account the individual characteristics of each policy process. Each policy process hasunique characteristics, and there ca...
     Do key actors have sufficient weight to participate effectively in the policy process?      If not, to what extent i...
   Determining the consequences of each option, including impact on the budget over    the medium term.   Predicting the...
natural disasters, delivery of humanitarian assistance, support to domestic police    services, protection against poachin...
   Who will interpret the policy (which external and internal role players for instance)?       When these questions are ...
Figure 4-2. Process for Conducting Security Assessments and            Developing Policy Frameworks and Operational Strate...
Figure 4-3. Security Environment Assessment                        Evaluate all factors that may generate violent         ...
The central values, concepts and principles of the policy framework form thebasis of the operational strategy for each com...
Other issues that need to be taken into account during the process of policyimplementation are:   Assigning implementatio...
Defence, public security and intelligence plans are the documents that specifythe measurable outputs that these sectors wi...
assessed for their effectiveness and continued relevance. Monitoring involves theroutine checking of the policy against th...
   Oversight bodies must have adequate information on the activities of each member    of the security sector and the cap...
CHAPTER 5                       MANAGING FINANCIAL RESOURCES24AIM        Sound fiscal management of the security sector is...
Figure 5-1. Linking Security-Sector Policy, Planning and Budgeting                              Stage 4                   ...
5.1.1 Sectoral Planning Process       As in any other part of the public sector, defence, public security and intelligence...
is by no means the only body responsible for the expansion of the resource envelope inthe course of the fiscal year, it fr...
One method of reducing opportunities to soften fiscal discipline found in otherkey sectors like health and education is to...
Box 5-2. The Importance of Transparency in Procurement Processes: The Tanzanian AirTraffic Control System PurchaseIn Decem...
The challenge role of the budget office not only ensures that decision makersconfront the full range of issues; it also wi...
security and no predictability of funding. At the same time, without transparent and    comprehensive defence/intelligence...
the features of internal audit but would be expected to subsume that function. As a     normal rule, the IG would be part ...
considered for inclusion in any pilot phase.5.2    KEY CONSIDERATIONS IN REFORMING BUDGETING SYSTEMS       Many of the les...
management in place. This means understanding “budget basics” such as    accounting, budget examination, estimating, forec...
CHAPTER 6                      MANAGING THE DEFENCE SECTORAIMThe aim of this section is to examine governance issues as th...
establishment and development of mission-ready military forces is a long-termmatter. It cannot be accomplished overnight w...
•   Defence spending spin-offs. Where positive spin-offs for the economic,       technological and social development of t...
6.2.1 Rationale for Defence Forces        All governments have two fundamental responsibilities towards their people:to en...
In making this calculation it is important to understand that the establishmentand development of mission-ready military f...
defence strategists and planners to positively seek ways and means to enhance    spin-offs on defence spending.6.2.3 Defen...
well as any other tasks that the government may, from time to time, expect the    armed forces and other defence-related b...
report-backs and approval processes with the ministry of defence and theappropriate parliamentary committee.  Box 6-2. Rol...
Box 6-3. Integrating the Security Environment Assessment into Defence Policy    In integrating the findings of the securit...
defined in the Constitution and the existing and proposed            policy.     ii.    The Defence Functions which would ...
ii.    The second phase dealing with the resources and support                     elements needed to support the force de...
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
Handbook on security sector governance.5
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Transcript of "Handbook on security sector governance.5"

  1. 1. account the individual characteristics of each policy process. Each policy process hasunique characteristics, and there can be no linear or rigid guidelines for managing apolicy 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 toconduct a major policy review. It then looks in more detail at three components of thepolicy management process: 1) policy development; 2) policy implementation; and 3)oversight. The discussion in this section focuses on managing a major policy reviewprocess in the security sector. The process itself can be applied to subsectoral policyprocesses.4.4.1 The Importance of Adequate Human and Institutional Capacity Institutional and human capacity are crucial to ensuring the successful outcomeof any policy process. Policy that has been developed without taking into accountinstitutional and human-resource constraints will act as no more than a vision with littlelong-term, operational utility. African countries experience significant human andinstitutional capacity constraints throughout the public sector. These constraints areoften most severe in the security sector. As discussed in section 3.5, the capacity ofcivilians in both the public and non-governmental sectors to participate fully in theprocesses of policymaking, implementation, and oversight in the security sector isextremely weak in most African countries. Perhaps ironically, security servicepersonnel are also often equally poorly prepared for the roles they need to play in thepolicy process. In most non-OECD countries, security force personnel are unable toassess threats, develop plans for addressing these threats, or manage the resourcesallocated 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 functionsrigorously. It is therefore critically important to conduct a realistic appraisal of the capacity ofall 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. 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 sectorpolicy process.4.4.2 Policy Communication, Dialogue, and Debate A central tenet of democratic governance is that policy should be developed andimplemented in a transparent and participatory manner. That is why policycommunication, dialogue and debate are at the center of the policy process. Theformulation and implementation of policy should also operate on the basis of the“principle of shared responsibility.” This principle dictates that participation in policyformulation is never the prerogative of one ministry or one set of actors alone. Thisdiversity must be reflected in the ethos, strategy and process of the management ofpolicy. Thus, for example, intelligence policy should not be determined solely by thebody or bodies responsible for managing the intelligence services. Nor should input besought only from intelligence specialists. Openness is required both within government and between government and thepublic. All relevant governmental actors – in all branches of government – must haveaccess to the information they require to play their constitutional roles in the policyprocess. The economic managers (finance ministry, ministry of planning and so on) arefrequently left outside security sector policy processes in African countries. Indemocratic societies following sound public expenditure management practices, theeconomic managers are involved from the beginning in order to help provide a realisticfinancial framework for policy development and implementation.23 Members of thepublic must also be adequately informed to enable them to provide input into the policyprocess and to assess government implementation of policies. The South African post-1994 experience of policy development in the security sector has suggested a numberof useful mechanisms for strengthening consultation during policy development. (SeeBox 3-4.)4.4.3 Policy Analysis Policy analysis is the backbone of any policy process. A successful policyprocess owes much to good policy analysis and the options it generates. A genericpolicy 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. 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 analyticalskills (especially, the ability to reason in a logical and coherent manner and to work in adeductive manner) as well as synthetic skills (the ability to integrate differentperspectives in a holistic manner).4.4.4 Initiating a Policy Process Policy is always initiated as a result of a deliberate decision and requires theappropriate authorization or mandate from an appropriate political or departmentalhead. The decision to review security policy or some portion of it will be made either bythe Cabinet or the legislature. [Is the latter correct? Do these hold for both presidentialand parliamentary systems?] In the security sector, there are four major factors thatinitiate 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. 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 tothe different parts of the security sector. It provides the framework for the discussion inthis section. Once a decision is made to conduct a major policy review, the first step is todesign 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. 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 providedwith guidance on the policy review process by the cabinet, the legislature or othermandated 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. (SeeFigure 4-3.) This assessment will examine potential threats to the country stemmingfrom both internal and external sources. The assessment will inform decisions abouthow the issues that affect the country’s security will be addressed. Some will requirethe attention of one or more of the country’s security services. Non-security actors willaddress others. Yet other issues will be addressed by a combination of security andnon-security actors. The objective is to identify those areas where the defence forceswill be engaged; those areas where the police service will be engaged; and those areasof concern to the intelligence services. It should also seek to develop a series ofguidelines on the principles, values andframework of a broad national security policy. Once the security environment Objectives of South Africa’s White Paper on Safety and Securityassessment is completed, policyframeworks for defence, public security and  Strategic priorities to deal with crimeintelligence can be developed. The  Roles and responsibilities of variousprocesses in these three areas should, role-players in the safety and securityideally, be managed in an integrated manner sphere.to avoid contradictions and inconsistencies.  The role of the Department of SafetyEach of these processes should also be and Security within the Constitutionalmanaged in a consultative manner to framework.enhance legitimacy and credibility of the Source: South Africa, Department ofoutcome. The policy frameworks for the Safety and Security, “Introduction,” In Service of Safety, White Paper on Safetydifferent sectors – defence, public security and Security, 1999-2004, Septemberand intelligence – will have somewhat 1998, http://www.gov.za/whitepaper/1998/different focuses. However, all policy safety.htm#Introframeworks should ideally identify the mainsectoral priorities, the fundamental valuesthat underpin the policy, the legal basis of the policy, and the roles of key actors in eachsector. While it is impossible to provide detailed cost estimates at this stage of policydevelopment, policy frameworks should reflect fiscal realities. 65
  6. 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 OperationalDepending on the issue Strategies/under consideration, Assessment of Options Strategic Reviewsinput may be sought Backgroundfrom: PapersMinistry of financeOther ministries notdirectly involved in the Operational Strategyreview process Force Structure Options within Context of Financial ParametersLegislatorsExternal expert reviewpanelsArmed forcesPolice Operational StrategyParamilitary forces Tasks, Capabilities, CapitalIntelligence bodies Requirements, Human Resources, Costing Economic PolicyInformal groups of Frameworkexperts from academia,industry, policy Including nationalcommunity, interest developmentgroups objectives, security Policy Frameworks budgeting processRelevant civil society (Figure 5-1)organizations Defence Public securityMembers 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. 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 SecuritySource: Clingendael assessment tool. 67
  8. 8. The central values, concepts and principles of the policy framework form thebasis of the operational strategy for each component of the security sector. Theoperational strategy includes tasks, capabilities, force design options, human resourceconsiderations, capital requirements, and budgetary requirements. The conveners ofthe review process develop a series of options for force structures that reflect thefinancial parameters provided in the review process guidance. Senior policy makersthen assess the options proposed. It is likely that additional information will berequested on one or more of the options and that the proposals will be modified beforea decision is made to select one of the options. Once the relevant executive branch actors have chosen an option, the policy willbe scrutinized by the legislature. The degree to which the legislature is able toamend the proposed policy will vary from country to country. All policies shouldultimately be approved by the legislature. The final step in the policy development process is dissemination of the policyand 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 developmentthan to policy implementation. It is often assumed that a good policy will producesatisfactory outcomes. In reality, policy outcomes are determined by governmentactions, not what governments state they intend to do. Implementation is thus the keyingredient of good policy. In implementing policy, it is important to bear in mind thefollowing 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. 68
  9. 9. Other issues that need to be taken into account during the process of policyimplementation 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 objectivesand the norms and principles underlying these goals. In order to implement policy, it isnecessary to develop long-term, strategic plans and to translate these objectives intoprogrammes that can be implemented and budgets that can support the specific plansand 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 thatthe government undertake a detailed sectoral needs assessment. It is equally importantthat planning occurs within the context of a credible, multi-year financial framework. Formost activities, a three-to-five year framework is adequate. This corresponds to themedium-term expenditure framework that many countries are adopting for overalleconomic planning. A much longer financial horizon – on the order to 20-30 years -- isrequired for major capital acquisitions. (The process of financial management of thesecurity sector is addressed in more detail in chapter 5.) 69
  10. 10. Defence, public security and intelligence plans are the documents that specifythe measurable outputs that these sectors will produce in pursuit of the government’sobjectives against agreed financial allocations. Sectoral plans should contain thefollowing 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 theplans and programmes developed to implement policy and b) actual application of thoseplans and programmes. As explained at the beginning of this chapter (in section 4.4), it is criticallyimportant to conduct a realistic appraisal of the capacity of relevant actors to manageand implement policy. Attention should focus in the first instance on individuals in keypositions. Methods of on-the-job training such as mentoring arrangements should beconsidered to the extent feasible. Where feasible, mentors should be sought fromcountries that have undertaken similartransformation exercises. Major institutional Box 4-2. Multiple Benefits of Regularblockages should also be prioritised and Evaluationmethods of overcoming them negotiated “Well-focused and properly timed evaluationamong the different stakeholders. [It would can: (a) provide the information needed tobe really nice to have a box giving an bring about mid-course corrections inexample where such human or institutional programs and projects; (b) allow for thecapacity 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 thepolicy process. It is often assumed that Source: Poverty Reduction and Economic Management Network, World Bank, Publiconce 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. 11. assessed for their effectiveness and continued relevance. Monitoring involves theroutine 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 policyand the extent to which they are being met. Evaluations can be conducted at all stages of implementation and should beendone regularly (Box 4-2). Some evaluations should be conducted using staff involved inimplementing the relevant policy and some should be conducted by independentevaluators. In all cases, the findings of evaluations should be fed back into the policydevelopment 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 andimplementation. However, unless there is a means of addressing the problemsidentified through evaluations, they will persist. There are two ways of achieving accountability in any sector. The relevantactors can be required to answer directly to all or some portion of the population of acountry. Alternatively, politicians and bureaucrats can be held accountable for theactions of those actors by defining a set of democratic governance criteria against whichthey are to be measured. Most security sector accountability is indirect, through thelegislature, the courts, the office of the auditor-general, and the like. There is somedirect accountability in the criminal justice sector through groups such as policecommissions, police monitoring groups, police-community liaison groups, andcommunity 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 meansof 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. 71
  12. 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 sectorthat efforts to strengthen the quality of leadership and the capacity of the civil authoritiesto manage and oversee the security sector target private-sector actors. While civilsociety actors cannot carry out formal oversight, they can support key oversight actorsin 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 POLICIESTO BE ADDED Summary of Main Points 72
  13. 13. CHAPTER 5 MANAGING FINANCIAL RESOURCES24AIM Sound fiscal management of the security sector is essential if a country is tohave effective, efficient and professional security forces that are capable of protectingthe state and its population against internal and external threats. Integrated planning,policy-making, and budgeting systems are necessary to achieve an appropriateallocation of public sector resources and to manage those resources effectively andefficiently. This chapter provides guidance on how this integration can be achieved forthe security sector. While it has often been argued that because of the sensitivity ofsecurity issues, the security sector is somehow different from other portions of thepublic sector. A central premise of this chapter is that, from a public policy and processperspective, the security sector shares many of the characteristics of other sectors andthat the citizens of any country will benefit from a security sector that is subject to thesame broad set of rules and procedures of other sectors. Section 5.1 describes how this process can take place in the security sector in amanner that is consistent with democratic, civil control of the security sector. Section5.2 examines a number of issues relating to reform of the budgeting process that areespecially relevant in the security sector.5.1 INCORPORATING THE SECURITY SECTOR INTO GOVERNMENT-WIDE FISCALMANAGEMENT PROCESSES There are four crucial, inter-related components to managing public expenditurein any sector: 1) sectoral planning; 2) a firm resource envelope for the entire publicsector; 3) sectoral allocation processes; and 4) the efficient and effective use ofresources. For these processes to be effective, each sector needs to follow good practicesinternally and to link with the broader government-wide fiscal management andoversight process. All of this must occur within the framework of democraticgovernance and the principles of sound budgeting and financial management.25 Thissection discusses how this process should work in the security sector, as portrayed inFigure 5-1.24 This chapter draws heavily on Nicole Ball and Malcolm Holmes, “integrating Defence into PublicExpenditure Work,” Paper commissioned by the UK Department for International Development, January11, 2002.25 Box 3-3 lists the key principles of democratic governance in the security sector. Annex 3 defines tenwidely accepted principles of sound budgeting and financial management. 73
  14. 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 thedefence sector only that was published in UK Department for International Development, “DiscussionPaper No. 1. Security Sector Reform and the Management of Defence Expenditure. A ConceptualFramework,” Annex 3 in Security Sector Reform and the Management of Military Expenditure: High Risksfor Donors; High Returns for Development, Report on an International Symposium sponsored by the UKDepartment for International Development, London, February 15-17, 2000, www.dfid.gov.uk, searchunder publications. 74
  15. 15. 5.1.1 Sectoral Planning Process As in any other part of the public sector, defence, public security and intelligencebudgets should be prepared against a sectoral strategy. Chapter 4 described theprocess by which security policy frameworks are developed and translated into plansand 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. Severalpoints 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 policiesrequire a sustainable macroeconomic balance, which is critical to the long-termeconomic health of a country. To attain a sustainable macroeconomic balance,governments must give high priority to exercising discipline over total publicexpenditure. Once the aggregate level of government expenditure is chosen, it is vital that thisfigure be accepted both as an upper and, as far as possible, a lower limit. An easilyexpanded resource envelope allows governments to avoid firm decisions on prioritisingpolicy objectives. Fiscal discipline is weak in many African countries. While the military 75
  16. 16. is by no means the only body responsible for the expansion of the resource envelope inthe course of the fiscal year, it frequently enjoys a privileged position. Governmentofficials, military officers and heads of state and government have intervened in theresource allocation process with flagrant disregard for established procedures and pre-determined spending priorities. Military officers have presented the treasury withinvoices for expenses incurred outside the budget framework. Defense ministers haverefused to share the details of defense spending with finance ministers and parliament.The full fiscal implications of arms procurement decisions, including debt incurred formilitary purposes, are more frequently than not reflected in budgets. At the other end of the spectrum, without a solid floor to the expenditureenvelope, resources are not predictable and operational performance will suffer.Although the defence forces and intelligence services are likely to receive preference intimes of fiscal shortfalls, this is by no means guaranteed (Box 5-1). Additionally, othersecurity forces such as police services and gendarmerie forces tend to have lessstability in their funding. It is therefore extremely important to have in place institutions that can achievelong-term macroeconomic stability, determine the overall resource envelope for publicexpenditure, and enforce government decisions on expenditure priorities and levels. Itis 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. 17. One method of reducing opportunities to soften fiscal discipline found in otherkey sectors like health and education is to adopt a medium-term forward planningprocess linked to medium-term revenue projections. In fact, defense officials arefrequently favorably disposed to medium-term frameworks because procurement ofmilitary equipment and construction of military facilities involve multi-year expenditures.Adopting a medium-term framework makes it harder to avoid fully costing defenseprograms, particularly outlays on arms procurement and major construction projects.Interestingly, a few armed forces in Africa have embraced the MTEF concept in an effortto obtain consistent financing.5.1.3 Sectoral Allocation of Resources Once the overall resource envelope is agreed, resources must be allocatedaccording to priorities both within sectors and among sectors. This process involvespolitical bargaining among a wide range of actors. It must be informed by a set ofsectoral strategies and, wherever possible, information on performance. Once theauthorities responsible for central budget management set the budget envelope fordefence/intelligence/public security, the ministry responsible for managing the relevantsector (defence, interior and so on) should take the lead in developing initial budgetprojections in collaboration with the relevant security services. From an efficiency perspective, it is particularly important to get the allocationright between recurrent and capital budgets. Within recurrent expenditure, it is alsoimportant to strike an appropriate balance between wages and salaries, and betweenoperations and maintenance. Unless this balance is achieved, there may be capitalinvestments that are not properly maintained. Practices such as keeping “ghost”soldiers/police officers on the payroll and channeling security-related personnel coststhrough other ministries complicate this calculation. Moreover, recurrent funds may bespread too thinly. For equipment procurement, it is critical to evaluate up-front the fulllife-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 capacityto analyze security programs, just as they should have the capacity to analyze othersectoral programs. Even where the budget office is confined to ensuring only that thedefence/intelligence/public security budget conforms to the guidelines laid down andthat costings are reasonable, this should be underpinned by a knowledge of the policyissues. Given the weaknesses in the disciplining framework in many developingcountries 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 thepolicy debate. 77
  18. 18. Box 5-2. The Importance of Transparency in Procurement Processes: The Tanzanian AirTraffic Control System PurchaseIn December 2001, a month after Tanzania received some $3 billion in debt relief aimed at improvingthe government’s capacity to support improvements in education, health, water, roads and otherpriority areas, the UK approved the purchase of a $40 million BAE air traffic control system byTanzania. The deal had been under negotiation for several years, but the decision createdconsiderable 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 aircontrol, technical evaluations conducted by the International Civil Aviation Organization (ICAO) at therequest 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 equipmentwould be required to make it functional for civil purposes, and cost four or five times as much as a civilaviation system more suited to Tanzania’s requirements.The World Bank opposed the purchase, expressing concerns about the debt implications of thepurchase. Both the World Bank and the IMF refused to extend credits to enable the Tanzaniangovernment to finance the purchase. This led Tanzania to seek commercial funding from Barclay’sBank. While Barclay’s proposed to lend the money at well below market rates, Tanzania would stillbe paying more for the loan than if the Bank or the Fund had provided credits. The financing dealwas reportedly “deliberately structured to fit just inside the IMFs 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 withoutadequate consultation of the Tanzanian parliament aimed that parliamentarians had only learned thedetails from UK press reports. He also noted that the public expenditure review, which was meant totake in the views of all civil society, never addressed the issue. Civil society groups issued astatement in February 2002 calling for wider participation in future decisions to incur substantial debtfor any purpose.UK Chancellor of the Exchequer, Gordon Brown, and UK Secretary of State for InternationalDevelopment, Clare Short, both argued strenuously within Cabinet against approval of the deal, butwere defeated. The Ministry of Defence had used a provision licence procedure that enabledequipment to be built and partially shipped even before the export license was agreed. Thisessentially forced the Cabinet’s hand. Nonetheless, DFID withheld £10 m in budgetary support inearly 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, promisedClare Short that future public spending decisions would received a higher level of scrutiny. Mkaparesisted efforts to publish the ICAO report, but did begin negotiations with BAE to reduce the price ofthe overall deal. The UK Arms Export Control Bill was amended to include sustainable developmentas one of the criteria for agreeing future export licenses, although critics argue that some loopholesremain that could allow similar deals to be approved.Source: World Bank Development News, “World Bank Could Bar $40 Million Tanzania Air TrafficDeal,” December 21, 2001, www.worldbank.org/developmentnews, search Development NewsArchives under December 21, 2001; Alan Beattie, “IMF should have prevented BAEs Tanzaniadeal,” 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, June14, 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. 19. The challenge role of the budget office not only ensures that decision makersconfront the full range of issues; it also will contribute to raising the quality of proposalsfrom ministries over time. Moves to more output- and outcome-oriented systems willonly place more demands on budget offices to understand the policy issues. Given thelimited policy capacity in many countries, it is of course essential that this policycapacity be effectively allocated across central agencies and between central agenciesand line ministries. The central budget office should ideally consider spendingproposals within a medium-term resource envelope and should seek to ensure tightlinks between policy-making, planning, and budgeting. This enhances the likelihoodthat that budget ceilings and floors will be respected and security outcomes, howeverimplicit, will be achieved. Again, it is important to recognize that in all countries resource allocationdecisions involve very difficult trade-offs between the security and non-security sectorsas well as within the security sector itself. The trade-offs are more difficult in poorercountries. It is therefore important that the executive delivers the final appropriationrequest to the legislature by a date that affords legislators adequate time to evaluateand debate the spending proposal before the beginning of the new fiscal year andbefore a vote on the budget is required. Exact procedures are likely to differ from onepolitical system to another. Additionally, methods of consulting with the public on theproposed trade-offs can strengthen the entire process by contributing to a nationalconsensus on priorities. If a country is placed on a war footing and is forced to transform the economy torespond more effectively to unforeseen security needs, the budget system too must beable to respond – allocations and the pattern of appropriations will need to change toreflect the change in government priorities. The executive should always be able toreact swiftly to major security threats and many constitutions empower the executive totake exceptional action should the need arise. A key issue with respect to themanagement of security expenditure in such instances is the ability of government toavoid emergency regulations that undermine the ability to revert to good practice oncethe 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 theimplementation 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. 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 tonon-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. 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 inthe 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 beparticularly important with regard to defense preparedness, which is akin to outputs.Clear objectives, specification of preparedness, measures of performance supported bymonitoring and evaluation should all be encouraged. Value for money audits by theexternal auditor also help focus attention on efficiency and effectiveness issues, and thedefence/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-orientedbudgeting system is being implemented, defence/intelligence/security should be 81
  22. 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 budgetsystems mirror the good practices described in Chapter 1 in the discussion on reformingthe security sector and in Chapter 4 on managing policy processes. This section brieflyreviews several of the main issues that should be taken into account when seeking tostrengthen 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. 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. 24. CHAPTER 6 MANAGING THE DEFENCE SECTORAIMThe aim of this section is to examine governance issues as they affect defenceforces and reflect on best and bad practice with a view to developing propergovernance guidelines.6.1 ASSESSING NEEDS6.2.1 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-beingof a people and their security cannot be subdivided. Lack of security, the inability toprotect one’s values and valuables, the feeling of vulnerability, the exposure to thewhims 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 – isinseparable from the concept of well-being.26 The well-being of a country and its people is also dependent on foreigninvestment and trade. It is a fact that corporations do not invest where they have noconfidence in the security of their investments. This investor confidence isinfluenced by the perceptions of the long-term stability and security that they have ofindividual countries. Two of the factors influencing this confidence are internal peaceand 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 anenvironment conducive to the security and well-being of its population and to stableeconomic relations with other countries. One is to invest in defence forces. Severalarguments are often raised against the decision to invest in the security sector,including defence forces: 1) the non-existence of immediate physical threats; 2) theexisting conditions of regional and international peace; and 3) the dire need forspending on social and developmental priorities. These are all legitimate concerns,and when resources are allocated to different sectors, the need for security has to beweighed against the need economic and social development. However, even acursory look at events in the Balkans, the Middle East, South Asia, the Horn of Africaand Central Africa demonstrates the objective need for defence forces. The26 See the website of the Commission on Human Security for a broad definition of “human security,”www.humansecurity-chs.org. 84
  25. 25. establishment and development of mission-ready military forces is a long-termmatter. It cannot be accomplished overnight when a conflict situation threatens. Some insurance against uncertaineventualities is required and all responsible Defence planning must be based on astates will, for the foreseeable future, invest “needs driven but cost constrainedin “the defence and protection of the state, approach.its territorial integrity and its people.” Tobalance the conflict between requirementsand resources, the fundamental problem of economics, defence planning musttherefore be based on a “needs driven but cost constrained” approach. The ultimatechallenge 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 manyfactors 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. 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 SECTORThe aim of this section is to examine governance issues as they affect defenceforces and reflect on best and bad practice with a view to developing propergovernance guidelines.6.1 ROLE OF THE MINISTRY OF DEFENCE4.5.2.3 Head of Security Force The chief of police, armed forces or intelligence services generally has acommand or line authority role over the forces that s/he heads up. In the armedforces, for example, the role of the Chief of Defence Staff or the Chief of DefenceForce 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. 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 apeople and their security cannot be separated from each other. Lack of security, theinability to protect one’s values and valuables, the feeling of vulnerability, theexposure 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 againstwant, suffering, environmental degradation Box 6-1. The Security Dimensions ofand the miscarriage of justice and human Well-beingrights – is inseparable from the concept of When poor people around the globe arewell-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. Thepeople is also dependent on investment most frequently cited components ofand trade. It is a fact that corporations do “security” are: civil peace; a physicallynot invest where they have no confidence in safe and secure environment; personalthe security of their investments. Investor physical security; lawfulness and access to justice, security in old age; andconfidence is influenced by perceptions of confidence in the future.the long-term stability and security of a Source: Narayan, Deepa, Robertcountry. Two of the factors influencing this Chambers, Meera Kaul Shah, and Patticonfidence are internal peace and stability Petesch, Voices of the Poor: Crying Outand the capacity of the country to defend for Change, New York, N.Y: Publishedand protect its interests, including an for the World Bank, Oxford University Press, 2000, Chapter 2.environment that is sufficiently stable togain investor confidence. Figure 4-3 shows some of the mechanisms governments can use to create anenvironment conducive to the security and well-being of the state and its populationand to stable economic relations with other countries. One mechanism is to invest indefence forces. Despite the close links between security of the state and itspopulation and personal and societal well-being, arguments are often raised againstinvesting in defence forces. Chief among these are: 1) the lack of immediatephysical threats; 2) the existing conditions of regional and international peace; and 3)the urgent need for spending on social and developmental priorities. These are alllegitimate concerns, and when resources are allocated to different sectors, the needfor security has to be weighed against the need for economic and socialdevelopment.27 See the website of the Commission on Human Security for a broad definition of “human security,”www.humansecurity-chs.org. 87
  28. 28. In making this calculation it is important to understand that the establishmentand development of mission-ready military forces is a long-term matter that cannotbe accomplished overnight when a conflict situation threatens. As events in theBalkans, the Middle East, South Asia, the Horn of Africa and Central Africa duringthe 1990s and early 2000s demonstrates, itcan be hard to predict exactly when defence Defence planning must be based on aforces 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 uncertaineventualities is required and all responsiblestates will, for the foreseeable future, invest in “the defence and protection of thestate, its territorial integrity and its people.” To balance the conflict betweenrequirements and resources, the fundamental problem of economics, defenceplanning 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 bymany 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. 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 thosethreats identified by the security environment assessment as within their purview,governments need to undertake a comprehensive defence review process. Thisreview should elucidate the principles, values, processes, structural ramificationsand resource implications of the defence sector. A comprehensive review willinclude 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 89
  30. 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 beapplied to the security sector. Figure 4-2 outlined a process for conducting securityassessments and developing policy frameworks and operational strategies that couldbe applied in the defence, intelligence and public security sectors. The discussion inthis section will focus on a number of key issues in applying these processes to thedefence sector: 1) management of the defence review process; 2) strategic defenceplanning; 3)6.3.1 Management of the Defence Review Process The management of a defence review process could be the responsibility ofeither the ministry of defence in regular consultation with other role players or thejoint responsibility of the ministry of defence and an appropriate parliamentarycommittee on defence. The latter is suggested as a preferred option given the factthat joint “ownership” of the process by both the executive and the legislature willprovide greater legitimacy and credibility to the review process. It is also thepreferred option from the perspective of underscoring that the defence forces advisethe civil authority in developing policy and strategic plans; they do not control thatprocess. (The allocation of roles and responsibilities between the civil authoritiesand the defence forces are shown in Box 6-2. Appendix 2 discusses the role of theexecutive in developing and implementing policy in the security sector.) It is accordingly essential in the process of drafting the defence review thatapproval for each stage of the drafting process is obtained from the majorstakeholders (the ministry of defence and the appropriate parliamentary committee)and is communicated to all interest groups and public groupings interested in and/oraffected by the process. Briefing of stakeholders can be done on the basis of regular 90
  31. 31. report-backs and approval processes with the ministry of defence and theappropriate 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 theformulation of an appropriate communication strategy and the appointment of aperson/persons to manage this strategy. Regular communication with interestgroups and the public can be accomplished in various ways, including (but notlimited to) convening provincial workshops, convening academic/NGO seminars, andregular media coverage. It will be important for the role players involved in this process to developmutually 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 ofthis process. The methodology in the review process should facilitative andinteractive. 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 assessmentto provide guidance on the likely roles and tasks that the armed forces and otherdefence-related bodies will be expected to execute. Box 6-3 outlines a number ofimportant considerations in this regard. A defence review also requires a definition of the proposed defence posturewhich underpins the extent of ones capabilities. The following factors are importantin determining the size and nature of force required: 91
  32. 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 itwould, 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 92
  33. 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. 93
  34. 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, isfocussed on that part of the economy that involves defence-related issues such as thelevel of national defence spending, the impact of defence spending on the economy, theopportunity cost of defence spending on social welfare and development, the spin-off forthe technology of the country and ultimately the implications of defence spending onnational, regional and international peace and stability. Most of these factors areexternal to the defence department and relate to the relationship between thedepartment and its external environment. Defence economics does, however, alsoaddress the important matter of defence resource management within defencedepartments to ensure the most efficient utilisation of the defence allocation. As theworldwide demand is for decreased defence spending and more spending on social anddevelopmental priorities, the most efficient management of the scarce resourcesavailable for defence becomes increasingly important. The concept of “more bang forthe 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 ofthe fundamental questions to be resolved is that of resource allocation. How much is tobe allocated to defence on the whole, how is this allocation sub-divided amongst theservices and other contenders, how are priorities determined and how is efficiency,transparency and accountability as well as sound public expenditure managementassured?This section discusses the rationale for strategic defence planning to determine themacro (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 toprovide an exact model or pro-forma but rather to determine a conceptual logic, whichcan serve as a generic basis for defence planning, programming and budgeting and assuch for the determination of resource allocation.STRATEGIC DEFENCE PLANNING 94

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