Journal of Policy Modeling 33 (2011) 407–425 Available online at www.sciencedirect.com Innovating in defence policy through spending efficiency: The Life Cycle Costing model Andrés Navarro-Galera a,∗ , Rodrigo I. Ortúzar Maturana b a Facultad de Ciencias Económicas y Empresariales, Universidad de Granada, Campus Cartuja, s/n, 18071 Granada, Spain b Armada de Chile, C/General del Canto, 398, Playa Ancha, Valparaíso, Chile Received 12 November 2010; received in revised form 16 February 2011; accepted 3 March 2011 Available online 23 March 2011 Abstract Research has shown that defence spending has repercussions on government policies and economic growth. At an international scale these implications, together with current financial difficulties affecting governments, justify the timeliness and interest of studying defence policies from the standpoint of efficiency. Many authors and international bodies such as NATO consider Life Cycle Costing (LCC) the best model for improving the efficiency of military investments. This paper examines the political repercussions in different countries of introducing the LCC model. The research methodology is based on a questionnaire that was replied to by the defence departments of 28 countries, classified as developing or developed. © 2011 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved. JEL classification: F52; G18; H43; H56 Keywords: Life Cycle Costing model; Defence policy; Defence spending; Expenditure; NATO 1. Introduction National security expenditure is currently a highly specific and significant item in governmental policies. According to SIPRI (2009), during 2008 total world expenditure on national defence amounted to 1338.53 billion dollars, with the USA and the UK accounting for 40.98% and 4.29%, respectively, of this amount. Sipple, White, and Greiner (2004) and GAO (2006) analyzed the rapid growth in national defence spending, and concluded that in most cases the real cost greatly exceeds budget estimates. ∗ Corresponding author. Tel.: +34 958 242343; fax: +34 958 246249. E-mail addresses: angalera@ugr.es (A. Navarro-Galera), rortuzar@Armada.Cl (R.I. Ortúzar Maturana). 0161-8938/$ – see front matter © 2011 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved. doi:10.1016/j.jpolmod.2011.03.004