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Investment Expenditures of NATO Member States as a Share of Overall Defense Spending (%) Source: Adapted, based on NATO. 2016.
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The aim of this paper is to identify, design and classify general instruments applicable to stabilize development in defense spending as one of the decisive prerequisites of a long-term maintenance and development of national defense capabilities. Based on analyses of approaches implemented in the former Czechoslovakia and later in the Czech Republ...
Context in source publication
Context 1
... 86 % percent aim at operational and personnel expenditures. Figure 3 bel- low illustrates the situation in investment expenditures. The overall misbalance is even strengthened by the fact that in the long term the USA have spent app. 25 % of their defense expenditures on investments (SIPRI 2016). ...
Citations
... The biggest military expenditure increase as a share of GDP can be seen in the new member states following their accession to the Alliance, namely Lithuania, Latvia, Estonia, and Bulgaria. The accelerating trend can be observed especially immediately after the 2014 NATO Summit in Wales, which confirmed the original allied obligation (see Holcner and Olejnícek 2017;Odehnal and Neubauer 2020). Non-excludability from collective capacity to resist an armed attack is stipulated in Article 3, with the result that not all the allies behave like followers, i.e., countries reflecting military expenditure of other member states in their spending. ...
The aim of the article is to identify possible “follower” behaviour; it means to reveal countries following the average military burden of North Atlantic Treaty Organization (NATO) member states. To analyse the relationship between military expenditure of NATO member states and selected socio-economic variables (average military burden of NATO member states, gross domestic product, government expenditure (non-military), share of trade balance of gross domestic product and population), the Autoregressive Distributed Lag model has been used. The short-term results demonstrate follower behaviour, especially in the new NATO member states (effort to fulfil the commitment to spend 2% of gross domestic product on defence). The long-term results have revealed a positive relationship between military expenditures and the variable describing the average military burden of NATO member states in the traditional and also new NATO member states. A positive relationship between military expenditure and gross domestic product has also been observed in the majority of evaluated countries in the long-term model. The public good effect has been determined in six member states only, and the crowding out effect in five member states. A positive effect of the balance of trade on military expenditure has been observed in two countries only.
... To stabilize national defence spending is one of the decisive prerequisites of a long-term maintenance and development of national defence capabilities and security (Holcner & Olejníček, 2017). Facing global and regional conflicts and tensions posing threats to the national security, all countries in the world, especially the so far biggest spenders, are increasing military spending on arm procurements (Bem, 2015a&b). ...
Despite being governed by one party, the Vietnam Communist Party (VCP, Party), there are
many political options for national economic development and national security of Vietnam. But predominantly there are two opposing political camps within VCP. One represents pro-China orientation and the second represents pro-USA orientation as USA and China are the two biggest political and economic powerhouses in the world and that will remain for decades. Naturally, pro-USA and pro-China stance guarantee different interests for the VCP and the nation. The article will analyze the advantages and disadvantages in each of these political options and proposes solutions to keep the strategic balance between them for the purpose of internal stability and sustainable development.
... National defense spending To stabilize national defence spending is one of the decisive prerequisites of a long-term maintenance and development of national defence capabilities and security (Holcner & Olejníček, 2017). Facing global and regional conflicts and tensions posing threats to the national security, all countries in the world, especially the so far biggest spenders, are increasing military spending on arm procurements (Bem, 2015a&b). ...
Despite being governed by one party, the Vietnam Communist Party (VCP, Party), there are many political options for national economic development and national security of Vietnam. But predominantly there are two opposing political camps within Party. One represents pro-China orientation and the second represents pro-USA orientation as USA and China are the two biggest political and economic powerhouses in the world and that will remain for decades. Naturally, pro-USA and pro-China stance guarantee different interests for the Party and for Vietnamese nation. The article will analyze the advantages and disadvantages in each of these political options and proposes solutions to keep the strategic balance between them for the purpose of internal stability and sustainable development.
... To stabilize national defence spending is one of the decisive prerequisites of a long-term maintenance and development of national defence capabilities and security (Holcner & Olejníček, 2017). Facing global and regional conflicts and tensions posing threats to the national security, all countries in the world, especially the so far biggest spenders, are increasing military spending on arm procurements (Bem, 2015a&b). ...
Despite being governed by one party, the Vietnam Communist Party (VCP, Party), there are
many political options for national economic development and national security of Vietnam.
But predominantly there are two opposing political camps within VCP. One represents pro�China orientation and the second represents pro-USA orientation as USA and China are the
two biggest political and economic powerhouses in the world and that will remain for decades. Naturally, pro-USA and pro-China stance guarantee different interests for the VCP and the nation. The article will analyze the advantages and disadvantages in each of these political options and proposes solutions to keep the strategic balance between them for the purpose of internal stability and sustainable development
... Similar classification of variables can be seen in (Bel and Elias-Moreno 2009;Dunne and Perlo-Freeman 2003;Dunne and Nikolaidou 2001;Odehnal and Neubauer 2020). In general, military expenditure decrease can be expected when economies experience economic downturn accompanied by relatively low security risks, which corresponded to the situation in the majority of European NATO member states during and immediately after the economic crisis (Holcner and Olejníček 2017;Odehnal and Neubauer 2015;Holcner 2019;Tao et al. 2020). ...
The article presents the use of the ARDL model to identify military expenditure determinants of the Baltic States (Lithuania, Latvia, and Estonia). Factors influencing military expenditure include the variables characterizing the economic environment of the analyzed countries (GDP per Capita, Government Deficit/Surplus, General Government Gross Debt, Inflation), and the security environment measured by Risk of Foreign Pressures, Risk of Cross-border Conflict, and Democratic Accountability. General conclusions about the analysis of relationships between the military expenditure level and selected economics and security determinants were confirmed in the cases of Government Deficit/Surplus, GDP per Capita and Inflation. The results, therefore, indicate that the military expenditure of Estonia and Lithuania depended on the state budget deficit where military expenditure tended to go down in relation to an increasing deficit within the assessed period. As far as Estonia is concerned, the findings about relationship between the economic position and military expenditure was validated as an increasing economic performance tended to increase military expenditure.
... The economic crisis which affected the Czech Republic together with the increasing public finances deficit and the public debt intensified pressure for further reduction of expenditures. Therefore, military expenditure 1 fell especially in 2010 (see Figure 1 -left) and kept falling until 2013 (more detailed in Holcner and Olejnicek (2017)). This longterm underfinancing endangers the fulfilment of roles and functions of the armed forces of the 1 The SIPRI (Stockholm International Peace Research Institute) definition of military expenditure includes all current and capital expenditures on the following activities: the armed forces (including peace-keeping forces), the civil administration of the military sector (defence ministries and other government agencies engaged in defence activities), paramilitary forces (nonregular armed forces trained, equipped and available for military operations), military space activities. ...
Within the EU, the economic environment of the Czech Republic belonged to dynamically developing environments characterized by an above-average speed of economic growth. The economic crisis affected the Czech Republic via a decline in domestic and foreign demand, reflecting in the slowing speed of economic growth. The growing deficit of public finances, together with growing indebtedness, made the government accept a number of anti-crisis measures lying in the regulation of the income and expense side of the state budget. The military expenses as a part of government expenditure were considerably reduced during the economic crisis and currently they form only 1.1% of the GDP. The current change in the security environment provoked a debate on long-term underfinancing of the department of defence in the Czech Republic and acknowledging the responsibility for the country´s security. Measures accepted in consequence of the changing perception of security threats will contribute to increasing military expenses to at least 1.4% of the GDP in 2020. The contribution focuses on military expenditure modelling and its economic determinants using the Autoregressive Distributed Lag (ARDL) model. This model is applied to economic data of the Czech Republic over the period 1993-2018. To quantify the determinants of military expenditure, the authors selected data from the database of the Czech Statistical Office defining economic determinants of the military expenditure. For modelling, the following macroeconomic and fiscal variables were used: gross domestic product per capita, inflation, government deficit, government debt. According to the estimated model, the authors compute and simulate possible future development of Czech military expenditure.
... From the long-term point of view, only a small group of the 29 countries fulfills the recommended values of allocating 2% of GDP at a minimum in favor of defense. The issue of military spending and its link to economic variables, political stability or other country characteristics is still intensively discussed in defense economic literature, see for example [1], [2], [3] or [4]. This paper has provided an empirical analysis of the determinants of military spending in the selected NATO countries for the period from 2001 to 2016. ...
... The existence of long-run level relationship can be verified by so calle F-bound test in the model (4). The results are shown in Table 5. ...
... Safety and security are issues of contemporary concern (e.g. Holcner, Olejníček, 2017;Genys, Krikštolaitis, 2017;Tumalavičius, Greičius, 2017;Trofimovs, Ivančiks, 2017). Thsese issues are multi-faceted therefore embrace various topics, belonging e.g. to economical relationships field or to human rights field. ...
Section 2 of the Constitution of the Republic of Lithuania establishes the basic human of our society security rights. In accordance with the basic law of our state human has a right to life, health, freedom, personal integrity, property and other rights. The law enforcement agencies of the Republic of Lithuania, including the police play a major role in realizing these rights in protecting these human values. From which responsibility for performing duties in many cases belongs to the quality of the protection of the said constitutional values in our society and the comfortable, easy staying in Lithuania of each person. However, how to find the optimal model of the relationship between the society and the police, so that each side - the public and its institution, the police would be interested in legal relations - the society should encourage its authority to carry out safety functions, responsibly and willingly, and the police has to ensure proper human security. In this article, possible model of legal services between police and society based on free market (supply and demand) principles is analyzed. Based on free market principles and pairing its elements - supply and demand with law elements - duty and right. Upholding the idea, that free market is an optimal and the most rightful way of cultural exchange, theoretically attempting to model legal relations in free market principles to achieve the most rightful exchange of legal services between society and police, while at the same time meeting security needs of society.
Introduction. The national security of the Russian Federation, both within the country and externally, is ensured by the development of its military-technical potential. The military-technical potential is viewed as an ability of the state to maintain the armed forces and to provide the army with modern and competitive military equipment. This is performed through state defence orders (SDOs). Taking into account both internal and external factors, it is impossible to fulfil SDOs without a reliable system of contract liabilities. To ensure proper fulfilment of SDOs, it is necessary to consider the following measures: 1) to retain all the liabilities of contracts for the duration of the contracts, i.e. the liabilities of the customer with regard to the financing of SDOs, and the liabilities of the contractor with regard to the production of the military equipment of high quality; 2) to prevent unauthorised use of the financing provided for the SDOs. Purpose. The purpose of our study was to analyse the factors preventing the fulfilment of SDOs and suggest measures for improving the system for managing SDOs and the economic security of defence industry enterprises. Methodology. In our study we used general scientific methods and specific economic analysis methods: systems analysis, time series analysis, modelling, and expert evaluation methods. The analysis was based on Russian and international sources, as well as the regulatory and legal framework concerning SDOs. Results. In our study, we listed and classified the factors preventing the fulfilment of SDOs, and suggested a SDO model in the form of a system of financial relations between entities. To ensure the fulfilment of SDOs, we suggest a series of measures to control the compliance of financial flows and the economic security of defence industry enterprises. Conclusions. The article presents a specific study of financial flows between the key participants of SDOs. The determined problems and suggested measures will help to reduce the risks and ensure the proper fulfilment of SDOs.
