Theoretical and Practical Approach to the Analysis of Financing Data of the Armed Forces of Ukraine and the other military formations

• Main Author: Pakholchuk Vadym
• Format: Article
• Language: English
• Published: Mykolayiv National Agrarian University 2019-03-01
• Series: Modern Economics
• Subjects: military expenditure; military budget; financial support datasets; SIPRI; WMEAT
• Online Access: https://modecon.mnau.edu.ua/en/?smd_process_download=1&download_id=10812

Introduction. In this article the main emphasis of the research were done on the theoretical and practical approaches to the military budget expenditures. The military finance is one of the biggest components of the financial system of Ukraine. So, according to the nowadays situation and military conflict in Ukraine we searching a new ways to increase this kind of expenditures. Purpose. That’s why the problem of data evaluation and comparison is so popular today. When we are talking about NATO integration and cooperation, we need to understand and compare financial statement. Our purpose in this article was to find out that comparison basis for Ukraine and the other countries according to SIPRI and WMEAT approaches. It could become the source for future researches. Results. In results of the research, we should mention that time series analysis of the budget in national currency could be done only in national currency, but according to the article, inflation should be taken into account. But the most complex approach is international currency evaluation during the discount time. Another valuable thing is the way of the total military expenditure estimation, because it’s not only the Military Forces. In the process of work, it was concluded that alliances, with the involved countries, has an impact on expenditures. The general situation in the regions and geopolitical goals play a significant role. It is expedient to carry out an analysis of cost-effectiveness using expert approaches and econometric models that take into account not only GDP but also the overall state of the economy. This is because the cost effectiveness does not depend on their volume. Conclusions. The analyses conducted by world economists argue that military spending assumes the role of a financial instrument against the recession and the stagnation of the economy by increasing effective demand or solving the problem of scarcity of consumption. Military expenditures create high alternative costs for consumption, investment, and other public expenditures. Moreover, military spending a serious burden on the budget and accelerates inflation. In particular, all these preconditions concern the implementation of economic analysis of the defense spending, their share in the state and their quality and orientation, such as the defense budget. We can conclude that it is necessary to construct complex econometric models of estimating the budgets of neighboring countries and regions, but they will need to take into account the theoretical and practical aspects of price determination, inflation, purchasing power parities, and different approaches to evaluating and converting budgets of different countries.