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"Defence Economic Reform IV: Budgets and Expenditure Choices in the Post Cold War" was the theme of the annual joint conference between the NATO Economics Directorate and the George C. Marshall European Center for Security Studies. This year's conference took place in Wildbad Kreuth, Germany, on 15-18 September 2002, and was attended by over 70 experts from 33 NATO and Partner countries, Bosnia-Herzegovina and the Federal Republic of Yugoslavia, many of them working in high-level governmental and academic positions.

The conference examined critical issues related to the economic and financial sustainability of defence expenditures and budgets in the new security environment. The issue of implementing defence economic reform is of paramount concern for all countries in their quest for "value for money" outlays as they contend with difficult budgetary choices and new security requirements arising from the attacks of September 11. The conference therefore provided a forum for representatives from across the Euro-Atlantic region to exchange views and discuss issues at the cutting edge of analysis within national Defence Ministries - issues related to the better use of limited economic resources in meeting the increasingly complex requirements of defence and security planning.

After the welcoming remarks made by Dr. Patrick Hardouin, Director, NATO Economics Directorate and Col. Franz-Xaver Lauterer, Director of the Marshall Center's Conference Centre, presentations were given on the following subjects:

  • Military expenditure priorities and the existence of a post-Cold War "peace dividend";
  • Trends, projections and output from national defence budgets;
  • The present and future costs of weapon systems;
  • The contribution of military R&D spending to future defence capabilities;
  • Political and parliamentary control of defence expenditure;
  • Measuring the economic costs of terrorism
  • Evaluating the financial and economic consequences of the US anti-terrorism campaign;
  • Cost-effective decision-making concerning professional or conscript armed forces;
  • The reform of military pay and benefits;
  • Budgetary problems for transitional economies;
  • The financing of demobilisation and reintegration in Partner countries.