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September 16, 2011 |  2 comments |  Print | E-Mail Your Opinion  

Can Lower Budgets Produce Greater Security Efficiency?

Christopher M Schnaubelt: Disparate political realities among European states will make integration of national forces difficult. But defense ministries can cut costs by streamlining personnel, developing capable reserves, abstaining from new missions and investing in long-term training and education.

I am afraid I must be the skeptic in the bunch. Security is a classic collective action problem in which distributing the burden is not made easier by shrinking the resources that are available to contribute to the collective good in question. For NATO and the EU, the problem is compounded by different perceptions regarding current or potential threats - some members are greatly concerned about Russia while others feel no threat from it at all - and wide disparities in how the burden is shared.

While allegations that “Europe” is free-riding on the United States still attract the most attention in the academic literature and popular commentary, much greater realization is becoming apparent regarding asymmetries between the European members themselves. In the NATO ISAF mission in Afghanistan, for example, in terms of the size of population, armed forces and gross domestic product, several European states are carrying a proportional burden as great as or greater than that of the US (e.g. Denmark, Estonia, and Norway). Yet others, most notably France, Germany, Greece, Italy, Spain, and Turkey, are not matching their ISAF contributions to their military and economic capabilities. These political realities mean that austerity will very likely mean much less security overall.

Making the debate even more complex is the problem of accurately identifying the tradeoffs and probable outcomes to enable a comparison of various policy and budgetary options. When a private enterprise cuts back, there is a basic indicator of whether reorganization is increasing efficiency: financial profit. It is a relatively straightforward question to determine whether a business is making more money, or at least reducing the rate at which it is losing money – but what are the tangible security outcomes when there are no profits to measure? How does one assess changes in the value of security in comparison to changes in defense budgets?

Nevertheless, there are several principles that would be useful in helping to maintain security capabilities despite budget cuts: 

  • Flatten organizations and reduce overhead. Decisions on where to cut budgets are made at higher headquarters, which will be subject to bureaucratic pressures and natural human tendencies to protect one’s own position and those of immediate subordinates and colleagues. Avoid a bias towards protecting those at the top: the reductions in headquarters personnel and budgets should generally be greater than, or at a minimum proportional to, those at lower levels.

  • Develop capable reserves, trading time for cost. Reserve forces are less costly than those on active duty. However, they require additional training to bring them up to the same readiness level as active forces. The needed amount of time is an element of risk that policy makers and strategists must consider when determining the capability of the total defense force. Furthermore, reserve units must be frequently tested to ensure their capabilities are accurately assessed and understood.

  • Reduce the appetite for new missions. The majority of analysts had been predicting that an era of reduced defense budgets was beginning and thus Afghanistan would probably be the last expeditionary operation for NATO. Then, the mission in Libya emerged and put great stress upon the capabilities of several allies – to the point of public discussion as to whether they would be able to logistically support their combat operations if the mission continued much longer. Policy makers, or perhaps more importantly their domestic publics, need to understand that cuts in defense budgets must also produce reductions in security ambitions.

  • Don’t sacrifice long-term capability development just because it seems easier. A natural human tendency is a bias towards the present. Cutting long-term investment in areas such as training and education, new equipment fielding, and research and development may appear to be simple tradeoffs that will reduce the near-term pain. However, the needs of tomorrow must be considered as well as those of today. Otherwise, the failure to adequately invest in these areas now could mean that the future force will lack sufficient capability to deter future competitors and meet future threats. 

It is theoretically possible that sovereignty and trust issues can be overcome to allow bold initiatives such as specialization and pooling equipment amongst allies to succeed. Regardless, significant attention should be paid to more mundane organizational transformation approaches such as those outlined above. These offer the most realistic chance of mitigating the effects of austere defense budgets.

Dr. Schnaubelt is Transformation Chair at the NATO Defense College in Rome, Italy. These opinions are his own and not the official position of NATO or the US Government.

Related articles from Atlantic Community's "Security Despite Austerity" theme week:

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Comments
Paul-Robert  Lookman

September 19, 2011

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Bravo for an author who is brave enough to start his discourse with the one-liner: “…I must be the skeptic in the bunch”. The title of his piece however seems to be misleading. Where he makes comparisons with businesses, the reality is that enterprises improve efficiency of their organizations in order to achieve a cost reduction, and to keep in line with the competition. It's not the other way around. In the defence environment, there is virtually no competition to the US military and NATO. What is missing is a benchmark. Businesses redefine their activities from time to time through zero budgeting: redefining the organization needed to meet market opportunities. Likewise, the US military and NATO should perhaps go back to the drawing board, list realistic threats - not the inflated ones we have been fed the last few decades – and build a military on that basis. A military strictly for defensive tasks, not the offensive operations that we have seen during the last few decades.

The author bluntly states that the fact that certain European NATO members underspend on defence in relative terms “will very likely mean much less security overall”, but he fails to substantiate that claim against real threats. Where the author speaks about different threat perceptions within NATO, Russia is only a part of that equation. To borrow from Stephen M. Walt (“Is NATO irrelevant?”, http://walt.foreignpolicy.com/posts/2010/09/24/is_nato_irrelevant), the ill-fated Afghan adventure will have divisive long-term effects on alliance solidarity.

The one part in his piece that everyone will agree with is “Reduce the appetite for new missions.” Taxpayers have never seen a cost/benefit analysis of the various military missions of the last few decades, where – to compare with the business environment – shareholders rightly demand this type of information and hold management to account. A comparable scrutiny of the military would be very healthy. Without accountability, “domestic publics” will never accept “that cuts in defence budgets” will “also produce reductions in security ambitions”. The “needs of tomorrow” must be presented to publics in a credible way. Who is calling for “sufficient capability to deter future competitors and meet future threats” if the average taxpayer does not perceive “competition” or “threats” to the same extent as politicians and military decision makers?
 
Alexander Michael Shorrock

September 19, 2011

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In a similar vein to the post above, a complete re-think regarding NATO's role and purpose should bring about reduced spending.

Regarding the appetite for offensive missions, I think this is something that is widely accepted by everyone. The U.S. were very wary about entering Libya, as they forsaw a drawn-out and costly conflict.

The Conservatives in the UK were constantly 'advised' by their DoD leaders that the RAF could not cope with further operations besides those already undertaken in the Gulf if their budget would continue to be cut. Perhaps drawing a parallel with France, both leaders decided that action against Gadaffi, whilst bad on the bank balance, would be good on polls. Both Cameron and Sarkozy have had a tough time with their respective electorate and used the conflicts to spur on a Margaret Thatcher type boost in ratings.
In that regard, it is not governments' blindness towards the cost of further operations, rather their view on how far costs should direct their actions over other factors.

With further unrest possible in the Middle East, it is time for governments such as those of the UK and France to reaffirm their objectives. Whilst Libya may have been an important statement, what will these governments do when rebels in other dictatorships start a plea for help? NATO will no doubt feel obliged to assist, but will the forerunners of the Libya campaign start the ball rolling a second time?
 

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