Transcript Defence Spending How Much is Enough?

Defence Spending
How Much is Enough? *
David Chuter
*Answer on slide 14
How Much is Enough?
• You can never say how much
is enough
• You can sometimes say how
much is too much
How Much is Enough?
• Is there a relationship between
Defence spending and the health
of the economy?
• Is it possible to spend too
much?
How is Defence spending
fixed?
• Government spending is not
determined rationally
• Anything can be afforded if you
really want it
• It’s a political bargaining process
How Much is Enough?
Have you ever heard a General
or an Admiral say that they
have enough men, enough
money and enough
equipment?
How is Defence spending
fixed?
• Unlike most other types of
spending, Defence spending is
based on fear and uncertainty and
guesses about possible futures.
• So you would not expect it to be
rational anyway
Things that Influence the size of
the Defence budget
• Political strength of Ministers
• Influence of the Military
• Strength of Parliament
• Opinions of Allies
• Economic theories
• International Opinion
• War and Crisis
Things that don’t (usually)
influence the Defence budget
• Logical argument
• Economic arguments
• Rational assessment of needs
• Experience
So how is a Defence budget
set?
• Usually you start from last
year’s budget
• The Defence Ministry asks for
more
• The Finance Ministry wants less
• A political decision will be taken
Not a very Rational Process
But is there something
we can do about it?
Defence budget problems
• Lack of control over major projects
• Procurement decisions taken for
political reasons
• Real Cost Growth/Relative Price
Effect
• Political decisions to deploy forces
• Inflation and currency fluctuations
Making the Best Use of Money
• Policy and Programme must go
together
• Keep the Centre strong
• Avoid military rivalries
• Understand how to achieve political
objectives
• Be ruthless
The End
Thank You
Questions?