Generolo Jono Žemaičio Lietuvos karo akademija

This paper explores the potential applications of cost-benefit analysis in the evaluation of investments in military technology. The study assesses the limitations of cost-benefit analysis (CBA) in the defence sector and discusses ways to adapt its methodology so that it better reflects the specific characteristics of defence planning, the uncertainty of the security environment, and the operational realities of the armed forces. Using selected simplified model examples, the paper demonstrates that CBA cannot serve as a mechanical tool for optimal decision-making; however, it can significantly contribute to structuring the decision-making problem, transparently comparing alternatives, and supporting allocation-rational decision-making, including the monetization of intangible outputs in the context of defence.

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 Republic as well as in other selected European countries, the paper submits a set of measures leading to defense spending stabilization. To gather data regarding practice in individual countries a structured interviews and a questionnaire survey have been carried out, addressing subject matter experts in selected European countries. Result of this research have proven that in a number of countries the issue of defense spending stabilization has never been addressed. Based on experience of those countries that have implemented certain measures of defense spending stabilization, it seems that the optimum approach to defense spending stabilization consists of instruments that are anchored in national legislation and that enable an overall fixation (reservation of certain part of government incomes for the purpose of armed forces maintenance and modernization).