 a drop in expenditures by 2.7% was observed, then in In 2020, the in-crease was 22.8%. The study of the defense expenditures of these countries for the period 2014–2022 confirms that their volumes were determined both by the war in Ukraine and by the political situation in each country in particular.

Does the government's defence funding bill really only create an unenforceable political commitment?

The article is devoted to the draft law on defence financing, which aims to oblige the government to allocate an amount of at least 2% of GDP to defence in every draft law on the state budget. During the inter-ministerial comment procedure, the Supreme Audit Office expressed doubts whether the draft means anything more than an unenforceable political commitment in relation to the Chamber of Deputies". The article convincingly demonstrates, with the help of legal argumentation and interpretation of the Constitution of the Czech Republic, the Rules of Procedure of the Chamber of Deputies, as well as the established case law of the Constitutional Court of the Czech Republic, that if approved, the Chamber of Deputies will also be bound by the Defence Financing Act when approving the state budget. To do otherwise would violate constitutionality.

Komparativna analiza troškova sistema odbrane Republike Srbije i zemalja članica NATO-a

By analysing the current state of the budget funds that are allocated for financing the defence system of the Republic of Serbia, on the one hand, the paper presents theoretical knowledge about budget process, and, on the other hand, the comparative analysis of the costs of the defence system of our country and the defence costs of neighbouring countries and some NATO member states has been conducted. Due to the specificity of the defence financing through budget allocations, and thus strict financial discipline and control, the objective of the paper is to consider the possibility of more efficient use of public expenditure funds, both through the perspective of planning and executing budget in the defence system. Furthermore, the problems in budget execution, the necessity of good planning and adequate distribution of budget funds, as well as the importance of having a favourable structure of the defence expenditure has been emphasized, in order to improve the current situation in the Ministry of Defence and the Serbian Armed Forces. The conclusions of the conducted research indicate that a long-term success in the accomplishment of goals in terms of expenditure management and effective resolution of open items can only be achieved by defining and implementing an appropriate financial strategy

Legal Reconstruction on the Use of Philantrophic Funds in Supporting State Defense Financing

The collection of public philanthropic funds, especially in financing the national defense sector, has not been clearly regulated, but in the Indonesian context it has considerable potential so that it requires regulations to regulate it. The purpose of this research is to find out how the financing of state defense is in the regulations that govern it currently in Law number 3 of 2002 concerning National Defense, Law number 34 of 2004 concerning the TNI, Law number 23 of 2019 concerning Management of National Resources for Defense. Next, make several alternative suggestions so that philanthropic funds can be used to finance the national defense sector within the framework of Law number 17 of 2003 concerning State Finance and Law Number 1 of 2004 concerning the State Treasury.The research method in this study is normative juridical with a statutory and comparative law approach. With the results there is an opportunity to use community philanthropic funds to participate in financing the national defense sector with a grant mechanism that is still in the APBN mechanism. By looking at the large potential of community philanthropic funds, an ideal concept is proposed that regulates operationally and institutionally.

Міжнародне партнерство підприємств оборонно-промислового комплексу України: фінансово-економічні аспекти розвитку

The level of national security of the country directly depends on the needs of enterprises of the defense-industrial complex, their scientific, technical, financial and economic development. The financial security of defense enterprises and the financial security of the state as a whole is in a state of direct mutual influence. Thus, there is an urgent need to study the peculiarities of ensuring financial security at the enterprises of the defense industry and in the defense-industrial complex. The purpose of the work is to study the modern aspects of an international partnership of enterprises of the defense-industrial complex, the principles of their activities, and the financial aspects of development. The article considers the interpretations of scientists on the concepts of defense spending and financing of law enforcement agencies, considers the structure of the defense budget of Ukraine. The article considers the defense-industrial complex as an integral part of the entire military potential of the country and the industrial basis of the national security of the state. The article states that the enterprises of the defense-industrial complex produce high technologies, know-how, which can later be used in civilian sectors of the economy. International partnership of enterprises of the defense-industrial complex with NATO and the EU becomes a factor in the reform and development of the entire military-industrial complex of Ukraine. However, given the needs of the domestic defense-industrial complex, along with the processes of its structural restructuring, cooperation on technological modernization of the enterprises of the sector and the renewal of the manufactured armaments should deepen. It is also advisable to intensify cooperation in the field of space, both for military and civilian security-related purposes. A separate direction of cooperation should be the creation of a joint innovative infrastructure in the defense-industrial complex.

DEFENSE FINANCING FEATURES WITHIN THE CONTEXT OF THE NEW CHALLENGES

The beginning of the third millennium was marked by the desire of the leader countries (USA, China, and Russia) to geopolitical, geostrategic and geo-economic redistribution of spheres of influence. The collapse of the USSR, the dissolution of the Warsaw Pact Organization, the end of the Cold War did not bring the world closer to stability and security. Military force capabilities continue to be considered as one of the most powerful factors in world politics. Proof of this is the intensification of the struggle of the world›s superpowers for regional and global leadership, control over oil, gas and energy flows. It is worth mentioning the Transnistrian conflict, Russia-Led wars in South Ossetia and Abkhazia, the Russian-Georgian war in August 2008, the civil war in Syria, the intensification of Islamic extremism within the ISIS, Russia›s annexation of Crimea, the hybrid war unleashed and continues to wage by the Russian Federation against Ukraine. In this connection, it is becoming increasingly important to provide corresponding levels for the defense budget funding. Thus, the study of the peculiarities of defense financing in Ukraine and powerful military superpowers is of considerable scientific, practical and political interest. Comparing the defense expenditures of different countries makes it possible to identify key problem issues in the defense financing of Ukraine and bring the corresponding costs to international standards. This indicator is one of the most important criteria that characterize the state›s desire for development, relevant combat readiness of the armed forces and other military forces in the face of new challenges. The last years of the previous century were characterized by global geopolitical changes and growing contradictions, which resulted in: the transformation of the bipolar model (USA - USSR) into a multipolar (powerful military superpowers - the USA, Russia, China, Saudi Arabia, France, Japan, Germany, India, Brazil)); globalization of world economic processes; erosion through «hybrid wars», which are a new kind of global confrontation in today›s destabilized international security environment, the facets of the division between war and peace. The availability of weapons of mass destruction and high-precision weapons in the third millennium, the growth of their capacity, the complexity of military equipment and combat assets, the use of new methods and means of warfare have led to significant changes in the functions and tasks of the armed forces, increasing their number and government spending on defense purposes. Today there are about 200 armies in the world with a total number of 24-25 million people (about 0.4% of the world›s population) (Military..., 2002). The state of the troops of any state must correspond to its economic capabilities and at the same time ensure the implementation of national security tasks.

Features of financing NATO's armed forces

The aim of the article is to investigate the peculiarities of financing NATO's armed forces. The following methods were used in the study process: comparative analysis method, correlation analysis, content analysis. The current state of defense financing in the world and in NATO countries has been clarified. Sources of funding for civilian and military budgets and NATO security investment programs are highlighted. The civilian budget covers staff costs, operational costs, capital expenditures and expenses for the International Secretariat's programs at NATO Headquarters. The military budget covers the costs of operating and maintaining the structure of NATO military management bodies. The procedure for the payment of direct and indirect contributions to NATO content by the Allies is disclosed. The tasks of the bodies responsible for financial control over the formation and use of NATO finances are described: the North Atlantic Council, the Resource Policy and Planning Council, the Budget Committee, the Investment Committee, the NATO Independent International Audit Board. Shares of financing of civilian and military budgets, as well as NATO programs by NATO member countries, the ratio of defense expenditures to GDP in NATO countries, the share of capital expenditures in the structure of defense expenditures of NATO countries are analyzed. The volumes and structure of defense financing expenditures in Ukraine are compared with NATO countries. It is revealed that during 2014-2018 Ukraine significantly increased the amount of defense financing, at the same time the share of capital expenditures in the structure of defense spending in Ukraine remains insignificant. It is proposed to increase the share of expenditures on military investments and innovations, purchase of armaments and military equipment, construction of military facilities and, at the same time, limit the share of current expenditures on the maintenance of the armed forces.

ВИДАТКИ НА РОЗВИТОК МІНІСТЕРСТВА ОБОРОНИ УКРАЇНИ ЗА 2014 – 2020 РОКИ

The article presents and analyses the budget of the Ministry of Defense in the course of the latest years according to datawhich have been approved by the State budget of Ukraine, its state and perspectives of development, as well as the features thatit is influenced by. There’s a presented comparison of the defense budget of the Ministry of Defense of Ukraine in absolute andrelative indicators with a consideration for inflation. In every country the sector of defense in a variety of its manifestationshappens to be a powerful community that often plays a dominating and crucial role. The aspiration of the government to assurethe defense capability of the state is reflected in the adequate establishment of the military budget, the appropriate expendituresfor defense purposes, the peculiarities of their implementation under the conditions of a military conflict and its adherence tointernational norms. Due to the increase in short terms of combat capabilities of the Armed Forces of Ukraine it was possible tostop the illegal armed formations. Yet, the issue of supporting the combat capabilities of our Armed Forces due to the resourcesand finances used for its purpose remains part of the current agenda. At the current stage of development of Ukraine there ar ethe challenges to increase the defense capabilities of the state, the conduct of reforms of the Armed Forces of Ukraine as well asother military formations in accordance with the state of the art requirements and including the experience obtained in the courseof the United Forces Operation, yet also the development of the defense-industrial complex, which is necessary to satisfy theneeds of our Armed Forces to the maximum. The successful implementation of the set tasks is in a significant way dependent onthe appropriate financial support the basis of which is formed by the expenditures of the state budget. Thus, the issue ofdynamics and the structure of the expenditures mentioned as well as the identification of systematic obvious tendencies in thesphere of defense financing are a part of the current agenda, especially under the conditions of the Russian armed aggressionagainst Ukraine.

FISCAL POLICY OF RUSSIA IN THE PERIOD OF ECONOMIC GROWTH SLOWDOWN AND THE RESULTS OF 2018

Traditionally, one of the objectives of fiscal policy is smoothing the effects of fluctuations in business activity. In this connection, in the periods of recession, there should be a stimulating policy, and in the periods of recovery – restraining policy. Fiscal policy in Russia, as it’s shown in the article, is primarily procyclical. During the 2015 recession, according to the calculations using multipliers, government spending contributed to the reduction of GDP rather than to the support of its growth. Later, despite a significant increase in the revenues of the expanded government budget and the shift in priorities from defense and security financing to social sphere, the effect of the increase in budget expenditures turned out to be negative. The article also discusses the state of the budget sphere following the results of 2018, which showed the restoration of economic growth.

MODERN TENDENCY OF DEFENSE EXPENDITURES FROM THE STATE BUDGET OF UKRAINE

Introduction. At the present stage of development of Ukraine, the task is to improve the defense capability of the state, to reform the Armed Forces and other military formations in accordance with the latest requirements and taking into account the experience gained during the anti-terrorist operation, as well as to develop the defense-industrial complex, which is necessary to maximally meet the needs of the Armed Forces. The success of these tasks depends to a large extent on adequate financial support, which is based on the state budget expenditures. Therefore, the issues of the dynamics and structure of these expenditures and the identification of regular tendencies in the field of defense financing are urgent, especially in the face of ongoing aggression by the Russian Federation. The purpose of the article is to study the tendencies of financial support of defense needs at the expense of the state budget of Ukraine, to substantiate on this basis the ways of improving the financing of national defense needs of the country. Results. The article deals with the dynamics and structure of expenditures of the state budget of Ukraine for defense from the point of view of their functional, economic and programmatic systematization. The current trends in the implementation of these expenditures have been identified and the problems in this area have been highlighted. Conclusions. The ways of overcoming the negative tendencies in the field of financing of national security and defense in Ukraine through improvement of budget planning, improvement of state management in the sphere of defense, increase of efficiency of financial control, formation of civil control, use of public-private partnership in the field of defense, attraction of foreign investments defense complex, ensuring transparency in the activities of military management bodies, implementation of the best foreign experience the financing needs of the defense.

First World War impact on economic development of worldlead countries

The article is devoted to the issue of economic development of world lead countries after the First World War. The aim of investigation is the identification of regularities of the post-conflict reconstruction of national economies of the world lead countries in the interwar period and the assessment of the dynamics of national defense financing as the indicator of international tension. The authors studies the experience in reconstruction of the European economies at the end of the First World War, in particular the main activities of the League of Nations (the world first International Organization for Security and Peace) in Germany, Hungary, Estonia, Greece and Bulgaria in the interwar period are highlighted. Considering the data of military expenditures of main military and political bloc participants on the eve of the Second World War, the number of military personnel and the volume of iron and steel production during the 1920–1938, the author examines their relation with the help of correlation and regression analysis that allows to quantify the impact of these factors on the financing the defense sector.

ФІНАНСОВІ ПЕРЕДУМОВИ ТА ОЦІНКА ФІНАНСУВАННЯ ОБОРОНИ В УМОВАХ РОСІЙСЬКО-УКРАЇНСЬКОЇ ГІБРИДНОЇ ВІЙНИ

Urgency of the research. Today, humanity faces the challenge of hybrid wars - not only military aggression, but also the confrontation of financial systems. Russia's aggression against Ukraine is a starting point for the formation of the hybrid universe and violates the financial and territorial stability, causing devastating consequences for the economy. Target setting. On the eve of the developmen of the hybrid war, Ukraine was on the brink of a deep economic crisis, and defense financing was carried out on the principle of minimum sufficiency. Actual scientific researches and issues analysis. In general, studies of "hybrid wars", or as they are also called "transformational wars", "mixed wars", "multidimensional wars", "unconventional wars", "non-standard wars", were engaged by such Ukrainian and foreign scholars as Antonov A., Gilov A. ("multidimensional or hybrid war"), Glen R. ("hybrid conflict", "hybrid war"), Golovchenko V., Gorbulin V., Doroshko M., Illarionov A. ("unconventional war","non-standard war"), Klymenko S., Kreveld M., Magda E. ("transformational war"), Surkov V. ("nonlinear war"), Hoffman F. ("mixed war") and others. Selection of unexplored parts of the general problem. The essence of the modern interstate confrontation, its financial prerequisite for achievement of the corresponding political and economic goals goals is insufficiently research. The research objective. Temporal occupation by Russia of part of the territory of Ukraine and the destruction of the system of world and regional security, the principles of the international law, led to the revision and clarification of the doctrinal provisions regarding to the formation and implementation of the national security policy of Ukraine and the amount of defense financing in accordance with the new Military Doctrine. The statement of basic materials. The necessity of a rapid increase in defense expenditures through the Russian hybrid war against Ukraine in order to maintain real independence and not to become a de facto Russian satellite. Conclusions. The state of the national economy is one of the determining factors on which the amount of defense financing depends. The lack of readiness of the Armed Forces in the beginning of the hybrid war to resist the enemy is a result of chronic underfunding for decades.

Who Pays for National Defense? Financing Defense Programs in the United States, 1947–2007

Past studies on military expenditures in the United States have primarily focused on the extent to which guns versus butter trade-offs are prevalent without examining this relationship in the context of how other fiscal policy tools are used to pay for defense. Using annual data from 1947–2007, this study examines the relative importance of defense financing policy measures, such as guns versus butter trade-offs, tax increases, and deficit spending in paying for defense. The results show evidence of guns versus butter trade-off during the Reagan Era, but not during other periods. Both federal tax policy and deficit spending have played influential roles in funding defense spending during peacetime. This modeling strategy points to the importance of analyzing the effects of multiple fiscal policy tools when studying the forces that drive military spending in the United States since World War II.

Who Pays for National Defense? Financing Defense Programs in the United States, 1947-2007

Past studies on military expenditures in the United States have primarily focused on the extent to which guns versus butter trade-offs are prevalent without examining this relationship in the context of how other fiscal policy tools are used to pay for defense. Using annual data from 1947-2007, this study examines the relative importance of defense financing policy measures, such as guns versus butter trade-offs, tax increases, and deficit spending in paying for defense. The results show evidence of a guns versus butter trade-off during the Reagan Era, but not during other time periods. Both federal tax policy and deficit spending have played influential roles in funding defense spending during peacetime. Our modeling strategy points to the importance of analyzing the effects of multiple fiscal policy tools when studying the forces that drive military spending in the United States since World War II.

Defense financing of private R&D: evidences from French firms

This paper focuses on the public financing of private R&D. In France, this type of finance is mainly in the form of defense subsidies. This study brings empirical evidence on the open question of the effects of the public subsidies on private research, through analysing firms that receive R&D subsidies from the French Ministry for Defense. The paper builds different samples of firms from the available R&D and innovation surveys and evidences that the links with Defense have consequences on technological performance. Precisely, it shows that the firms benefiting from R&D subsidies exhibit a higher propensity to innovate.

Financing Defense Contracts

As defense spending continues to spiral in our national economy, more and more of industry must become involved in defense contracts. Newcomers to the government contract field seem to believe that once they secure a contract, money flows from Uncle Sam in a steady and uninterrupted stream. Such is far from true. This article will place in proper perspective the position of the federal government in the financing of defense contracts. The Bible of defense financing is a ioo-page section of the appendices found in the Armed Services Procurement Regulation (ASPR), titled Appendix E, Defense Contract Financing Regulations. All references to sections herein, unless otherwise designated, will be to that important document.

Further Remarks on Defense Financing and Inflation

Further Remarks on Defense Financing and Inflation

The Excess Profits Tax and Defense Financing

The Second Revenue Act of 1940,1 signed by the President on October 8, 1940, placed on the statute books an excess profits tax on corporations designed to help finance the national defense program and to prevent war millionnaires.2 This act was amended on March 7, 1941, to prevent unfair application of the tax in abnormal cases and to provide additional easing provisions.3 The purpose of this article is to examine this new animal, to point out the more important implications of this tax to business and to national defense financing, and its relation to economic and social policy. In this article, it will be possible to cover only the most important aspects of the problem. In general, an excess profits tax is a tax on profits which are in excess of some standard. There are several standards which

Loans Versus Taxes in Defense Financing

expenditures is, in a sense, academic, for Congress has already gone a long way toward a final decision in favor of the loan method. To be sure, there were two revenue measures enacted in 1940, but the revenue to be anticipated from these acts will not suffice to balance the predefense budget unless a far different policy is to be taken toward nonessential expenditures than has thus far been manifested. Notwithstanding the camouflage that was attempted in the First Revenue Act, to the effect that the tax increases in this Act were for defense, the fact remains that there has been, to date, no actual taxation for the defense program, nor can there be such taxation until the predefense deficit has been eliminated.

Defense Financing and Inflation Potentialities

Defense Financing and Inflation Potentialities