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.
Contemporary armed conflict has undergone a characteristic evolution driven by the rapid integration of technology and finance into the fundamental architecture of warfare. This essay argues that while complexity and multi-actor dynamics have always characterised conflict, the speed and depth of technological and financial development in recent years have outpaced existing frameworks for conflict analysis and peacebuilding practice. Drawing on case studies including Russia's war against Ukraine, North Korean cyber operations, and cryptocurrency conflict financing, the essay develops three central arguments: that conflict complexity has demonstrably increased alongside technological and financial development; that cyber capabilities, artificial intelligence, information warfare, economic sanctions, and cryptocurrency have evolved from peripheral tools into primary conflict tools; and that this evolution demands a more technology and finance fluent peacebuilding community. The essay concludes that traditional mediation and verification frameworks, designed around identifiable state actors, territorial disputes, and kinetic military operations, are not structurally equipped to address modern conflict's invisible fronts, and that the peacebuilding field must adapt with urgency and knowledge equal to the conflicts it seeks to resolve.
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.
The success story of the crypto-economy is undeniable. Crypto has gradually been making headway into the traditional financial sector. Acceptance of and demand for distributed ledger technologies (DLT)-based securities are on the rise. ‘Initial token offerings’ (ITOs) or ‘security token offerings’ (STOs) are on the verge of entering the mainstream — especially in the realm of small and medium enterprise (SME) financing. The borderline between the traditional financial markets and the crypto-economy is starting to blur. The players in the financial markets, however, are not the only ones beginning to realise the potential of Blockchain, and, more generally, DLT. The public sector is also slowly waking up. Recent developments include new legislation in Liechtenstein, France and Germany, as well as various initiatives in other member states. Amid all this enthusiasm and optimism, there is one issue that undeniably still dampens the mood: current EU financial markets law poses significant, and in some cases insurmountable, obstacles to the integration of DLT-based assets into the traditional financial system. In this paper, we analyse what currently appears to be the most pressing of these issues. These are the strict and inflexible rules of the Markets in Financial Instruments Directive/Markets in Financial Instruments Regulation (MiFID1/MiFIR2) regimes and the Central Securities Depositories Regulation (CSDR) in the area of post-trade securities settlement that do not do justice to the characteristics of DLT and that at present almost completely prohibit any organised trading in DLT-based securities.
This article presents the first open source assessment of how the US, Chinese and Russian militaries discuss the application of blockchain technologies in warfare. Bilyana Lilly and Sale Lilly examine mentions of blockchain in the official military publications of each country – in their respective native languages – to identify the similarities and differences in each military’s blockchain outlook, ranging from mitigating cyber security vulnerabilities to supply chain management and battlefield logistics management. They conclude by offering several policy implications and observations for defence planners.◼
Defense, Military, and Policy Studies
European and Russian Geopolitical Military Strategies
In the aerospace industry, competition is high and the need to ensure safety and security while managing costs is paramount. Furthermore, stakeholders—who gain the most by working together—do not necessarily trust each other. Now, mix that with changing enterprise technologies, management of historical records, and customized legacy systems. This issue touches all aspects of the aerospace industry, from frequent flyer miles to aircraft maintenance and drives tremendous inefficiency and cost. Technology that augments, rather than replaces, is needed to transform these complex systems into efficient, digital processes. Blockchain technology offers collaborative opportunities for solving some of the data problems that have long challenged the industry. This SAE EDGE™ Research Report by Rhonda D. Walthall examines how blockchain technology could impact the aerospace industry and addresses some of the unsettled concerns surrounding its implementation. Click here to access the full SAE EDGETM Research Report portfolio.
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.
European finance is becoming increasingly cross-border, while the European architecture for safeguarding financial stability - including decision-making processes for providing financial-stability public goods - have remained decentralized with some explicit mechanisms for coordination across countries. Policy makers are aware of the limitations of the existing institutional setting, but opinions on how to proceed, including on burden sharing, are lining up along national and regional political lines with less attention paid to European needs. This paper applies the 'economics of alliances' to examine these European policy challenges. The paper establishes benchmarks for assessing the ability of Europe's existing institutional architecture to efficiently allocate resources to safeguard the EU financial system against systemic threats to stability, such as the insolvency of a pan European bank.
With the destructiveness of modern conflict, varied national and international calls have been made to constrain the employment of weaponry. Efforts to establish prohibition regimes attempt to cut through disorderly and diverse sociotechnical assemblages to locate the principal source of a problem in order to justify a certain course of action. Science and Technology Studies cautions against separating elements of socio-technical assemblages. Likewise, the fragility and contestability of particular determinations of the acceptability of weaponry are apparent in contemporary prohibition debates. Even while many acknowledge the problems of definitely locating some source of acceptability, many arms-control discussions invariably entail efforts to do just that. This paper considers the dynamics of the claims and counterclaims offered to support contentions about the acceptability of the employment of weaponry and thereby justify certain control regimes. As argued, when faced with fundamental difficulties and dilemmas associated with offering determinations of where unacceptability rests, actors engage in various strategies to deny, defer, deter and deflect having to resolve the complicated issues at stake. Alternative characterizations and definitions involve alternative ways of shifting the burden of proof for resolving intractable problems. The paper proposes the notion of ‘disposal strategies’ as a useful way of characterizing the processes of ordering, whereby actors attempt to manage persistent problems and dilemmas.
One of the major government reform initiatives in the industrialized democracies in the 1990s has been the new public management. In the United States, the initiative gained considerable attention when a report issued by a commission chaired by Vice President Al Gore endorsed the development of performance-based measures in government. As prescribed by the National Performance Review (NPR, 1993), agencies should be freed from the red tape of detailed specifications and by Congress. Instead, agencies should be given goals and performance objectives (Thompson, 1991; Meyer and Khademian, 1996). Among the prescriptions of the National Performance Review are recommendations to implement mechanisms that would provide greater flexibility in budgeting processes, particularly in the area of national security. Ex post contingency budget execution in defense already provides considerable flexibility for defense spenders--as we illustrate by a case study of the financing of United States involvement in Bosnia. Yet, the spending discretion that has sustained U.S peace-keeping in Bosnia is quite different from, and in some respects antithetical to, the flexibility championed by advocates of the new public management. The message that this article conveys, based on our analysis of the Bosnia experience, is that neither the current system for funding defense contingencies nor the proposals of the new public management achieve the goals of providing accountable and effective mechanisms for funding these operations. Thus we offer modest proposals for reform that may make changes akin to those of the new public management compatible with traditional forms of budget execution. If implemented, the new mechanisms could permit the executive and legislative branches to focus on the policy questions inherent in post-cold-war military contingencies. At present the minutiae of the budget process serves as a lightning rod to prompt debate and diverts attention from a priori policy questions. The proposals outlined would reverse this situation. The New Public Management and Budgeting in Defense One of most provocative applications of the new public management to defense is by Thompson and Jones (1994). Instead of micromanagement of the defense budget through line items in appropriations, restrictive appropriations, and endless reporting, advocates of the new public management urge Congress to return to its classic role as the deliberator of important policy issues related to spending, programs, and strategy. Mission budgeting is central to the reforms suggested by Thompson and Jones. As part of the broader decentralization of the Pentagon, where performance measures replace detailed prescriptions and rigid compartmentalization of budgets and spending, mission budgeting would, they concede, require significant changes in the law and practice of national security appropriations. Under mission budgeting, when the Department of Defense appropriations are enacted by Congress, obligation authority would be given to mission centers, or joint operational commands, rather than to the military services. The accounts funded would thus be mission accounts rather than department accounts. To make this change more than merely cosmetic, however, Thompson and Jones advocate implementing the recommendations of the National Performance Review to increase the Pentagon's discretion to transfer funds between accounts and across fiscal years. Thus, congressional budgeting for defense should be, in their words, permissive, continuous, and selective [and] focus on all of the cash that ensue from Congress's programmatic choices ... new obligational authority should be expressed in terms of the discounted present values of those cash flows (Thopmson and Jones, 1994, 233). They would de-emphasize the annual budget resolution, do away with the president's budget, and focus attention on the decision to go ahead with a program or activity. …
This monograph examines the adequacy of the joint task force (JTF) to operate effectively in the context of wartime uncertainty. Military theorists have long understood the deleterious effects of uncertainty on the conduct of war. Commanders never know as much about the enemy or environmental conditions as they would like, so they decide and act on the best information available, however incomplete. In coping with uncertainty, there are proven methods of structuring one's organization to meliorate its effects. These methods involve decentralizing command, lowering decision thresholds, and creating self-contained, semi-autonomous units. U.S. military doctrine recognizes the need for JTFs in responding to the global commitments of the nation. Unfortunately, Service incompatibilities and parochialism often have hampered the joint commander's ability to get the job done. Congress mandated reform through the Goldwater-Nichols Department of Defense Reorganization Act of 1986; the result has been to streamline joint command structures, thus making them better able to deal with uncertainty. The experience of multi-Service operations during World War II confirms the wisdom of creating joint task forces when doctrinal conditions are met. My research into two of these operations -- FLINTLOCK in the Marshall Islands and HUSKY in Sicily – indicate that an integrated joint command structure, akin to a modern JTF, reduces the effects of uncertainty by allowing the central headquarters to operate with less information.
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.