The Nigerian Navy’s financial management faces significant challenges due to manual processes, fragmented systems, weak auditability, and poor integration with national treasury mechanisms. This paper proposes a comprehensive digital transformation model leveraging blockchain technology, artificial intelligence (AI), and Treasury Single Account (TSA) integration to modernize naval finance operations. Grounded in principles of security, transparency, interoperability, and automation, the model introduces blockchain-enabled audit trails to ensure immutable transaction records, AI-driven budget forecasting for predictive financial planning, and seamless TSA connectivity for real-time cash flow monitoring. By addressing inefficiencies in budget forecasting, procurement transparency, and fiscal control, the model enhances financial discipline and operational readiness. It also promotes institutional accountability and fiscal agility essential for sustaining naval capabilities within constrained defense budgets. Strategic recommendations focus on policy reforms, leadership engagement, capacity building, and cross-departmental collaboration to facilitate sustainable adoption of this digital architecture. This framework positions the Nigerian Navy at the forefront of public sector financial innovation, aligning with global best practices.
Economic Guarantees of Security (EGS), Internal Resistance Series, Working Paper No. 4 Work in Progress —August, 2026 Affiliation: International Institute of Political Philosophy (Kyiv, Ukraine) Author: Prof. Aleksandr Rozenfeld Contact: aleksrozenfeld2021@gmail.com Abstract This paper is part of the research series Internal Economic Resistance within the broader research program Economic Guarantees of Security (EGS). It develops the concept of business economic resistance as an endogenous constraint on military aggression and examines its role within a two-loop model of deterrence. Unlike conventional approaches that regard business primarily as a passive object of wartime mobilization, this study conceptualizes business as a decentralized network of autonomous economic agents possessing independent objectives, assets, contractual obligations, and decision-making authority. The paper argues that the principal source of business resistance lies not merely in expected financial losses but in the anticipated erosion of entrepreneurial freedom, property rights, contractual stability, market access, and institutional predictability. These institutional threats generate rational behavioral responses, including reduced investment, capital flight, production adjustment, contract restructuring, market reallocation, informal economic activity, and business exit. Although these responses rarely take the form of organized political protest, their diffusion through production, financial, contractual, and logistical networks gradually reduces the fiscal, technological, and organizational capacity of the state. The paper introduces the concept of an economic mobilization limit, defined as the point beyond which additional state pressure no longer increases, but instead diminishes, the effective resources available for military mobilization. Particular attention is devoted to the anticipatory nature of business behavior. Economic resistance frequently begins before the outbreak of war, as firms respond to expected sanctions, mobilization measures, regulatory restrictions, and institutional uncertainty. Consequently, well-designed systems of Economic Guarantees of Security can influence expectations at the decision-making stage, activating endogenous economic constraints before military aggression occurs. The proposed framework extends traditional deterrence theory by integrating external economic measures with internally generated behavioral responses of business. It demonstrates how decentralized economic decisions can complement international sanctions and other preventive mechanisms, thereby strengthening both the prevention of aggression and the conditions for its termination. One of the key conclusions of this work is that military aggression can be not only prevented but even stopped not only by external pressure measures but also by the economic behavior of businesses. The work presents and expands on a two-loop deterrence model that links international pressure measures with the internal disobedience of economic agents.
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Infrastructure Resilience and Vulnerability Analysis
Abstract This study examines the economic and geopolitical determinants of Indonesia’s defense expenditure from 1984 to 2022 using the Autoregressive Distributed Lag (ARDL) model to capture both short-term and long-term dynamics. Recognizing the contextual relevance of Indonesia’s Total People’s Defense and Security System (SISHANKAMRATA), the analysis relies on conventional military expenditure data (% of GDP) due to the absence of consolidated multi-ministerial records. The results show that in the short run, defense spending is highly sensitive to macroeconomic shocks: inflation, exchange rate volatility, and foreign direct investment exert negative effects, while debt, trade openness, and regional military expenditure strengthen budgetary allocations. In the long run, macroeconomic fundamentals (debt, growth, inflation, and foreign investment) together with neighboring countries’ military spending drive defense expenditure, whereas regional average spending has a negative effect and U.S. military expenditure does not show a structural impact. These findings underscore the dual pressures of fiscal fragility and regional security competition in shaping Indonesia’s defense budget. Policy implications highlight the importance of inflation-adjusted and exchange rate–resilient budgeting, sustainable financing mechanisms such as defense bonds or a Defense Sovereign Wealth Fund (D-SWF), and deeper ASEAN defense cooperation to balance security needs with fiscal discipline. This study contributes a macro-level perspective on defense economics under conditions of institutional fragmentation, offering a framework for future comparative and panel-based research across decentralized security systems.
Internal audit is an independent activity that provides an objective professional opinion of advisory character (recommendations on how to improve the functioning of the system), with the purpose of contributing to the improvement of the organization's business. It assists the organization in achieving its goals by systematically and disciplinedly assessing and evaluating risk management, existing controls and management of the organization. Also, internal audit is one of the three key components of the public sector internal financial control framework, and is defined as a "functionally independent and decentralized internal audit" that reviews the effectiveness of internal controls. Internal audit provides support to the organization in achieving management goals through auditing financial management and control systems, and enhances business value through good recommendations. Internal audit is not the same as inspection! Internal audit does not penalize or sanction! The introduction of an adequate system of internal controls and audits into the defense system achieves and ensures the efficient and rational use of funds to finance defense expenditures, on the one hand, and on the other hand significantly narrows the space for significant irregularities, frauds, corruption and the appearance of various forms organized crime. The audit function assists management insomuch as it indicates what is wrong with the entity's business and provides recommendations on how to create the preconditions for a better business. The role of the audit is that it represents: 1) the management controlling instrument used by the management of the organization to determine where the organization's failures are located; 2) the control over the functioning of the Accounting and Internal Financial Control system. This form of control involves the organization, policies and procedures used by budget users to ensure that the tasks entrusted to them are performed. It verifies that the resources used in the execution of tasks within the competence of the budgetary beneficiary have been used in accordance with the set goals.
The G7 should address new, unprecedented and highly disruptive issues that characterise our complex world, rather than well‐understood international problems that fit into existing categories. We argue that the G7 can do this by playing to its strengths – informality and like‐mindedness in particular – in addressing emerging and transversal issues such as Artificial Intelligence (AI) and cryptocurrencies.
The scope of the system of the JST financial management is connected by these individuals with the multitude and the kind of running tasks on individual rungs of the local self-government (commune, district, province). The right realization of the JST share in public incomes appropriately for tasks falling to them is connected not only with a need to make the distribution of income public between the state and the local self-government and individual his rungs, but adaptations also amounts of obtained profits on assigned sources of tasks to essential expenses on the cost recovery performed. Similarly this principle must be taken into consideration at the forming of the JST liberty of the subject up to the general subsidy and specific subsidies from the state budget, of instruments of acts serving balancing budgets local and commissioned to the execution of tasks in the form, in it of defensive tasks. An entirety of planning, organizational and material-financial undertakings is resulting in defensive tasks of couples fulfilled by government administration authorities, of local self-government and other operators and state institutions, as well as entrepreneurs on which a statutory obligation of the defensive execution of tasks was imposed. Implementing the principle of the decentralization of the authority of the state in Poland the considerable part of duties of the state was handed over to authorities self-government and representing them for organs. From here they are also performing JST substantial role amongst entities performing defensive tasks, in frames non-military of system of the defensive state. Defensive JST tasks are being financed from many sources. And their financial needs, in this respect, result mainly from character and the scope of performed objectives.
This paper is concerned wth the classic "guns versus butter" dlemma.There are two countries engaged in an arms race.The first country is a decentralized market economy and the second country is a command economy.This asymmetry might capture the difference between West and East.The government of each country maximizea the life-time utility of the representative consumer, which depends upon conaumption, leisure and defence.Defence is a characteriatic, which depends positively upon the own weapon stock and negatively upon the foreign weapon stock.The government of the first country usea distortionary taxes on labour ncome to finance the provision of public goods, whereas the government of the second country simply commands its constituents.This paper contrasts coordinated and decentralized decision making.It is argued that coordinated policiea lead to lower levels of government spending and arms accumulation.As far as decentralized decision making is concerned, it is crucial to distinguish between openloop, general closed-loop and subgame-perfect Nash equilibria.The openloop Nash equilibrium relies upon pre-commitment to an announced path of ~This paper was presented to a Meeting of the European Public Choice Society, April 2-5, 1986, Noordwjkerhout, The Netherlands and to a Conference on International Economic Security organized by the Centre for Economic Policy Research, June 19R6, London.The authors are grateful to the participants of those meetings for their comments and to A. Markink for excellent computational assistance.government spending and is the solution concept moet frequently used in the literature.The problem with this concept is that it relies upon very restrictive i nformation sets and over-eatimates the inefficiencea generated by the arms race.The closed-loop Nash equilibrium allows each country to have knowledge of current and past weapon stocks.Within this framework it is possible to model threata, which can induce cooperative behaviour.The principle of subgame-perfection gves uniquenesa and credibility within the class of closed-loop Nash equilibria.This subgameperfect equilibrium coincides with the open-loop equilibrium when utility is separable in home and foreign weapon stocks.In general, this is not the case and subgame-perfect equilibria typically lead to less arms accwnulation than open-loop equilibria.This i llustrates that i n a gametheoretic context an increase in information can make both countries better off and countries should therefore be encouraged to monitor the weapon stocka of their rival.The results are illustrated wth a numerical example based upon CES utility functions and linear technologiea.This gives an opportunity to test a recently developed algorithm for the calculation of aubgameperfect equilibria i n dynamic gamea.