PFM Articles 
Valuing Defense
RON SMITH
PFM, Vol. 7 No. 3,
(2007)
This paper examines three questions in the valuation of defense in the UK. First, how to calculate the value of defense to society? in order to determine the appropriate budget. Second, how to ensure value of money in defense procurement? Third, how to value defense assets? as required under the new Resource Accounting and Budgeting system for controlling public finance. A central theme of this paper is that while budgets and forces can be measured and military capabilities can be estimated, the final security outputs are inherently intangible. It is this intangibility that makes the valuation of defense so difficult in all three areas.
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