Following the Russian invasion of Ukraine in February 2022, many governments have pledged to boost military spending and bolster armed forces. Poland, for example, plans to increase spending from 2.1 per cent of gross domestic product (GDP) to 3.0 per cent, starting in 2023. This builds on an existing trend that saw worldwide military expenditure rise to an all-time high of US$2.1 trillion in 2021. As more funds are being funnelled into military activities, the question of transparency in military budgeting processes looms larger than ever. What types of military capabilities are being prioritized? How are finite fiscal resources being allocated? These questions help taxpayers, civil society or interested citizens to identify whether the increase in the military budget is in line with the stated security needs. In the spirit of full transparency, all governments ought to produce comprehensive, detailed and accurate information on military budgeting and actual spending, and make it available to the public.
The SIPRI Military Expenditure Database provides annual aggregated military spending data, by country, sourced mostly from official government documents. However, it does not contain disaggregated military spending data, meaning it does not break down spending figures into different categories, such as personnel or procurement expenditure. Currently, due to issues surrounding data availability and standardization, there exists no comprehensive database that compiles disaggregated military spending data, although such a database could offer insight into the composition of military expenditure and priorities in military planning.
This backgrounder—in a first step towards addressing this gap—explores the practice of disaggregation in military budget reporting as one aspect of transparency in military expenditure. It shows that just over half of the countries (99 out of 175) with armed forces provide disaggregated budgetary information, and within this subset, there are wide disparities in the level of disaggregation. The backgrounder begins by explaining what disaggregated military spending data is and elucidating its importance. It then provides an overview of how many countries provide this type of data, as well as a few case studies to compare varying levels of disaggregation. Implications for transparency in military expenditure are discussed in the outlook at the end.
Defining and contextualizing disaggregated military expenditure data
Disaggregated military spending data refers to the categorical budget itemization or breakdown of military expenditure figures by function or service branch. Governments allow insight into how the military budget is divided between different types of spending by providing such data. Disaggregated data can show, for instance, how much funding is allocated to the acquisition of military ships, to salaries for staff in the ministry of defence or to the operational costs of the ministry of defence.
There exists no universal obligation on countries to publish disaggregated figures, much less a standard for how to do so. Governments determine how much they disclose and how they break down the budget. Some countries provide detail down to the funding appropriated for the purchase of uniformed clothing, whereas other countries publish only a single figure for military expenditure.
That said, there have been attempts at the international level to standardize the reporting of disaggregated military spending data. As part of an annual exercise, which culminates in the publication of the ‘UN Report on Military Expenditures’, the United Nations Secretariat collects forms detailing spending on the military, submitted voluntarily by member states. These forms are divided into service branch (e.g. army, air force, navy and other forces) and function (personnel, operations and maintenance, procurement and construction, and research and development). However, at the time of writing only 30 UN member states have submitted information on their military spending for 2021.
Disaggregation can contribute to transparency in military expenditure by offering insight into the allocation of resources to specific types of military activities. Disaggregation is important because it allows civil society to determine whether budget allocations were made in accordance with a country’s defence policy, its security needs and its expenditure goals. Civil society is then able to identify any warning signs of possible resource mismanagement, waste or corrupt spending practices. In addition, disaggregation enables analysts to trace spending figures more accurately between defence planning documents, initial and revised budgets and actual expenditure reports in cases where a government reports military spending figures at all three reporting stages (i.e. initial budget, revised budget and actual spending). This allows analysts to identify possible changes in spending priorities and the justifications thereof.
Assessing the availability of disaggregated military spending data
So, how do governments measure up? In total, there are 175 countries in the world that maintain armed forces. Of these, 99 provided disaggregated military spending data in their national budget documents for the 2021 financial year. This amounts to just over half, or 57 per cent, of armed states. Countries were counted as publishing disaggregated military expenditure data if the top budget line was divided into at least three categories comparable to the categories in the ‘UN Report on Military Expenditures’.
However, the availability of disaggregated spending data for 2021 differs from region to region (see table 1). All countries in North America and Western Europe disclosed disaggregated data. Countries in Central Europe rank second with a reporting rate of 94 per cent. A large majority of countries in Oceania and South America also disclosed disaggregated spending, with reporting rates of 83 per cent and 67 per cent, respectively.
Among the regions with the least transparent reporting practices were Central Asia with no countries reporting disaggregated data, the Middle East with 20 per cent, North Africa with 25 per cent, and Central America and the Caribbean and East Asia both with 33 per cent. In the middle tier were Eastern Europe (43 per cent), South East Asia (45 per cent), South Asia (50 per cent), and sub-Saharan Africa (55 per cent).
The analysis carried out for this backgrounder used the Global State of Democracy Indices developed by the International Institute for Democracy and Electoral Assistance (IDEA) to factor regime type—democracy, hybrid regime or authoritarian regime—into the assessment of disaggregated military expenditure data, and a clear trend emerged. Democracies were far more transparent in the release of disaggregated military expenditure data than hybrid or authoritarian regimes. Among those countries categorized as high-performing democracies, 100 per cent published disaggregated military expenditure figures whereas 19 per cent of authoritarian regimes published disaggregated figures. Of those countries categorized as hybrid regimes, 52 per cent reported disaggregated military spending data. There appears to be a clear relationship between democratization and the disclosure of disaggregated military expenditure figures. Research indicates that governments that are least likely to disaggregate military budgets and make them available to the wider public are also among those that lack checks and balances and are most prone to corruption.
Examining the extent of disaggregation of military spending data
Most countries provide some level of disaggregated military expenditure data in their official government documents. However, there are notable variations in the level of disaggregation. Disaggregation ranges from encompassing just three or four categories up to multilevel breakdowns that present spending figures by programme, function and branch of the armed forces. The following case studies highlight the variety in levels of disaggregation.
No disaggregated data: Kazakhstan
Kazakhstan does not provide disaggregated military spending data. Kazakhstan’s Ministry of Finance’s historical budget tables state only the overall defence figure; there is no breakdown by activity or force structure. The country has announced its aim of developing its domestic military–industrial complex. However, there is no way to assess whether future budget allocations reflect this strategic objective or how funds are being spent. Therefore, the lack of disaggregation in the military budget could become a matter of contention.
Minimal disaggregated data: Afghanistan
Afghanistan does not report detailed aggregated figures and therefore occupies the lower end of the spectrum of disaggregation. In the national budget decree for the 2021 financial year, resources made available to the Ministry of Defence are divided into three categories: wages and salaries, use of goods and services, and acquisition of assets (see table 2). There is no further level of disaggregation—although for 2021 the government did disclose how much of each budget line was funded through foreign grants. A closer inspection of the budget decree also reveals that 23 per cent of Afghan military spending is not disaggregated at all but is reported as ‘defense nowhere else classified’ (see source for table 2).
Moderate disaggregated data: Malaysia
In its 2022 official government budget, Malaysia published its military budget for 2021 disaggregated into categories such as personnel, services and supplies, other operating expenditure, and development expenditure (see table 3). This is a moderate level of disaggregation and Malaysia’s budget highlights another common issue that can make the analysis and comparison of disaggregated military spending more challenging. Malaysia, much like other governments, uses several definitions and categories that, even though they appear to be similar to those used in budgets of other countries and in the submission forms for the ‘UN Report on Military Expenditures’, are country specific. This can make the budget difficult to interpret and can mean that readers need to make assumptions when assessing the Malaysian military budget. For instance, it is unclear what exactly falls under ‘grants and fixed charges’ or ‘other expenses’.
Highly disaggregated data: South Africa
Due to its level of detail, the official South African military budget is a model example of transparency of information and, in particular, of the disaggregation of military spending figures. South Africa publishes three military budget documents (budget, revised budget and actual spending report), which it divides into eight programmes, including ‘administration’, ‘landward defence’, ‘air defence’, ‘maritime defence’, ‘defence intelligence’ and ‘military health support’. Each of the eight programmes is further disaggregated into subprogrammes and economic classifications (see table 4).
Highly disaggregated data: Germany
Germany is an example of a country with highly transparent military expenditure reporting, with a military budget plan that spans 166 pages and 11 chapters. The budget plan provides spending figures for activities ranging from the acquisition of A400M transport aircraft to reimbursements for religious communities that provide spiritual services to troops (see table 5). Chapter budget lines give a total spending figure for that category and a breakdown for individual budget items. Compared with the other case studies, this is a highly disaggregated budget. In addition to the high level of detail in its domestic reporting, Germany also submits information to the ‘UN Report on Military Expenditures’, thereby applying a standardized method for reporting different types of military expenditure and offering some uniformity in reporting.
The cases above demonstrate that even among the states that provide disaggregated military budgets there are wide differences in the level of disaggregation. This ranges from minimal disaggregation in the case of Afghanistan to multilevel budget breakdowns in the case of Germany. Clear, detailed and disaggregated budget documents allow for meaningful oversight by civil society or entities mandated to assess the effective use of resources by the military and state. Such documents also provide insight into spending priorities.
Outlook
Transparency in military budgeting, including the disaggregation of spending data, is vital for responsive governance, accountability and international confidence building. Transparency must be a priority as governments boost military spending to hedge against existing and emerging threats. Currently, over half of countries worldwide publish disaggregated military spending data. This allows members of civil society to trace the allocation of financial resources and hold the budgetary process to account.
However, many countries still provide only single-figure data on military expenditure. This limits the exchange between budgeting authorities and civil society as it prevents constituents from having insight into the levels of investment in defence and security, and means that constituents cannot provide feedback on whether they consider the spending to be reasonable and cost-effective. The lack of information makes the budgeting process less responsive, and institutions cannot be held accountable. This holds particularly true for authoritarian regimes, which, as discussed above, are simultaneously the least likely to provide disaggregated spending data and the most prone to corruption and misuse of funds.
For countries that do not provide disaggregated military budgets, it is up to civil society and parliamentarians to apply pressure on them to release disaggregated military spending information. On the other hand, countries with disaggregated military budgets should be applauded for their transparency but should still be assessed continually for improvement in terms of detail and standardization. To assist in the above, an essential next step is to monitor developments in disaggregation in military spending in the coming year and provide a publicly available list of countries outlining the differences in levels of disaggregation.
ABOUT THE AUTHOR(S)
Alexandra Marksteiner was a Researcher in the SIPRI Military Expenditure and Arms Production Programme.
Dr Nan Tian is a Senior Researcher and Programme Director of the SIPRI Military Expenditure and Arms Production Programme.
Alexander Kaplan was an intern with the SIPRI Military Expenditure and Arms Production Programme.
Following the Russian invasion of Ukraine in February 2022, many governments have pledged to boost military spending and bolster armed forces. Poland, for example, plans to increase spending from 2.1 per cent of gross domestic product (GDP) to 3.0 per cent, starting in 2023. This builds on an existing trend that saw worldwide military expenditure rise to an all-time high of US$2.1 trillion in 2021. As more funds are being funnelled into military activities, the question of transparency in military budgeting processes looms larger than ever. What types of military capabilities are being prioritized? How are finite fiscal resources being allocated? These questions help taxpayers, civil society or interested citizens to identify whether the increase in the military budget is in line with the stated security needs. In the spirit of full transparency, all governments ought to produce comprehensive, detailed and accurate information on military budgeting and actual spending, and make it available to the public.
The SIPRI Military Expenditure Database provides annual aggregated military spending data, by country, sourced mostly from official government documents. However, it does not contain disaggregated military spending data, meaning it does not break down spending figures into different categories, such as personnel or procurement expenditure. Currently, due to issues surrounding data availability and standardization, there exists no comprehensive database that compiles disaggregated military spending data, although such a database could offer insight into the composition of military expenditure and priorities in military planning.
This backgrounder—in a first step towards addressing this gap—explores the practice of disaggregation in military budget reporting as one aspect of transparency in military expenditure. It shows that just over half of the countries (99 out of 175) with armed forces provide disaggregated budgetary information, and within this subset, there are wide disparities in the level of disaggregation. The backgrounder begins by explaining what disaggregated military spending data is and elucidating its importance. It then provides an overview of how many countries provide this type of data, as well as a few case studies to compare varying levels of disaggregation. Implications for transparency in military expenditure are discussed in the outlook at the end.
Defining and contextualizing disaggregated military expenditure data
Disaggregated military spending data refers to the categorical budget itemization or breakdown of military expenditure figures by function or service branch. Governments allow insight into how the military budget is divided between different types of spending by providing such data. Disaggregated data can show, for instance, how much funding is allocated to the acquisition of military ships, to salaries for staff in the ministry of defence or to the operational costs of the ministry of defence.
There exists no universal obligation on countries to publish disaggregated figures, much less a standard for how to do so. Governments determine how much they disclose and how they break down the budget. Some countries provide detail down to the funding appropriated for the purchase of uniformed clothing, whereas other countries publish only a single figure for military expenditure.
That said, there have been attempts at the international level to standardize the reporting of disaggregated military spending data. As part of an annual exercise, which culminates in the publication of the ‘UN Report on Military Expenditures’, the United Nations Secretariat collects forms detailing spending on the military, submitted voluntarily by member states. These forms are divided into service branch (e.g. army, air force, navy and other forces) and function (personnel, operations and maintenance, procurement and construction, and research and development). However, at the time of writing only 30 UN member states have submitted information on their military spending for 2021.
Disaggregation can contribute to transparency in military expenditure by offering insight into the allocation of resources to specific types of military activities. Disaggregation is important because it allows civil society to determine whether budget allocations were made in accordance with a country’s defence policy, its security needs and its expenditure goals. Civil society is then able to identify any warning signs of possible resource mismanagement, waste or corrupt spending practices. In addition, disaggregation enables analysts to trace spending figures more accurately between defence planning documents, initial and revised budgets and actual expenditure reports in cases where a government reports military spending figures at all three reporting stages (i.e. initial budget, revised budget and actual spending). This allows analysts to identify possible changes in spending priorities and the justifications thereof.
Assessing the availability of disaggregated military spending data
So, how do governments measure up? In total, there are 175 countries in the world that maintain armed forces. Of these, 99 provided disaggregated military spending data in their national budget documents for the 2021 financial year. This amounts to just over half, or 57 per cent, of armed states. Countries were counted as publishing disaggregated military expenditure data if the top budget line was divided into at least three categories comparable to the categories in the ‘UN Report on Military Expenditures’.
However, the availability of disaggregated spending data for 2021 differs from region to region (see table 1). All countries in North America and Western Europe disclosed disaggregated data. Countries in Central Europe rank second with a reporting rate of 94 per cent. A large majority of countries in Oceania and South America also disclosed disaggregated spending, with reporting rates of 83 per cent and 67 per cent, respectively.
Among the regions with the least transparent reporting practices were Central Asia with no countries reporting disaggregated data, the Middle East with 20 per cent, North Africa with 25 per cent, and Central America and the Caribbean and East Asia both with 33 per cent. In the middle tier were Eastern Europe (43 per cent), South East Asia (45 per cent), South Asia (50 per cent), and sub-Saharan Africa (55 per cent).
The analysis carried out for this backgrounder used the Global State of Democracy Indices developed by the International Institute for Democracy and Electoral Assistance (IDEA) to factor regime type—democracy, hybrid regime or authoritarian regime—into the assessment of disaggregated military expenditure data, and a clear trend emerged. Democracies were far more transparent in the release of disaggregated military expenditure data than hybrid or authoritarian regimes. Among those countries categorized as high-performing democracies, 100 per cent published disaggregated military expenditure figures whereas 19 per cent of authoritarian regimes published disaggregated figures. Of those countries categorized as hybrid regimes, 52 per cent reported disaggregated military spending data. There appears to be a clear relationship between democratization and the disclosure of disaggregated military expenditure figures. Research indicates that governments that are least likely to disaggregate military budgets and make them available to the wider public are also among those that lack checks and balances and are most prone to corruption.
Examining the extent of disaggregation of military spending data
Most countries provide some level of disaggregated military expenditure data in their official government documents. However, there are notable variations in the level of disaggregation. Disaggregation ranges from encompassing just three or four categories up to multilevel breakdowns that present spending figures by programme, function and branch of the armed forces. The following case studies highlight the variety in levels of disaggregation.
No disaggregated data: Kazakhstan
Kazakhstan does not provide disaggregated military spending data. Kazakhstan’s Ministry of Finance’s historical budget tables state only the overall defence figure; there is no breakdown by activity or force structure. The country has announced its aim of developing its domestic military–industrial complex. However, there is no way to assess whether future budget allocations reflect this strategic objective or how funds are being spent. Therefore, the lack of disaggregation in the military budget could become a matter of contention.
Minimal disaggregated data: Afghanistan
Afghanistan does not report detailed aggregated figures and therefore occupies the lower end of the spectrum of disaggregation. In the national budget decree for the 2021 financial year, resources made available to the Ministry of Defence are divided into three categories: wages and salaries, use of goods and services, and acquisition of assets (see table 2). There is no further level of disaggregation—although for 2021 the government did disclose how much of each budget line was funded through foreign grants. A closer inspection of the budget decree also reveals that 23 per cent of Afghan military spending is not disaggregated at all but is reported as ‘defense nowhere else classified’ (see source for table 2).
Moderate disaggregated data: Malaysia
In its 2022 official government budget, Malaysia published its military budget for 2021 disaggregated into categories such as personnel, services and supplies, other operating expenditure, and development expenditure (see table 3). This is a moderate level of disaggregation and Malaysia’s budget highlights another common issue that can make the analysis and comparison of disaggregated military spending more challenging. Malaysia, much like other governments, uses several definitions and categories that, even though they appear to be similar to those used in budgets of other countries and in the submission forms for the ‘UN Report on Military Expenditures’, are country specific. This can make the budget difficult to interpret and can mean that readers need to make assumptions when assessing the Malaysian military budget. For instance, it is unclear what exactly falls under ‘grants and fixed charges’ or ‘other expenses’.
Highly disaggregated data: South Africa
Due to its level of detail, the official South African military budget is a model example of transparency of information and, in particular, of the disaggregation of military spending figures. South Africa publishes three military budget documents (budget, revised budget and actual spending report), which it divides into eight programmes, including ‘administration’, ‘landward defence’, ‘air defence’, ‘maritime defence’, ‘defence intelligence’ and ‘military health support’. Each of the eight programmes is further disaggregated into subprogrammes and economic classifications (see table 4).
Highly disaggregated data: Germany
Germany is an example of a country with highly transparent military expenditure reporting, with a military budget plan that spans 166 pages and 11 chapters. The budget plan provides spending figures for activities ranging from the acquisition of A400M transport aircraft to reimbursements for religious communities that provide spiritual services to troops (see table 5). Chapter budget lines give a total spending figure for that category and a breakdown for individual budget items. Compared with the other case studies, this is a highly disaggregated budget. In addition to the high level of detail in its domestic reporting, Germany also submits information to the ‘UN Report on Military Expenditures’, thereby applying a standardized method for reporting different types of military expenditure and offering some uniformity in reporting.
The cases above demonstrate that even among the states that provide disaggregated military budgets there are wide differences in the level of disaggregation. This ranges from minimal disaggregation in the case of Afghanistan to multilevel budget breakdowns in the case of Germany. Clear, detailed and disaggregated budget documents allow for meaningful oversight by civil society or entities mandated to assess the effective use of resources by the military and state. Such documents also provide insight into spending priorities.
Outlook
Transparency in military budgeting, including the disaggregation of spending data, is vital for responsive governance, accountability and international confidence building. Transparency must be a priority as governments boost military spending to hedge against existing and emerging threats. Currently, over half of countries worldwide publish disaggregated military spending data. This allows members of civil society to trace the allocation of financial resources and hold the budgetary process to account.
However, many countries still provide only single-figure data on military expenditure. This limits the exchange between budgeting authorities and civil society as it prevents constituents from having insight into the levels of investment in defence and security, and means that constituents cannot provide feedback on whether they consider the spending to be reasonable and cost-effective. The lack of information makes the budgeting process less responsive, and institutions cannot be held accountable. This holds particularly true for authoritarian regimes, which, as discussed above, are simultaneously the least likely to provide disaggregated spending data and the most prone to corruption and misuse of funds.
For countries that do not provide disaggregated military budgets, it is up to civil society and parliamentarians to apply pressure on them to release disaggregated military spending information. On the other hand, countries with disaggregated military budgets should be applauded for their transparency but should still be assessed continually for improvement in terms of detail and standardization. To assist in the above, an essential next step is to monitor developments in disaggregation in military spending in the coming year and provide a publicly available list of countries outlining the differences in levels of disaggregation.
ABOUT THE AUTHOR(S)