COMPARATIVE ANALYSIS OF FINANCIAL SUPPORT MODELS IN THE FORMER SOVIET AND NATO ARMED FORCES: LESSONS FOR UZBEKISTAN'S DEFENCE REFORMS

Abstract

This article provides a comparative-analytical examination of the financial support models for military personnel in the Former Soviet Union (characterized by centralized, in-kind provision) and NATO armed forces (based on professionalism and differential pay) [1]. The analysis focuses on key aspects such as budget transparency, the incentive system, and social guarantees, thoroughly investigating NATO's accountability and merit-based payment structures. The Soviet system prioritized the economic stability of service members through non-monetary, in-kind social guarantees (e.g., free housing, medical services), which, despite ensuring basic needs were met, often resulted in low monetary motivation for skill development due to a lack of differentiation in pay for specific skills or operational risks. Conversely, the NATO model, adapted to the requirements of a professional army, emphasizes high budget transparency and differential monetary compensation, which includes an "X Factor" for the inconveniences of military life and Hostile Fire/Imminent Danger Pay (HFP/IDP) for operational risk. Furthermore, NATO countries utilize sophisticated strategic financial management processes like Planning, Programming, Budgeting, and Execution (PPBE) and regular independent audits to ensure high accountability and alignment of budget resources with military strategy [3], [8]. The insights derived from this study are designed to formulate practical recommendations aimed at modernizing and enhancing the social protection of the Armed Forces of the Republic of Uzbekistan [4], proposing a Hybrid Model that integrates the best features of both systems: maintaining Soviet-era social stability while adopting NATO's transparency and performance-based monetary incentives. The ultimate goal is to optimize defence economics and stabilize the highly-skilled personnel flow.