Publication Details
Abstract
In a contemporary geo-political landscape, the effective operation of the defence sector is directly dependant upon the status of social and economic support to military personnel. Such support is financed through state budget as a system of material incentives. The rational and efficient use of budget funds allocated for military compensation is important activity in terms of increasing service motivation, ensuring personnel stability, as well as keeping and strengthening national defense capacity. This study analyzes the economic and institutional mechanisms for effective use of budget funds in terms of military personnel material incentives system. The paper uses instrumental, systemic and economic-statistical analysis methods to study the interdependence of quantitative and qualitative state budget allocation mechanisms in specific types military service incentives. Results: The study demonstrates that the efficiency of budget fund utilization in the military sphere is conditioned by performance-oriented budgeting, individualized incentive mechanisms, rigorous internal financial control and access to relevant information necessary for transparency in the process of resource allocation. The results also reveal that caution must be exercised when linking material stimulation to service performance, professional qualifications, service conditions and collective results; only in this case does the stimulating impact of financial support considerably increase. According to the results of the study, building a more effective material incentives system for military personnel is only possible if new elements connected with public finance management through digital monitoring systems and the establishment of transparent and results-oriented budgeting mechanisms are implemented. These measures also play a role in the rational allocation of budget funds and strengthen the efficiency and sustainability of military personnel.