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 paper examines the economic determinants of military modernisation within the Central Northern European Military Mobility Area (CNE MMA) from 2010 to 2024. Using correlation analysis and linear models for panel data, the paper investigates the relationship between Gross Domestic Product (GDP) growth and expenditures on military equipment and infrastructure across eight member states. Furthermore, the article defines the roles of individual states within the military mobility capability across European territory. A significant contribution of this work, which distinguishes it from existing literature in the field, is the assessment of the specific relationship between economic growth and defence infrastructure investments. While most research focuses on aggregate military spending, this study isolates infrastructure investment as a critical enabler of strategic mobility. The findings reveal a significant infrastructure decoupling in major powers like Germany and Poland, where equipment procurement crowds out infrastructure investment despite rising budgets. Conversely, frontline state like Lithuania demonstrates synchronized spending. The study concludes that current prioritisation of equipment over infrastructure creates strategic risks for rapid force deployment. The primary contribution lies in the disaggregated analysis of dual-use infrastructure within the CNE MMA framework, providing actionable insights for balancing fiscal allocation to ensure logistical resilience in contemporary geopolitical conditions.