Defence Output Measures: An Economics Perspective

摘要

This Contract Report examines the measurement of defence output from an economics perspective. Economic theory offers some policy guidelines for determining the optimal defence output for any society. As an optimising problem, the economics rule is to aim at the socially desirable or optimal defence output which is achieved by equating additional or marginal costs with additional or marginal benefits. While the economics approach is difficult to 'operationalise' into a set of clear unambiguous policy guidelines, it does provide a framework for designing valuations for defence outputs and activities. Experience of measuring defence outputs is reported for the UK, Australia, New Zealand, a group of European nations and the USA.