A crucial ingredient in the creation of accountable armed forces and establishments is having an effective and transparent process of allocating, managing and overseeing resources dedicated to the defence and security sectors. Public oversight of a nation’s defence and security sector is key to maintaining democratic control of the government and armed forces. Defence budget documents (including proposed budgets, enacted budgets, and audit reports) are the primary tools that give legislators and citizens the information they need to hold governments and armed forces accountable for their decisions.

Disclosing defence-related income and spending data is a sensitive area, and a certain level of confidentiality may be justified and necessary.  Nearly all countries maintain some level of confidentiality regarding funds usually spent on intelligence, research and development (R&D), or the protection of witnesses, for example. Confidentiality and the protection of highly sensitive information can be compatible with transparency, however, if sound management principles and legal systems are used. Transparency in the defence budget process is not limited to the disclosure of information, but also involves the establishment of an effective and robust system of oversight and control.  

Countries have had varying experiences with the management of secure information. Some have made significant progress and maintain a well-justified level of secrecy, while ensuring that accountability is enforced. Others, however, continue to use confidentiality and secrecy and the protection of state assets as a veil for dubious activity.

Transparency in Defence Budgets

Opaque or corrupt defence spending decisions hamper the effectiveness and efficiency of armed forces. Adequate and transparent defence budgeting is needed in order to allocate resources between the different functions performed within the defence and security sectors in a manner that maximizes strategic and operational performance, and to ensure that those resources are not used for personal gain.

As taxpayers, citizens ultimately supply the financial means that enable their governments to provide public services, including defence and security services and the military. The defence budget is the critical document which allows citizens to understand how their funds are being spent on defence and security, and to hold their governments and militaries accountable for their actions.

The trade-off between defence spending and alternative investment in public services is widely discussed. Citizens have the right to see how their money is being spent. This is particularly true in less developed countries, where excessive or unnecessary defence and security-related expenditure, void of public oversight, may diminish funds for other public services like education, health, or infrastructure.

Excessive secrecy, while theoretically protecting national security, can translate into higher levels of uncertainty and suspicion on a regional and global level. There is a growing realization among members of regional organizations that stability and security can be enhanced through more disclosure of defence-related information. NATO members and partner countries, for example, are required to submit defence spending information on an annual basis. The usefulness of such practices is now pushing other regions to create similar initiatives. Strong commitments have surfaced, particularly in South America, where higher degrees of defence budget transparency are seen as a significant boost to regional cooperation and stability.

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