1. account the individual characteristics of each policy process. Each policy process has
unique characteristics, and there can be no linear or rigid guidelines for managing a
policy process.
This section examines four issues that are critical to a successful policy process:
1) the importance of human and institutional capacity; 2) policy communication,
dialogue, and debate; 3) policy analysis; and 4) factors influencing the decision to
conduct a major policy review. It then looks in more detail at three components of the
policy management process: 1) policy development; 2) policy implementation; and 3)
oversight.
The discussion in this section focuses on managing a major policy review
process in the security sector. The process itself can be applied to subsectoral policy
processes.
4.4.1 The Importance of Adequate Human and Institutional Capacity
Institutional and human capacity are crucial to ensuring the successful outcome
of any policy process. Policy that has been developed without taking into account
institutional and human-resource constraints will act as no more than a vision with little
long-term, operational utility. African countries experience significant human and
institutional capacity constraints throughout the public sector. These constraints are
often most severe in the security sector. As discussed in section 3.5, the capacity of
civilians in both the public and non-governmental sectors to participate fully in the
processes of policymaking, implementation, and oversight in the security sector is
extremely weak in most African countries. Perhaps ironically, security service
personnel are also often equally poorly prepared for the roles they need to play in the
policy process. In most non-OECD countries, security force personnel are unable to
assess threats, develop plans for addressing these threats, or manage the resources
allocated to them effectively and efficiently. Because of the lack of civil oversight,
security force personnel have had little or no incentive to carry out these functions
rigorously.
It is therefore critically important to conduct a realistic appraisal of the capacity of
all relevant actors to develop and implement policy. This involves asking:
 Do key actors have the knowledge and skills to fulfill the roles they are supposed to
play in the policy process? If not, are there ways of helping them acquire at least
some of the necessary knowledge and skills in the short term, for example through
mentoring arrangements or seconding knowledgeable civil society members in an
advisory capacity?
 Do key actors have access to the information they require to play their assigned
roles in the policy process? If not, what needs to be done to improve access to
information? Is this politically feasible?
 Are there major institutional impediments that will negatively affect the policy
process? If so, what can be done to alleviate them in the short term and rectify them
in the longer term?
61

2.  Do key actors have sufficient weight to participate effectively in the policy process?
If not, to what extent is it possible to alter the balance of power among key
stakeholders?
Appendix 2 contains a discussion of institutional options in managing the security sector
policy process.
4.4.2 Policy Communication, Dialogue, and Debate
A central tenet of democratic governance is that policy should be developed and
implemented in a transparent and participatory manner. That is why policy
communication, dialogue and debate are at the center of the policy process. The
formulation and implementation of policy should also operate on the basis of the
“principle of shared responsibility.” This principle dictates that participation in policy
formulation is never the prerogative of one ministry or one set of actors alone. This
diversity must be reflected in the ethos, strategy and process of the management of
policy. Thus, for example, intelligence policy should not be determined solely by the
body or bodies responsible for managing the intelligence services. Nor should input be
sought only from intelligence specialists.
Openness is required both within government and between government and the
public. All relevant governmental actors – in all branches of government – must have
access to the information they require to play their constitutional roles in the policy
process. The economic managers (finance ministry, ministry of planning and so on) are
frequently left outside security sector policy processes in African countries. In
democratic societies following sound public expenditure management practices, the
economic managers are involved from the beginning in order to help provide a realistic
financial framework for policy development and implementation.23 Members of the
public must also be adequately informed to enable them to provide input into the policy
process and to assess government implementation of policies. The South African post-
1994 experience of policy development in the security sector has suggested a number
of useful mechanisms for strengthening consultation during policy development. (See
Box 3-4.)
4.4.3 Policy Analysis
Policy analysis is the backbone of any policy process. A successful policy
process owes much to good policy analysis and the options it generates. A generic
policy analysis process consists of the following steps:
 Defining the problem.
 Identifying options.
23
Chapter 5 contains more detail on financial management of the security sector.
62

3.  Determining the consequences of each option, including impact on the budget over
the medium term.
 Predicting the outcome of each of these options.
 Making a set of value judgments from the options and the likely outcomes.
 Recommending a particular option.
Effective policy analysis requires certain skills. These include good analytical
skills (especially, the ability to reason in a logical and coherent manner and to work in a
deductive manner) as well as synthetic skills (the ability to integrate different
perspectives in a holistic manner).
4.4.4 Initiating a Policy Process
Policy is always initiated as a result of a deliberate decision and requires the
appropriate authorization or mandate from an appropriate political or departmental
head. The decision to review security policy or some portion of it will be made either by
the Cabinet or the legislature. [Is the latter correct? Do these hold for both presidential
and parliamentary systems?] In the security sector, there are four major factors that
initiate a major policy review:
1) Major shifts in the political environment within which security sector
institutions operate. These can be either internally or externally driven, and
frequently are a combination of both. The vast majority of post-1990 transformation
processes within both the developed and developing world derived to some degree
from the end of the Cold War which enabled norms such as human rights protection,
democracy, good governance, human development and human security to expand
internationally. In Sierra Leone, to take one example of a domestically-induced shift,
the war against the Revolutionary United Front made it impossible to continue to
ignore the failure of the political system to provide an environment conducive to
either human development or human security. In consequence, the government has
set out to reverse almost 40 years of security sector unaccountability to the civil
authorities.
2) Major shifts in the strategic environment within which the security institutions
operate. These may result from a fundamental shift in the regional balance of
power (the end of the Cold War) or a shift in the sub-regional balance of power (the
demise of apartheid within South Africa). They may be long-term or short-term in
nature. Shifts that appear likely to endure require a reassessment of a country’s
security environment and the roles that the security forces will play in protecting the
state and its citizens against threats of violence.
In the current African strategic context, most countries do not require armed forces
for “traditional” roles and tasks associated with defending the country against
external threats. In the future, very few African countries will have the luxury of
maintaining armed forces for traditional roles alone. Already many African armed
forces are used for a variety of non-traditional purposes such as participation in
regional security arrangements and peace missions, aid to the civil authorities during
63

4. natural disasters, delivery of humanitarian assistance, support to domestic police
services, protection against poaching activities, and provision of maritime security.
The role of the police is increasingly shifting and expanding to include, for example,
transnational crime.
3) Significant change in the economic climate within which the security
institutions operate. Constrained economic circumstances in many African
countries have reduced budgetary outlays throughout the public sector, and the
security forces have not been immune to budget cuts. Countries such as Sierra
Leone that are also affected by conflict find themselves in particularly difficult
conditions. The reprioritization of national needs by governments has also led to a
decline in the share of the budget allocated to the security sector. The serious
economic constraints facing all security forces thoughout francophone West Africa at
the beginning of the 21st century – especially the armed forces, police, and
gendarmerie – led some security-sector officials to propose that security policies
need to be reviewed and brought into line with available resources.
In yet other cases, economic constraints can be created by the need to shift financial
resources within the security sector. There is a sense within much of sub-Saharan
Africa that the current crisis of public security has created an urgent need to transfer
resources from defence to the police. The simultaneous rise in transnational threats
to peace and security may require a shift from traditional defence forces to
paramilitary-type forces and demand greater regional collaboration among police
services. Again, such shifts would need to be embedded in a review of security
policies.
4) A cultural crisis within one or more of the security sector institutions. Wide-
ranging transformation processes are often initiated by a cultural crisis within a
specific institution (which may, or may not, be a product of changes in the external
environment.) The armed forces in South Africa, Nigeria and Rwanda have been
forced to transform in light of their previous history and their lack of representivity at
all levels of the organization.
4.4.5 Policy Development
Figure 4-2 portrays a generic policy development process that can be applied to
the different parts of the security sector. It provides the framework for the discussion in
this section.
Once a decision is made to conduct a major policy review, the first step is to
design the process itself. To this end, it is important to ask:
 What needs to be done?
 Who is responsible for managing the policy process? What other role players are
likely to be involved and how will they interact with the process managers?
 How will the policy process be accomplished and with what resources?
64

5.  Who will interpret the policy (which external and internal role players for instance)?
When these questions are answered, the major role players can be provided
with guidance on the policy review process by the cabinet, the legislature or other
mandated government body. This guidance should include:
 The overall direction of policy;
 The issues to be addressed in the course of the review;
 The fiscal framework within which the review is to be conducted;
 Any required consultations, and
 The date by which the review must be completed.
The next step is an assessment of the overall security environment. (See
Figure 4-3.) This assessment will examine potential threats to the country stemming
from both internal and external sources. The assessment will inform decisions about
how the issues that affect the country’s security will be addressed. Some will require
the attention of one or more of the country’s security services. Non-security actors will
address others. Yet other issues will be addressed by a combination of security and
non-security actors. The objective is to identify those areas where the defence forces
will be engaged; those areas where the police service will be engaged; and those areas
of concern to the intelligence services. It should also seek to develop a series of
guidelines on the principles, values and
framework of a broad national security policy.
Once the security environment Objectives of South Africa’s White
Paper on Safety and Security
assessment is completed, policy
frameworks for defence, public security and  Strategic priorities to deal with crime
intelligence can be developed. The  Roles and responsibilities of various
processes in these three areas should, role-players in the safety and security
ideally, be managed in an integrated manner sphere.
to avoid contradictions and inconsistencies.  The role of the Department of Safety
Each of these processes should also be and Security within the Constitutional
managed in a consultative manner to framework.
enhance legitimacy and credibility of the Source: South Africa, Department of
outcome. The policy frameworks for the Safety and Security, “Introduction,” In
Service of Safety, White Paper on Safety
different sectors – defence, public security
and Security, 1999-2004, September
and intelligence – will have somewhat 1998, http://www.gov.za/whitepaper/1998/
different focuses. However, all policy safety.htm#Intro
frameworks should ideally identify the main
sectoral priorities, the fundamental values
that underpin the policy, the legal basis of the policy, and the roles of key actors in each
sector. While it is impossible to provide detailed cost estimates at this stage of policy
development, policy frameworks should reflect fiscal realities.
65

6. Figure 4-2. Process for Conducting Security Assessments and
Developing Policy Frameworks and Operational Strategies
Decisions and Scrutiny by Publications
Relevant Executive/Legislative
Bodies Policy Papers/
Consultation/ White Papers
Information Operational
Depending on the issue Strategies/
under consideration, Assessment of Options Strategic Reviews
input may be sought Background
from: Papers
Ministry of finance
Other ministries not
directly involved in the Operational Strategy
review process Force Structure Options within
Context of Financial Parameters
Legislators
External expert review
panels
Armed forces
Police Operational Strategy
Paramilitary forces Tasks, Capabilities, Capital
Intelligence bodies Requirements, Human Resources,
Costing Economic Policy
Informal groups of Framework
experts from academia,
industry, policy Including national
community, interest development
groups objectives, security
Policy Frameworks budgeting process
Relevant civil society (Figure 5-1)
organizations Defence
Public security
Members of the public Intelligence
Security Environment/ Process Guidance
Strategic Assessment Overall policy direction
Domestic, regional, international Issues to be addressed
environment Fiscal framework
National commitments Required consultations
Potential risks/challenges Due date
Source: Derived from Nicole Ball and Malcolm Holmes, “Integrating Defense Into Public Expenditure
Work,” Paper commissioned by the UK Department for International Development, January 11, 2002,
Annex 6.
66

7. Figure 4-3. Security Environment Assessment
Evaluate all factors that may generate violent
conflict either internally or with other countries,
such as
 Disputes with neighbors
 Regional conflicts that risk “spill over”
 Unequal access to political and/or economic
systems
 Human rights abuses
Identify mechanisms for
addressing problems
Economic and Use/Deploy
Diplomacy Political Reform Mediation Security Forces
Develop Develop Develop Develop
sector sector sector sector
policy policy policy policy
Defence
Intelligence
Public Security
Source: Clingendael assessment tool.
67

8. The central values, concepts and principles of the policy framework form the
basis of the operational strategy for each component of the security sector. The
operational strategy includes tasks, capabilities, force design options, human resource
considerations, capital requirements, and budgetary requirements. The conveners of
the review process develop a series of options for force structures that reflect the
financial parameters provided in the review process guidance. Senior policy makers
then assess the options proposed. It is likely that additional information will be
requested on one or more of the options and that the proposals will be modified before
a decision is made to select one of the options.
Once the relevant executive branch actors have chosen an option, the policy will
be scrutinized by the legislature. The degree to which the legislature is able to
amend the proposed policy will vary from country to country. All policies should
ultimately be approved by the legislature.
The final step in the policy development process is dissemination of the policy
and other relevant material to all stakeholders and to the public.
[This needs more work.]
4.4.6 Policy Implementation
Policy makers frequently give considerably more attention to policy development
than to policy implementation. It is often assumed that a good policy will produce
satisfactory outcomes. In reality, policy outcomes are determined by government
actions, not what governments state they intend to do. Implementation is thus the key
ingredient of good policy. In implementing policy, it is important to bear in mind the
following two points:
 Policy is never static. Both the political and socio-economic environment can
undermine and/or radically shift the priorities outlined in any given policy. In
consequence, the policy management process must be flexible enough to
accommodate these changes and to reflect them in the implementation plan.
 The policy implementation process is as much a political process as a
technical process. While technical skills are necessary to manage and implement
policy, analytical, synthetic, consensus-building, conflict-resolution, compromise,
contingency planning, and stakeholder-dialogue skills are equally important.
The following factors are crucial for successful policy implementation:
 The policy contains clear and consistent objectives.
 The policy identifies those factors that could influence policy outcomes (target
groups, incentives and so on).
 Policy implementation is structured in such a manner that the people responsible for
implementing the process actually implement it and that the intended outcomes are
actually achieved.
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9. Other issues that need to be taken into account during the process of policy
implementation are:
 Assigning implementation responsibility to the appropriate (and capable) actors.
 Reducing the number of veto points and potential blockages. Involving too many
entities in policy implementation inevitably retards the process and makes it
vulnerable to selective interpretation and implementation, and even obstruction.
 Ensuring the necessary supportive rules, procedures and resources are in place.
 Sustaining the commitment of the leadership to the policy objectives they have
approved. This obviously presupposes that they possess the necessary political and
strategic management skills to do so. In reality, capacity building may be necessary.
 Developing and sustaining the commitment of target groups to the policy objectives.
This entails ongoing dialogue and consultation with these target groups. The
objective must be to ensure that all relevant actors receive the adequate information
at all stages of the policy process.
Policy implementation has two major components: 1) planning and 2) execution.
4.4.6.1 Planning
Policies in any sector provide general guidance on the government’s objectives
and the norms and principles underlying these goals. In order to implement policy, it is
necessary to develop long-term, strategic plans and to translate these objectives into
programmes that can be implemented and budgets that can support the specific plans
and programmes.
Planning is important because:
 No organisation operates effectively in the absence of clear and realistic plans.
Needs, capabilities and available resources have to be assessed and structures
must be developed that enable needs to be aligned with capabilities and resources.
Specifying needs and rigorously assessing requirements based on these needs will
demonstrate where there are resource gaps and should lead governments to
reallocate resources and/or to use available resources more efficiently.
 Effective management and oversight of an organisation depends on plans with
measurable outputs and agreed financial inputs.
In common with policy development, realistic and effective planning requires that
the government undertake a detailed sectoral needs assessment. It is equally important
that planning occurs within the context of a credible, multi-year financial framework. For
most activities, a three-to-five year framework is adequate. This corresponds to the
medium-term expenditure framework that many countries are adopting for overall
economic planning. A much longer financial horizon – on the order to 20-30 years -- is
required for major capital acquisitions. (The process of financial management of the
security sector is addressed in more detail in chapter 5.)
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10. Defence, public security and intelligence plans are the documents that specify
the measurable outputs that these sectors will produce in pursuit of the government’s
objectives against agreed financial allocations. Sectoral plans should contain the
following elements:
 The strategic profile of the defence/public security/intelligence services, including
mission, vision, critical success factors, and value system.
 The analysis and critical assumptions underlying the strategic plan.
 A clear statement of the required capabilities of each security service.
 A clear statement of the way in which the relevant service needs to be structured to
deliver the required capabilities.
 The capital acquisition, facilities, and personnel plans to support the delivery of
those capabilities.
 The administrative outputs to manage the defence/public security/intelligence
function, including provision of policy, strategy, plans, programmes, and budgets.
 The short- to medium-term operational tasks of the defence/public
security/intelligence bodies.
4.4.6.2 Execution
Policy execution requires: a) the human and institutional capacity to carry out the
plans and programmes developed to implement policy and b) actual application of those
plans and programmes.
As explained at the beginning of this chapter (in section 4.4), it is critically
important to conduct a realistic appraisal of the capacity of relevant actors to manage
and implement policy. Attention should focus in the first instance on individuals in key
positions. Methods of on-the-job training such as mentoring arrangements should be
considered to the extent feasible. Where feasible, mentors should be sought from
countries that have undertaken similar
transformation exercises. Major institutional Box 4-2. Multiple Benefits of Regular
blockages should also be prioritised and Evaluation
methods of overcoming them negotiated
“Well-focused and properly timed evaluation
among the different stakeholders. [It would can: (a) provide the information needed to
be really nice to have a box giving an bring about mid-course corrections in
example where such human or institutional programs and projects; (b) allow for the
capacity shortages were overcome.] analysis and resolution of systemic or policy
issues; (c) improve the design of future
Monitoring and evaluation have been operations; and (d) contribute to strategic
policy and program decisions.”
one of the most neglected aspects of the
policy process. It is often assumed that Source: Poverty Reduction and Economic
Management Network, World Bank, Public
once policy is agreed, it is “cast in stone” Expenditure Management Handbook,
and that no further changes are necessary. Washington, DC: 1998, p. 112.
In fact, policies need to be constantly
70

11. assessed for their effectiveness and continued relevance. Monitoring involves the
routine checking of the policy against the plan devised in the process design phase.
Evaluation requires a critical and detached examination of the objectives of the policy
and the extent to which they are being met.
Evaluations can be conducted at all stages of implementation and should been
done regularly (Box 4-2). Some evaluations should be conducted using staff involved in
implementing the relevant policy and some should be conducted by independent
evaluators. In all cases, the findings of evaluations should be fed back into the policy
development and implementation process.
[Need more here.]
4.4.7 Oversight
Regular evaluation of the policy process is an important component of oversight.
Evaluations can help to identify where problems arise in policy development and
implementation. However, unless there is a means of addressing the problems
identified through evaluations, they will persist.
There are two ways of achieving accountability in any sector. The relevant
actors can be required to answer directly to all or some portion of the population of a
country. Alternatively, politicians and bureaucrats can be held accountable for the
actions of those actors by defining a set of democratic governance criteria against which
they are to be measured. Most security sector accountability is indirect, through the
legislature, the courts, the office of the auditor-general, and the like. There is some
direct accountability in the criminal justice sector through groups such as police
commissions, police monitoring groups, police-community liaison groups, and
community safety fora.
For oversight bodies to ensure that the members of the security forces –
individually and collectively – are answerable for their actions and there is some means
of enforcing breaches of behaviour:
 The functions and powers of each oversight body must also be clearly delineated
and recognised, ideally in the constitution, alternatively in subordinate national
legislation.
 Oversight bodies must have the political weight necessary to enable them to exert
sanctions if situation warrants. The political leadership and the security forces must
accept that oversight actors have legitimate responsibilities and not seek to prevent
them from carrying out their mandated duties.
 Oversight bodies must be politically independent. In particular, assured funding
mechanisms must exist so that the governmental bodies oversight agencies are
responsible for overseeing are not in a position to prevent the oversight agencies
from fulfilling their mandate.
 It must clear what each security sector actor is supposed to do what in terms of
policy development and implementation.
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12.  Oversight bodies must have adequate information on the activities of each member
of the security sector and the capacity to analyse this information.
It is also extremely important for democratic governance of the security sector
that efforts to strengthen the quality of leadership and the capacity of the civil authorities
to manage and oversee the security sector target private-sector actors. While civil
society actors cannot carry out formal oversight, they can support key oversight actors
in a variety of ways: monitor the development and implementation of security policy,
contribute to policy development, give voice to public views on security-related issues,
and shine a spotlight on deficiencies in oversight.
4.5 KEY CONSIDERATIONS IN IMPLEMENTING NEW POLICIES
TO BE ADDED
Summary of Main Points
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13. CHAPTER 5
MANAGING FINANCIAL RESOURCES24
AIM
Sound fiscal management of the security sector is essential if a country is to
have effective, efficient and professional security forces that are capable of protecting
the state and its population against internal and external threats. Integrated planning,
policy-making, and budgeting systems are necessary to achieve an appropriate
allocation of public sector resources and to manage those resources effectively and
efficiently. This chapter provides guidance on how this integration can be achieved for
the security sector. While it has often been argued that because of the sensitivity of
security issues, the security sector is somehow different from other portions of the
public sector. A central premise of this chapter is that, from a public policy and process
perspective, the security sector shares many of the characteristics of other sectors and
that the citizens of any country will benefit from a security sector that is subject to the
same broad set of rules and procedures of other sectors.
Section 5.1 describes how this process can take place in the security sector in a
manner that is consistent with democratic, civil control of the security sector. Section
5.2 examines a number of issues relating to reform of the budgeting process that are
especially relevant in the security sector.
5.1 INCORPORATING THE SECURITY SECTOR INTO GOVERNMENT-WIDE FISCAL
MANAGEMENT PROCESSES
There are four crucial, inter-related components to managing public expenditure
in any sector: 1) sectoral planning; 2) a firm resource envelope for the entire public
sector; 3) sectoral allocation processes; and 4) the efficient and effective use of
resources.
For these processes to be effective, each sector needs to follow good practices
internally and to link with the broader government-wide fiscal management and
oversight process. All of this must occur within the framework of democratic
governance and the principles of sound budgeting and financial management.25 This
section discusses how this process should work in the security sector, as portrayed in
Figure 5-1.
24
This chapter draws heavily on Nicole Ball and Malcolm Holmes, “integrating Defence into Public
Expenditure Work,” Paper commissioned by the UK Department for International Development, January
11, 2002.
25
Box 3-3 lists the key principles of democratic governance in the security sector. Annex 3 defines ten
widely accepted principles of sound budgeting and financial management.
73

14. Figure 5-1. Linking Security-Sector Policy, Planning and Budgeting
Stage 4
Monitor activities
and account for Oversight
expenditures Bodies
Legislature
Auditor
Stage 5 General
Evaluate and audit Police
efficiency and Commission
effectiveness of Other
Stage 3 activities; feed results relevant
into future plans, bodies
Implement planned report to relevant
activities: deploy personnel; legislative and
undertake activities executive bodies
Stage 2 Stage 1
Mobilise and allocate Review policy: review
resources: prepare previous planning and
defence/intelligence/public implementation period.
security budgets
Strategic Planning
Periodically review security
environment; establish
defence/intelligence/public
Government-wide budget security policy guidelines; create
process strategic plan for each sector.
Set policy, engage in planning,
establish resource framework,
set out objectives, policies,
and expenditure priorities.
Source: This is a simplified version of the policy, planning, and budgeting process as applied to the
defence sector only that was published in UK Department for International Development, “Discussion
Paper No. 1. Security Sector Reform and the Management of Defence Expenditure. A Conceptual
Framework,” Annex 3 in Security Sector Reform and the Management of Military Expenditure: High Risks
for Donors; High Returns for Development, Report on an International Symposium sponsored by the UK
Department for International Development, London, February 15-17, 2000, www.dfid.gov.uk, search
under publications.
74

15. 5.1.1 Sectoral Planning Process
As in any other part of the public sector, defence, public security and intelligence
budgets should be prepared against a sectoral strategy. Chapter 4 described the
process by which security policy frameworks are developed and translated into plans
and programmes that can be costed. The information contained in Section 4.4.5 on
“policy development” and section 4.4.6 on “planning” will not be repeated here. Several
points do bear reiteration, however.
 The policy and operational review processes should ideally be as transparent and
inclusive as possible. In so far as they are based on a broad consultation among the
relevant stakeholders, and if the final product is made public, for example through
the publication of a policy paper and operational strategies, their legitimacy will be
strengthened.
 Within the government, the broad range of relevant actors with mandates relating to
defence/intelligence/public security should be involved in this process, not just the
ministry of defence or interior, or the office of the president. It is also important that
key financial management actors such as the finance ministry, the budget office, and
the parliamentary public accounts committee of parliament are adequately
consulted. All sectoral policy development and planning should occur within an
agreed financial envelope.
 The defence/intelligence/public security services should be consulted as well, but
they should not drive the process. One of the fundamental errors in thinking on
security, especially defence, is that the security bodies are responsible for providing
“security” and as such can prescribe how the different security bodies will be tasked,
structured, equipped and funded. In reality, it is the government as a whole that is
responsible for the security of the state and its population and that determines how
the security forces will be tasked, structured, deployed, and resourced. The
security services have an important advisory role to play in this process, but input
must be sought from a wide variety of other actors as well as indicated in Figure 4-2.
 Major reviews of security policies will occur at intervals. It is important, however, to
constantly monitor existing policies to ensure that they continue to conform to
realities and that they are being implemented appropriately.
5.1.2. Setting the Government-Wide Resource Envelope
Government policies in any sector must be affordable. Affordable policies
require a sustainable macroeconomic balance, which is critical to the long-term
economic health of a country. To attain a sustainable macroeconomic balance,
governments must give high priority to exercising discipline over total public
expenditure.
Once the aggregate level of government expenditure is chosen, it is vital that this
figure be accepted both as an upper and, as far as possible, a lower limit. An easily
expanded resource envelope allows governments to avoid firm decisions on prioritising
policy objectives. Fiscal discipline is weak in many African countries. While the military
75

16. is by no means the only body responsible for the expansion of the resource envelope in
the course of the fiscal year, it frequently enjoys a privileged position. Government
officials, military officers and heads of state and government have intervened in the
resource allocation process with flagrant disregard for established procedures and pre-
determined spending priorities. Military officers have presented the treasury with
invoices for expenses incurred outside the budget framework. Defense ministers have
refused to share the details of defense spending with finance ministers and parliament.
The full fiscal implications of arms procurement decisions, including debt incurred for
military purposes, are more frequently than not reflected in budgets.
At the other end of the spectrum, without a solid floor to the expenditure
envelope, resources are not predictable and operational performance will suffer.
Although the defence forces and intelligence services are likely to receive preference in
times of fiscal shortfalls, this is by no means guaranteed (Box 5-1). Additionally, other
security forces such as police services and gendarmerie forces tend to have less
stability in their funding.
It is therefore extremely important to have in place institutions that can achieve
long-term macroeconomic stability, determine the overall resource envelope for public
expenditure, and enforce government decisions on expenditure priorities and levels. It
is particularly important that:
 Methods of evading fiscal ceilings such as guarantees, off-budget expenditure and
arrears, which can subsequently undermine fiscal stability, should be discouraged.
 Mechanisms to review the potential impact of assuming debt before approving major
capital purchases exist and be applied to the security sector. There is evidence that
a lack of such mechanisms has had destabilizing effects on fiscal policy down the
track. This is particularly relevant to defence procurement (Box 5-2).
 There should also be clear rules for any reallocation during budget execution,
including in response to a shortfall in revenue.
Box 5-1. Problems Caused by Underfunding African Armed Forces
While the military often enjoys a privileged position in terms of resource allocation in Africa, resource
constraints have led some African governments to fail to provide the armed forces with adequate
resources to carry out their assigned missions. This not only places at risk the safe and secure
environment that is necessary for both economic and political development. It also creates frustration
and resentment among the armed forces.
Representatives of the West African armed forces, gendarmerie, and police services who participated
in a workshop on democratic governance in the security sector in Dakar, Senegal in October 2001,
argued that adequate transparency in the defense sector is critical so that the serious underfunding that
afflicts armed forces throughout the region is clear for all to see. They suggested that there is both
disdain for the military among civilians and a belief that military security is a comparatively low priority
among those who control their countries’ financial resources. In their view, this not only leads to
inadequate military budgets and thus inadequate external security; it also can heighten internal
insecurity through a threat of coups.
76

17. One method of reducing opportunities to soften fiscal discipline found in other
key sectors like health and education is to adopt a medium-term forward planning
process linked to medium-term revenue projections. In fact, defense officials are
frequently favorably disposed to medium-term frameworks because procurement of
military equipment and construction of military facilities involve multi-year expenditures.
Adopting a medium-term framework makes it harder to avoid fully costing defense
programs, particularly outlays on arms procurement and major construction projects.
Interestingly, a few armed forces in Africa have embraced the MTEF concept in an effort
to obtain consistent financing.
5.1.3 Sectoral Allocation of Resources
Once the overall resource envelope is agreed, resources must be allocated
according to priorities both within sectors and among sectors. This process involves
political bargaining among a wide range of actors. It must be informed by a set of
sectoral strategies and, wherever possible, information on performance. Once the
authorities responsible for central budget management set the budget envelope for
defence/intelligence/public security, the ministry responsible for managing the relevant
sector (defence, interior and so on) should take the lead in developing initial budget
projections in collaboration with the relevant security services.
From an efficiency perspective, it is particularly important to get the allocation
right between recurrent and capital budgets. Within recurrent expenditure, it is also
important to strike an appropriate balance between wages and salaries, and between
operations and maintenance. Unless this balance is achieved, there may be capital
investments that are not properly maintained. Practices such as keeping “ghost”
soldiers/police officers on the payroll and channeling security-related personnel costs
through other ministries complicate this calculation. Moreover, recurrent funds may be
spread too thinly. For equipment procurement, it is critical to evaluate up-front the full
life-cycle costs of materiel.
The central budget office should assess the appropriateness of the ministries’
budget requests. In this respect, it is important that finance ministries have the capacity
to analyze security programs, just as they should have the capacity to analyze other
sectoral programs. Even where the budget office is confined to ensuring only that the
defence/intelligence/public security budget conforms to the guidelines laid down and
that costings are reasonable, this should be underpinned by a knowledge of the policy
issues. Given the weaknesses in the disciplining framework in many developing
countries and the failure to demand performance (in terms of outputs and outcomes)
from ministries, it is important that budget offices build the capacity to engage in the
policy debate.
77

18. Box 5-2. The Importance of Transparency in Procurement Processes: The Tanzanian Air
Traffic Control System Purchase
In December 2001, a month after Tanzania received some $3 billion in debt relief aimed at improving
the government’s capacity to support improvements in education, health, water, roads and other
priority areas, the UK approved the purchase of a $40 million BAE air traffic control system by
Tanzania. The deal had been under negotiation for several years, but the decision created
considerable concern within Tanzania and the UK, as well as at the World Bank and the IMF.
Although the system was ostensibly chosen because it could be used for both civil and military air
control, technical evaluations conducted by the International Civil Aviation Organization (ICAO) at the
request of the World Bank in 2001 and 2002 concluded that the system did not provide value-for-
money. It is primarily a military system based on dated technology, additional expensive equipment
would be required to make it functional for civil purposes, and cost four or five times as much as a civil
aviation system more suited to Tanzania’s requirements.
The World Bank opposed the purchase, expressing concerns about the debt implications of the
purchase. Both the World Bank and the IMF refused to extend credits to enable the Tanzanian
government to finance the purchase. This led Tanzania to seek commercial funding from Barclay’s
Bank. While Barclay’s proposed to lend the money at well below market rates, Tanzania would still
be paying more for the loan than if the Bank or the Fund had provided credits. The financing deal
was reportedly “deliberately structured to fit just inside the IMF's rules for poor indebted countries. “
The IMF requires all borrowing to be at rates equivalent to containing a grant element of 35 per cent.
The Tanzanian deal reportedly included a 35.9 per cent grant element.
Ibrahim Lipumba, the leader of the Tanzanian opposition, claimed the deal was negotiated without
adequate consultation of the Tanzanian parliament aimed that parliamentarians had only learned the
details from UK press reports. He also noted that the public expenditure review, which was meant to
take in the views of all civil society, never addressed the issue. Civil society groups issued a
statement in February 2002 calling for wider participation in future decisions to incur substantial debt
for any purpose.
UK Chancellor of the Exchequer, Gordon Brown, and UK Secretary of State for International
Development, Clare Short, both argued strenuously within Cabinet against approval of the deal, but
were defeated. The Ministry of Defence had used a provision licence procedure that enabled
equipment to be built and partially shipped even before the export license was agreed. This
essentially forced the Cabinet’s hand. Nonetheless, DFID withheld £10 m in budgetary support in
early 2002 over concern about the Tanzanian government’s commitment to poverty reduction.
The budget support was resume in mid-2002 after Tanzanian president, Benjamin Mkapa, promised
Clare Short that future public spending decisions would received a higher level of scrutiny. Mkapa
resisted efforts to publish the ICAO report, but did begin negotiations with BAE to reduce the price of
the overall deal. The UK Arms Export Control Bill was amended to include sustainable development
as one of the criteria for agreeing future export licenses, although critics argue that some loopholes
remain that could allow similar deals to be approved.
Source: World Bank Development News, “World Bank Could Bar $40 Million Tanzania Air Traffic
Deal,” December 21, 2001, www.worldbank.org/developmentnews, search Development News
Archives under December 21, 2001; Alan Beattie, “IMF 'should have prevented' BAE's Tanzania
deal,” Financial Times, Mar 27, 2002; “Tanzania: Critics decry purchase of air traffic control system,”
Irinnews.org, February 13, 2002, www.irinnews.org/print.asp?ReportID=20848; David Hencke,
Charlotte Denny and Larry Elliott, “Tanzania aviation deal ‘a waste of money’,” The Guardian, June
14, 2002; David Hencke, “Tanzania wants new deal on air system,” The Guardian, June 15, 2002;
Charlotte Denny, “Tanzanian aid back on track after air control system row,” The Guardian, July 4,
2002.
78

19. The challenge role of the budget office not only ensures that decision makers
confront the full range of issues; it also will contribute to raising the quality of proposals
from ministries over time. Moves to more output- and outcome-oriented systems will
only place more demands on budget offices to understand the policy issues. Given the
limited policy capacity in many countries, it is of course essential that this policy
capacity be effectively allocated across central agencies and between central agencies
and line ministries. The central budget office should ideally consider spending
proposals within a medium-term resource envelope and should seek to ensure tight
links between policy-making, planning, and budgeting. This enhances the likelihood
that that budget ceilings and floors will be respected and security outcomes, however
implicit, will be achieved.
Again, it is important to recognize that in all countries resource allocation
decisions involve very difficult trade-offs between the security and non-security sectors
as well as within the security sector itself. The trade-offs are more difficult in poorer
countries. It is therefore important that the executive delivers the final appropriation
request to the legislature by a date that affords legislators adequate time to evaluate
and debate the spending proposal before the beginning of the new fiscal year and
before a vote on the budget is required. Exact procedures are likely to differ from one
political system to another. Additionally, methods of consulting with the public on the
proposed trade-offs can strengthen the entire process by contributing to a national
consensus on priorities.
If a country is placed on a war footing and is forced to transform the economy to
respond more effectively to unforeseen security needs, the budget system too must be
able to respond – allocations and the pattern of appropriations will need to change to
reflect the change in government priorities. The executive should always be able to
react swiftly to major security threats and many constitutions empower the executive to
take exceptional action should the need arise. A key issue with respect to the
management of security expenditure in such instances is the ability of government to
avoid emergency regulations that undermine the ability to revert to good practice once
the war is over.
5.1.4. Efficient and Effective Use of Resources
Once a budget has been approved by the legislature and monies appropriated,
the goal is then to ensure that resources are used efficiently and effectively in the
implementation of the strategic sectoral priorities. This requires:
 Careful monitoring and evaluation of operational performance, both within the
security services themselves and by civil servants. As a general rule, funds
appropriated should be spent for the purposes and in the amounts intended. This is
necessary for sound fiscal planning and management as well as for the operational
effectiveness of the security services. Stability in policy and funding, particularly
during the budget year, is important for operational performance. It is difficult to
assess stability in policy if there is no strategy for defence/intelligence/public
79

20. security and no predictability of funding. At the same time, without transparent and
comprehensive defence/intelligence/public security budgets, it is difficult to achieve
predictability of funding.
 Well-functioning financial management information systems (FMIS). FMIS are
critical if decision makers and public-sector managers are to obtain the financial
data they require for controlling aggregate expenditure, prioritizing expenditure
among and within sectors, and generally operating in a cost-effective manner. It is
also extremely important that irregularities identified in the course of monitoring
performance be addressed. Failure to do so may create or reinforce a climate
within which non-compliance can flourish.
 Transparent procurement practices. As Box 5.2 demonstrates, transparency in
procurement is a critical element in achieving value for money and cost-
effectiveness. Procurement should be open to public scrutiny with expenditure fully
accounted for. Purchases should also reflect actual, rather than perceived, threats
and equipment should be relevant to agreed tasking. (See Annex 4 for a discussion
of distinctive features of defense procurement.)
The security sector should meet the same standards of accounting applied to
non-security bodies.
 Security ministries should maintain an internal audit unit and consideration might be
given to supporting the establishment of an inspector-general function. Inspectors-
General tend to have responsibility for investigating allegations of security breaches,
fraud, waste, abuse and commercial impropriety. They may also be asked to
undertake independent reviews of internal systems and processes through
evaluations, audits, and fraud risk assessments. As such the position has many of
Box 5-3. Tracking Defence Spending in Zimbabwe
In Zimbabwe, not withstanding its involvement in the Democratic Republic of Congo, defence
expenditure has often not been used efficiently and effectively, with negative effects on the basic
needs of service personnel and readiness of the force as a whole. The Parliamentary committee
responsible for security sector oversight has issued reports highlighting specific problems. Some of
the shortcomings identified include overcrowded, deteriorated troop living facilities, overcrowded
military medical facilities which also had no medicines available, and grossly underfunded rations
allowances that forced commanders to send troops on protracted home leave to assure they were
fed. Conditions described in the committee’s 1998 report also affected armed forces capability. For
example, military units surveyed lacked most or all of the vehicles necessary for effective functioning
while the vehicles actually on hand tended to be were very old, dilapidated, or unusable for lack of
spare parts. Similar deficiencies were noted for aircraft.
The government has shown no interest in addressing the problems identified by these reports. The
intervention in the Democratic Republic of the Congo has demonstrated where its priorities lie. An
alternative approach, which may be difficult to implement in the current political environment in
Zimbabwe, would be to encourage the Zimbabwean Defence Forces themselves to conduct their own
tracking surveys as part of a post-conflict reassessment process.
Source: Martin Rupiya and Dan Henk, “Funding Defence: Challenges of Buying Military Capability in
Sub-Saharan Africa,” unpublished working paper, ca. 200l, p. 29.
80

21. the features of internal audit but would be expected to subsume that function. As a
normal rule, the IG would be part of the internal management.
 The auditor-general should audit security-related accounts regularly, along with
those of the different security services. The results of these latter audits should be
reported in a timely fashion to the legislature and irregularities addressed rapidly.
 Cash flow and expenditures should be monitored closely. Methods of verifying the
number of personnel in the armed forces and employed by the defense ministry and
of linking salary and wage payments to actual employees facilitate these tasks.
 Tracking studies, carried out by or for one or more of the security-related ministries,
can be an important tool for determining whether resources are reaching their
intended targets (Box 5-3).
 Client surveys may also be useful in the public security sector. As Box 5-4
demonstrates, client surveys in non-public security sectors may identify issues
relevant to the public security sector.
 Finally, as in any sector, feedback from monitoring and evaluation into strategic
planning is critical.
While it may not be appropriate to push for a greater performance orientation in
the security sector where the public sector as a whole remains deficient in this regard,
information on security-related performance should be an objective. This would be
particularly important with regard to defense preparedness, which is akin to outputs.
Clear objectives, specification of preparedness, measures of performance supported by
monitoring and evaluation should all be encouraged. Value for money audits by the
external auditor also help focus attention on efficiency and effectiveness issues, and the
defence/intelligence/public security sectors should not be excluded from the mandates
Box 5-4. Client Survey of Nicaragua Bus System Points to Public Security Shortfalls
“…[T]he Ministry of Construction and Transportation (MCT) has been spurred on to undertake
innovative actions based on the findings of two rounds of [client] surveys. The initial survey of bus
riders indicated that the quality of service was poor. For bus riders, security was an important aspect
of quality and 14 percent of riders indicated that they had been assaulted on the bus in the last year.
The initial survey also indicated that bus drivers rarely respected the official fare of 85 cordobas – 90
percent did not return the 15 cordoba change when a 100 cordoba note was presented. The survey
also showed that riders would be willing to pay a higher fare if quality of service improved. The
ministry responded by raising the official fare and taking steps to enhance public awareness of the
problem. A year later a follow-up survey was conducted. In contrast to the previous year, 90
percent of riders reported that the new fare was being respected. However, the quality of service
had deteriorated. There was a 60 percent increase in assaults from the previous year. This brought
the MCT, the National Police, the Managua Mayor’s Office and the bus companies together to
discuss actions to improve security on the buses. A number of recommendations followed, including
the introduction of plainclothes policemen on buses, and establishment of an adequate reward
system for good behavior.”
Source: Poverty Reduction and Economic Management Network, Public Expenditure Management
Handbook, Washington, DC: The World Bank, 1998, p. 87, Box 5-7.
of the external auditor and other oversight bodies. Where a more performance-oriented
budgeting system is being implemented, defence/intelligence/security should be
81

22. considered for inclusion in any pilot phase.
5.2 KEY CONSIDERATIONS IN REFORMING BUDGETING SYSTEMS
Many of the lessons that have been learned in the course of reforming budget
systems mirror the good practices described in Chapter 1 in the discussion on reforming
the security sector and in Chapter 4 on managing policy processes. This section briefly
reviews several of the main issues that should be taken into account when seeking to
strengthen the budgeting process in the security sector.
 Successful budget reform in any sector requires comprehensive, broad-based
changes. Budget systems do not exist in a vacuum. They are tightly linked to other
systems, most importantly political and managerial systems. If these other systems
do not function adequately, it will be difficult for budget systems to produce desired
outcomes. There is considerable evidence that the chances of success are greater
when the focus is on a transformation of institutional structures than on discrete
reforms, for many of the same reasons that a comprehensive transformation of the
security sector is more likely to
succeed than piecemeal reforms.
Box 5-6. A Comprehensive Approach to
 “Comprehensive” is not synonymous
Budget Reform
with “simultaneous.” In common with
other institutional transformation “Much of the skepticism about
comprehensiveness might lie in a
processes, building transparent and misconception of what is meant by the term.
accountable budget systems that Comprehensiveness is not about trying to do
produce desired outcomes is a everything at once. Rather, it is about taking a
complex and lengthy undertaking. The holistic approach to diagnosing problems,
challenge is to develop a plan for understanding all the interlinkages and
evaluating the institutional impediments to
progressively strengthening budget performance, and then finding the most
systems (Box 5-6). There is no appropriate entry point to launch a phased
universally applicable sequence in reform process. Phasing can be fast or slow,
which reforms should be introduced. It depending on country conditions, and could
is necessary to assess the strengths eventually expand to become comprehensive.”
and weaknesses of individual budget Source: Poverty Reduction and Economic
systems, as well as the strengths and Management Network, Public Expenditure
weaknesses of other systems linked to Management Handbook, Washington, DC: The
World Bank, 1998, p. 78.
the budget system, and develop a plan
based on local circumstances.
 The most effective way of reforming a budget system is to focus on the principles of
sound budget management. There are different ways of applying these principles,
and countries must determine what works best for them. Additionally, because
budget reform is fundamentally institutional reform, focusing on introducing specific
tools or techniques instead of principles, processes, and systems will rarely, if ever,
produce a well-functioning budget system.
 It is critically important to have the basic building blocks of sound budget
82

23. management in place. This means understanding “budget basics” such as
accounting, budget examination, estimating, forecasting, monitoring, and evaluating.
 All budget systems face the challenge of finding the balance between long- and
medium- term commitments and the flexibility to meet unforeseen events. This is
particularly problematic in the security sector. Defence budgets are especially
challenging in this respect. Defence budgeting involves identifying possible future
events that the defence forces might have to meet in the knowledge that capabilities
will have to be developed within a finite resource base.
 In common with other types of institutional transformation, reforming a budget
system requires an implementation strategy. Such a strategy must be flexible, but it
must exist.
 One of the central tenets of sound budget management is access to information.
Access to accurate information is critical to strengthening the decision-making
process. However, it is important to understand that more and better information will
not by itself produce better decisions. Policy choice is political and it is necessary to
understand the various factors that affect decisions.
Summary of Main Points
83

24. CHAPTER 6
MANAGING THE DEFENCE SECTOR
AIM
The aim of this section is to examine governance issues as they affect defence
forces and reflect on best and bad practice with a view to developing proper
governance guidelines.
6.1 ASSESSING NEEDS
6.2.1 Rationale for Defence Forces
All governments have two fundamental responsibilities towards their people.
These are to ensure their present and future well-being and security. The well-being
of a people and their security cannot be subdivided. Lack of security, the inability to
protect one’s values and valuables, the feeling of vulnerability, the exposure to the
whims of others, are fundamentally counter to the concept of well-being. In reality,
the broader concept of “human security” – that is, security against want, suffering,
environmental degradation and the miscarriage of justice and human rights – is
inseparable from the concept of well-being.26
The well-being of a country and its people is also dependent on foreign
investment and trade. It is a fact that corporations do not invest where they have no
confidence in the security of their investments. This investor confidence is
influenced by the perceptions of the long-term stability and security that they have of
individual countries. Two of the factors influencing this confidence are internal peace
and stability and the capacity of the country to defend and protect its interests,
including an environment that is sufficiently stable to gain investor confidence.
As shown in Figure 4-3, governments have a number of ways of creating an
environment conducive to the security and well-being of its population and to stable
economic relations with other countries. One is to invest in defence forces. Several
arguments are often raised against the decision to invest in the security sector,
including defence forces: 1) the non-existence of immediate physical threats; 2) the
existing conditions of regional and international peace; and 3) the dire need for
spending on social and developmental priorities. These are all legitimate concerns,
and when resources are allocated to different sectors, the need for security has to be
weighed against the need economic and social development. However, even a
cursory look at events in the Balkans, the Middle East, South Asia, the Horn of Africa
and Central Africa demonstrates the objective need for defence forces. The
26
See the website of the Commission on Human Security for a broad definition of “human security,”
www.humansecurity-chs.org.
84

25. establishment and development of mission-ready military forces is a long-term
matter. It cannot be accomplished overnight when a conflict situation threatens.
Some insurance against uncertain
eventualities is required and all responsible
Defence planning must be based on a
states will, for the foreseeable future, invest “needs driven but cost constrained
in “the defence and protection of the state, approach.
its territorial integrity and its people.” To
balance the conflict between requirements
and resources, the fundamental problem of economics, defence planning must
therefore be based on a “needs driven but cost constrained” approach. The ultimate
challenge in this approach is to find the most efficient; cost-effective, best value-for-
money solution to the defence input/output equation.
6.1.2 Determinants of Defence Spending
The macro level of defence spending by a country will be determined by many
factors both objective and subjective. These include:
• The strategic environment and threat perception of the particular country at
any particular time. Obviously the more stable and peaceful the environment,
the less motivation there will be to spend on defence. This can create the
problem of short-term focus on defence and crisis management when things
go wrong.
• The view of government regarding its responsibilities towards the social,
developmental and protective functions of the state and the relative priorities
accorded these functions. This is dependant on historic, strategic and cultural
factors and will vary from state to state.
• The perceived opportunity cost of defence spending. The more the social and
developmental demands that are placed on government, the higher the
opportunity cost of defence becomes. There will therefore be a tendency for
the poorer and less developed countries to give preference to social and
developmental spending at the cost of defence. The balancing factor, in this
case, must be to also determine the “opportunity cost of not spending on
defence”. This implies the determination and acceptance of the associated
risks to national security.
• The size of the national budget. Regardless of the needs, defence spending
will always be limited by the available national income. This simply implies
that defence policy and strategy must be aligned with the dictates of the
feasible. Defence policy and strategy must be made within the confines of the
freedom of action that the national power base allows.
85

26. • Defence spending spin-offs. Where positive spin-offs for the economic,
technological and social development of the country can be obtained, defence
spending will receive stronger national support. It is therefore to the
advantage of defence strategists and planners to positively seek ways and
means to enhance spin-offs on defence spending.
CHAPTER 6
MANAGING THE DEFENCE SECTOR
The aim of this section is to examine governance issues as they affect defence
forces and reflect on best and bad practice with a view to developing proper
governance guidelines.
6.1 ROLE OF THE MINISTRY OF DEFENCE
4.5.2.3 Head of Security Force
The chief of police, armed forces or intelligence services generally has a
command or line authority role over the forces that s/he heads up. In the armed
forces, for example, the role of the Chief of Defence Staff or the Chief of Defence
Force is the following (in almost all cases):
a. To command the force in question.
b. To translate defence policy into military strategies, plans and doctrine.
c. To direct the work of the Defence Staffs.
d. To render advise to the Minister on all operational aspects of defence
planning and policy.
To be the Minister of Defence’s principal military advisor.
6.2 ASSESSING NEEDS
86

27. 6.2.1 Rationale for Defence Forces
All governments have two fundamental responsibilities towards their people:
to ensure their present and future well-being and security. The well-being of a
people and their security cannot be separated from each other. Lack of security, the
inability to protect one’s values and valuables, the feeling of vulnerability, the
exposure to the whims of others are fundamentally counter to the concept of well-
being. In reality, the broader concept of
“human security” – that is, security against
want, suffering, environmental degradation Box 6-1. The Security Dimensions of
and the miscarriage of justice and human Well-being
rights – is inseparable from the concept of When poor people around the globe are
well-being. 27 asked what constitutes “well-being,” their
responses are strikingly similar. They
want social well-being, good health,
The well-being of a country and its material well-being and security. The
people is also dependent on investment most frequently cited components of
and trade. It is a fact that corporations do “security” are: civil peace; a physically
not invest where they have no confidence in safe and secure environment; personal
the security of their investments. Investor physical security; lawfulness and access
to justice, security in old age; and
confidence is influenced by perceptions of confidence in the future.
the long-term stability and security of a Source: Narayan, Deepa, Robert
country. Two of the factors influencing this Chambers, Meera Kaul Shah, and Patti
confidence are internal peace and stability Petesch, Voices of the Poor: Crying Out
and the capacity of the country to defend for Change, New York, N.Y: Published
and protect its interests, including an for the World Bank, Oxford University
Press, 2000, Chapter 2.
environment that is sufficiently stable to
gain investor confidence.
Figure 4-3 shows some of the mechanisms governments can use to create an
environment conducive to the security and well-being of the state and its population
and to stable economic relations with other countries. One mechanism is to invest in
defence forces. Despite the close links between security of the state and its
population and personal and societal well-being, arguments are often raised against
investing in defence forces. Chief among these are: 1) the lack of immediate
physical threats; 2) the existing conditions of regional and international peace; and 3)
the urgent need for spending on social and developmental priorities. These are all
legitimate concerns, and when resources are allocated to different sectors, the need
for security has to be weighed against the need for economic and social
development.
27
See the website of the Commission on Human Security for a broad definition of “human security,”
www.humansecurity-chs.org.
87

28. In making this calculation it is important to understand that the establishment
and development of mission-ready military forces is a long-term matter that cannot
be accomplished overnight when a conflict situation threatens. As events in the
Balkans, the Middle East, South Asia, the Horn of Africa and Central Africa during
the 1990s and early 2000s demonstrates, it
can be hard to predict exactly when defence
Defence planning must be based on a
forces will need to be used, either to defend “needs-driven but cost-constrained”
national territory or as part of a peace mission. approach.
Some insurance against uncertain
eventualities is required and all responsible
states will, for the foreseeable future, invest in “the defence and protection of the
state, its territorial integrity and its people.” To balance the conflict between
requirements and resources, the fundamental problem of economics, defence
planning must therefore be based on a “needs-driven but cost-constrained”
approach. The ultimate challenge in this approach is to find the most efficient; cost-
effective, best value-for-money solution to the defence input/output equation.
6.2.2 Determining the Configuration of the Defence Forces
The way in which a country configures its defence forces is determined by
many objective and subjective factors. These include:
 The strategic environment and threat perception. Obviously the more stable
and peaceful the environment, the less motivation there will be to spend on
defence. This can create the problem of short-term focus on defence and crisis
management when things go wrong.
 The government’s view of its responsibilities towards the social,
development and protective functions of the state and the relative priorities
accorded these functions. This is dependant on historic, strategic and cultural
factors and will vary from state to state.
 The perceived opportunity cost of defence spending. The more the social
and developmental demands that are placed on government, the higher the
opportunity cost of defence becomes. In many African countries, the pressure to
allocate resources to economic and social development at the expense of the
security sector is strong. The balancing factor, in this case, must be to also
determine the “opportunity cost of not spending on defence”. This implies the
determination and acceptance of the associated risks to national security.
 The size of the national budget. Regardless of the needs, defence spending
will always be limited by the available national income. This simply implies that
defence policy and strategy must be aligned with the dictates of the feasible.
Defence policy and strategy must be made within the confines of the freedom of
action that the national resource base allows.
 Defence spending spin-offs. Where positive spin-offs for the economic,
technological and social development of the country can be obtained, defence
spending will receive stronger national support. It is therefore to the advantage of
88

29. defence strategists and planners to positively seek ways and means to enhance
spin-offs on defence spending.
6.2.3 Defence Review Process
In order to determine exactly how the defence forces can best meet those
threats identified by the security environment assessment as within their purview,
governments need to undertake a comprehensive defence review process. This
review should elucidate the principles, values, processes, structural ramifications
and resource implications of the defence sector. A comprehensive review will
include consideration of the following issues to the extent possible:
 Challenges for the defence function in the forthcoming decades. This
chapter should outline the key principles upon which defence will be based,
including:
o The principles and values upon which the management of defence in a
democracy will be based.
o The role of international law in the management of the defence function.
 Structure of democratic civil-military relations. Issues addressed in this
chapter should include:
o Existing and proposed constitutional provisions governing the conduct of
civil-military relations.
o The authority and powers of both parliament and the executive in
overseeing the defence function.
o The role and organization of the ministry of defence in overseeing and
managing the defence function.
o The role played by education and training in the armed forces and other
defence-related bodies in ensuring the creation of a military
professionalism conducive to effective civil oversight.
o The rights and duties of military personnel.
o The relationship between the armed forces and other defence-related
groups and civil society.
o The responsibilities of the government towards the armed forces and other
defence-related groups.
 The relevance of the security environment assessment for the defence
sector. This should discuss the impact of the international environment, the
regional environment, the sub-regional environment and the domestic
environment on the force design requirements of the armed forces and any other
defence-related bodies, such as paramilitary forces.
 Description of the roles and functions of the country’s defence function.
This chapter should detail the tasks provided for defence in the constitution as
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30. well as any other tasks that the government may, from time to time, expect the
armed forces and other defence-related bodies to execute.
 Human resource requirements. The key issues for this chapter are:
o Any envisaged restructuring process within the armed forces or other
defence-related bodies.
o The personnel procurement system: volunteer, conscript,
volunteer/reservist etc.
o Where relevant, the proposed demobilization process.
o The management of equal opportunity and fast-tracking programmes
within the armed forces and other defence-related forces.
o Labour relations and grievance resolution within the armed forces and
other defence-related forces.
6.3 DEFINING POLICY AND PLANS
Section 4. 4 discussed a generic policy management process that could be
applied to the security sector. Figure 4-2 outlined a process for conducting security
assessments and developing policy frameworks and operational strategies that could
be applied in the defence, intelligence and public security sectors. The discussion in
this section will focus on a number of key issues in applying these processes to the
defence sector: 1) management of the defence review process; 2) strategic defence
planning; 3)
6.3.1 Management of the Defence Review Process
The management of a defence review process could be the responsibility of
either the ministry of defence in regular consultation with other role players or the
joint responsibility of the ministry of defence and an appropriate parliamentary
committee on defence. The latter is suggested as a preferred option given the fact
that joint “ownership” of the process by both the executive and the legislature will
provide greater legitimacy and credibility to the review process. It is also the
preferred option from the perspective of underscoring that the defence forces advise
the civil authority in developing policy and strategic plans; they do not control that
process. (The allocation of roles and responsibilities between the civil authorities
and the defence forces are shown in Box 6-2. Appendix 2 discusses the role of the
executive in developing and implementing policy in the security sector.)
It is accordingly essential in the process of drafting the defence review that
approval for each stage of the drafting process is obtained from the major
stakeholders (the ministry of defence and the appropriate parliamentary committee)
and is communicated to all interest groups and public groupings interested in and/or
affected by the process. Briefing of stakeholders can be done on the basis of regular
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31. report-backs and approval processes with the ministry of defence and the
appropriate parliamentary committee.
Box 6-2. Roles and Responsibilities of Government and the Defence Forces
Government Defence Forces
1. Clear national security and foreign policy and 1. Professional and expert policy advice and
objectives. planning inputs to government.
2. Clear national defence policy (including 2. Professional and accountable management
strategic defence posture) and objectives. of the defence function.
3. Clear vision on the character, culture and 3. Maintenance of a professional, mission
values of the defence forces. ready and disciplined defence forces.
4. Commitment towards defence including 4. Professional conduct of operations in
recognition of the special needs of soldiers, alignment with policy and law.
provision of mission suitable weapons and
equipment and sufficient funding.
5. Determination of defence allocation at macro 5. Determination of defence allocations at
level over the medium to long-term. micro level.
Feed-back to the public and relevant interest groups will require the
formulation of an appropriate communication strategy and the appointment of a
person/persons to manage this strategy. Regular communication with interest
groups and the public can be accomplished in various ways, including (but not
limited to) convening provincial workshops, convening academic/NGO seminars, and
regular media coverage.
It will be important for the role players involved in this process to develop
mutually acceptable expectations of the process and to agree on the key concepts,
values and principles underpinning the policy paper that is produced as a result of
this process. The methodology in the review process should facilitative and
interactive. It should rely strongly on consensual and conflict-resolution approaches,
as well as both analytical and synthetic skills to “flesh” out the key conceptual issues.
A defence review needs to draw upon the security environment assessment
to provide guidance on the likely roles and tasks that the armed forces and other
defence-related bodies will be expected to execute. Box 6-3 outlines a number of
important considerations in this regard.
A defence review also requires a definition of the proposed defence posture
which underpins the extent of one's capabilities. The following factors are important
in determining the size and nature of force required:
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32. Box 6-3. Integrating the Security Environment Assessment into Defence Policy
In integrating the findings of the security environment assessment into defence policy
development, it will be especially important to consider the following:
 The future is inherently unpredictable.
 There needs to be a link between defence interests and emerging national interests. [Not
clear on what this means.]
 Generic defence functions should not be considered in abstract isolation but should be
operationalised within the current strategic environment within which a country finds itself.
 Defence functions should be considered in terms of their relative importance and prioritised
accordingly.
 The question of internal stability is invariably of importance to many developing countries.
While internal stability is largely a public security function, there are some issues that the
defence forces will need to take into account:
o Crime and violence;
o Threats to the constitutional order (secession, insurrection, and so on);
o Trans-border crime and drugs;
o International and internal terrorism;
o Separation of the roles of the police, the armed forces, and any paramilitary
forces.
 A decision must be made about the level at which a national defence posture will
be predicated. This could be both at a political level – the level of national intent
– and at a military level - strategic, operational and tactical levels.
ii. Clear definitions will be required as to what constitutes
defensive or offensive capabilities at a strategic,
operational and tactical level.
iii. The implications of the different levels of posture needed to
be linked to weaponry, weapons systems and their range,
and force levels.
iv. Regional perceptions constitute the yardstick against which
an offensive or defensive posture could be determined. It
was important in this regard to prioritize Confidence and
Security Building Measures and the development of common
security regimes in the region.
A Defence Review process will need to be managed in a consultative mode and it
would, hence, be prudent to consider the following:
a. The adoption of a definite logic towards the Defence Review. The
determination of defence requirements should follow a sequential
methodology which outlines the following:
I. The “Ends” towards which the defence function will be
oriented. These “ends” should be the national interests as
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33. defined in the Constitution and the existing and proposed
policy.
ii. The Defence Functions which would flow from an
appreciation of the ends outlined above.
iii. The Tasks which will be allocated to each functional arena.
Self-Defence of the country for instance would entail a range of
tasks such as border protection, maintenance of a conventional
deterrence capability etc. These tasks need to be detailed and
prioritized.
iv. The Force Design Options that emerge from a prioritization
and consideration of the tasks. The Force Design Options
should specify the force levels, organizational features,
and equipment requirements of the proposed force.
v. The Resources required to fund the various Force Design
Options. This will include the force levels, equipment and the
funds required for the force.
b. The phasing of the Defence Review into two phases:
I. The first phase dealing with the tasks of defence, capabilities
required by defence, force design, force levels and budgetary
requirements of defence. This phase (the “hard issues”) should
produce the force design options referred to above.
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34. ii. The second phase dealing with the resources and support
elements needed to support the force design. This phase, (the “soft
issues”), should deal with issues such as human resource detail,
land and facility requirements, legal issues and role of part-time
forces/reserves/militia.
6.4 ALLOCATING RESOURCES
Defence economics, as a sub-section of the broader field of economics, is
focussed on that part of the economy that involves defence-related issues such as the
level of national defence spending, the impact of defence spending on the economy, the
opportunity cost of defence spending on social welfare and development, the spin-off for
the technology of the country and ultimately the implications of defence spending on
national, regional and international peace and stability. Most of these factors are
external to the defence department and relate to the relationship between the
department and its external environment. Defence economics does, however, also
address the important matter of defence resource management within defence
departments to ensure the most efficient utilisation of the defence allocation. As the
worldwide demand is for decreased defence spending and more spending on social and
developmental priorities, the most efficient management of the scarce resources
available for defence becomes increasingly important. The concept of “more bang for
the buck” becomes a driving factor in defence planning, programming and budgeting.
In this field of defence economics, as in all other fields in the study of economics, one of
the fundamental questions to be resolved is that of resource allocation. How much is to
be allocated to defence on the whole, how is this allocation sub-divided amongst the
services and other contenders, how are priorities determined and how is efficiency,
transparency and accountability as well as sound public expenditure management
assured?
This section discusses the rationale for strategic defence planning to determine the
macro (national) level of defence spending and the development of a defence plan,
programme and budget to the micro spending level. It also looks at issues of efficiency,
transparency and accountability in defence management. The intension is not to
provide an exact model or pro-forma but rather to determine a conceptual logic, which
can serve as a generic basis for defence planning, programming and budgeting and as
such for the determination of resource allocation.
STRATEGIC DEFENCE PLANNING
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35. VARIABLES IN STRATEGIC DEFENCE PLANNING
Too often the defence debate is dominated by short-term views on security, based on
snapshot views of the world, and the cost of defence. The argument is “there is no
threat, so why spend?” As has already been stated, strategic situations change rapidly
whilst the building of defence capabilities and expertise takes time. All strategic
defence planning must therefore take the long-term view. To do so it is necessary to
understand the major variables in defence planning. These are the ends, ways and
means of defence. Government and defence planners share the responsibilities for the
determination of these ends, ways and means. Figure 1 presents these variables
schematically.
MEANS
ENDS
$
Strategic
Gap or Risk
WAYS
Figure 1. Defence Variables: Ends/Ways/Means.
This scale indicates that what government requires from defence (Ends), taking into
consideration the approved defence posture (Ways), must be balanced by defence
capabilities (Means) and that this requires a determined amount of resources. The
scale can be brought into balance by either reducing ends, adapting the defence
posture (moving the pivot left or right) or by increasing means and thus resources. If
there is an imbalance or inconsistency between ends, ways and means this will result in
a strategic gap between what needs to be done and what can be done. This strategic
gap must be managed as a risk by government. These ends, ways and means are
discussed in brief in the succeeding paragraphs.
Ends of Defence. Defence Ends are the required defence outputs in support of
government’s goals and objectives that include peace, security, stability and public
safety. The primary responsibility for determining the ends of defence rests with
government (Parliament and Cabinet).
95