At a time of increasing regional tensions, several states have taken extraordinary steps to increase funding for their militaries, bypassing regular budgeting procedures. For example, shortly after Russia’s full-scale invasion of Ukraine in 2022 Germany created an extra-budgetary fund, or Sondervermögen, worth €100 billion (US$112 billion) for military procurement. Around the same time, Poland created an off-budget mechanism that accounted for a third of its military spending in 2023, the Armed Forces Support Fund (FWSZ). Other European states, such as Estonia and Lithuania, have also taken similar steps. Meanwhile, amid deteriorating relations with China, Taiwan has created two extra-budgetary funds for military procurement since 2021.
While they allow governments to react quickly and flexibly to changing threat perceptions, extra-budgetary and off-budget mechanisms (EBOBMs) can also come at a cost to transparency and democratic oversight. With military spending rising around the world, the role of national parliaments in approving military budgets and scrutinizing expenditures should be protected. Parliaments are key to ensuring that military spending decisions remain aligned with the principles of good security sector governance—that is, they are made in a manner that is accountable, effective and inclusive—and with the wider interests of society.
The impacts of rising military expenditure are being discussed in the United Nations disarmament bodies, like the First Committee and the Conference on Disarmament, and at the General Assembly of the Inter-Parliamentary Union (IPU). Several UN reports have highlighted the potential negative effects of surging military expenditure. In the past couple of years, however, the focus has moved beyond discussion of spending levels per se to national-level governance issues. In 2023 the Advisory Board on Disarmament Matters argued that institutionalized checks and balances, including better oversight by legislative bodies, and a whole-of-society approach could help to minimize waste and misuse of funds as well as reducing the risk of corruption in military spending. In 2025 the UN Secretary-General called on member states to ‘promote transparency and accountability around military expenditure to build trust and confidence … and increase domestic fiscal accountability’, in his report The Security We Need: Rebalancing Military Spending for a Sustainable and Peaceful Future.
But whatever concerns or recommendations emerge from the First Committee and other multilateral forums regarding military spending levels and governance, they will require action by national parliaments. At a time when military spending is rising and new military funding structures are complicating parliamentary oversight, coordination between the UN disarmament machinery and parliaments can no longer be neglected.
Extra-budgetary and off-budget mechanisms and the erosion of parliamentary control
EBOBMs are structures for military spending that are outside the ministry of defence’s allocation in the state budget. They can draw on other lines within the state budget (extra-budgetary) or from loans, bonds or special taxes (off-budget). Some may have clear expiry dates or spending limits, while others are open-ended. Rules governing how the resources are spent, how spending decisions are made, and accountability and transparency provisions can vary widely.
Because EBOBMs are often created in response to urgent needs, there may be pressure to waive the regular bureaucratic and legislative processes. As a result, they may be adopted with minimal parliamentary scrutiny and debate—concerning both the mechanisms themselves and any broader implications. For example, the Sondervermögen breached Germany’s long-standing government debt ceiling. And experience from around the world indicates that once EBOBMs have been introduced, it can take years and even decades for governments to stop using them.
The different rules and procedures governing EBOBMs and the fact that they are often debated separately from the regular defence ministry budget can greatly complicate oversight of military spending as a whole.
From a security sector governance perspective, EBOBMs raise questions not only about how much states spend on the military, but about how decisions on military expenditure are made, implemented and scrutinized. Parliaments are integral to the security sector governance architecture, alongside executive authorities, defence institutions, supreme audit institutions and other independent oversight bodies. Furthermore, involving parliaments is the only way in a democracy to assure buy-in and legitimacy for costly increases in military spending, especially when they affect other state budget expenditures.
EBOBMs are the clearest expression of the special status military spending often enjoys. Even when they are designed in a way that gives parliaments a degree of involvement, EBOBMs by their nature bypass the normal safeguards governing military expenditure. In particular, they remove the need for ex ante approval, scrutiny and audit of military spending decisions.
Possible measures to safeguard parliamentary control over military budgets
There are several ways in which parliaments could reassert their role in overseeing military spending. For example, they can maintain strong parliamentary defence committees, or collaborate closely with supreme audit institutions (SAIs), which independently audit the use of public funds. The effectiveness of these measures, however, depends on having access to relevant information (including classified material), sufficient expertise, and formal requirements for executive reporting and response.
One underexplored legal instrument for parliaments to exert political control over military budgets, especially over EBOBMs, is the International Covenant on Economic, Social and Cultural Rights (ICESCR), which as of 2026 has been ratified by 173 of the 193 UN member states.
The ICESCR can provide an additional reference point for parliamentary scrutiny of EBOBMs. Under General Comment No. 3, deliberately retrogressive measures affecting economic, social and cultural rights require careful consideration and justification in light of the state’s maximum available resources. While this would not in itself limit increases in military expenditure or the use of EBOBMs, it could be used to support requests for evidence on their fiscal and distributional consequences, including possible effects on expenditure relevant to economic and social rights.
The 2016 statement on Public Debt, Austerity Measures and the ICESCR of the UN Committee on Economic, Social and Cultural Rights offers tools that, although initially meant for situations of fiscal consolidation and sovereign debt crisis, could inform bodies tasked with scrutinizing EBOBMs that constrain public resources or bypass ordinary budget procedures.
An important caveat is that the use of the ICESCR depends on how the treaty was internalized by each country. In some legal systems, ratified international treaties automatically become domestic law, whereas in others specific implementing legislation is required. However, even in countries where the ICESCR is not yet domestic law, the fact of ratification already provides an important rhetorical instrument to support the principle of non-retrogression and to argue for human rights impact assessments.
Another avenue for strengthening transparency and oversight over off- and extra-budget military spending involves sharing best practices and lessons learned among parliamentarians and parliamentary staff. The IPU could be a critical player in this regard, not only as a forum to exchange views but also for diffusing knowledge.
Finally, closer engagement is needed between parliaments and the UN. The UN could facilitate parliamentarians’ participation in disarmament and arms control forums through structured consultations, observer arrangements where appropriate, and dedicated parliamentary sessions held alongside relevant UN meetings. More broadly, UN-parliamentary engagement on military spending matters could be supported through partnerships with organizations such as the IPU, which has permanent observer status at the General Assembly. Moreover, the IPU could also be brought into ongoing and future Advisory Board on Disarmament Matters processes that touch on military expenditures.
Side events at high-level disarmament conferences could also be organized for parliamentarians, exploring how parliaments can push for more efficient, effective and transparent military spending. In this vein, collaborating with like-minded states to support discussions at the UN could be an avenue to further parliamentary involvement in disarmament discussions.
Another possibility is for the UN to develop consistent language encouraging member states to establish or strengthen the legal, regulatory and administrative arrangements needed for effective oversight of military expenditure. Where parliaments exercise budgetary authority, this should include granting them adequate powers to scrutinize, approve and monitor defence spending, including exceptional financing mechanisms. Such arrangements could help to ensure that development-related expenditure is considered transparently alongside military priorities and is not disadvantaged by opaque or preferential budgetary mechanisms.
This suggestion follows well-established language in other domains of arms control and disarmament. For example, the UN Programme of Action on Small Arms and Light Weapons calls on states to put in place ‘adequate laws, regulations and administrative procedures’ to exercise effective control over arms-related activities. Adapting an existing formulation like this to the context of oversight of military expenditures may be less politically contentious or difficult compared to new language or frameworks.
The dissemination of standardized language on the role of parliaments overseeing military expenditures would serve as a focal point for parliaments, diplomatic representations at the UN and the UN disarmament bodies to converge around. Often, conflicting views and approaches to military expenditure within the UN—pushing for international transparency versus pushing for reductions, for example—have hindered the development of a more constructive and practical conversation.
The way ahead
Responses to ongoing changes in the international security landscape are challenging parliaments. As threat perceptions heighten, there is pressure to sacrifice democratic principles for the sake of security. Yet if anything, democratic oversight should be strengthened under these conditions. Parliaments have a critical role to play in making sure military spending is effective, efficient and transparent, and in line with society’s best interests.
Article 26 of the UN Charter calls for ‘the establishment and maintenance of international peace and security with the least diversion for armaments of the world’s human and economic resources’. This should guide closer engagement between the UN and parliaments. The UN is increasingly recognizing that discussions about ‘excessive military expenditure’ that do not include national parliaments or fiscal institutions are futile. Parliaments approve and scrutinize military budgets, and their ability to do this effectively is not only a matter of good governance but also a condition for more international transparency, confidence and stability.
The increasing reliance on EBOBMs is one way in which two very concerning trends—the weakening of democratic controls and rising insecurity—can be mutually reinforcing. Strengthening the role of parliaments in overseeing military budgets can be an entry point to control this potentially dangerous interaction. If military expenditures are to keep rising, parliamentary oversight must keep pace.
This essay forms part of a research collaboration between the Stockholm International Peace Research Institute (SIPRI) and the Geneva Centre for Security Sector Governance (DCAF) that seeks to identify and share good practices for strengthening transparency, accountability and parliamentary scrutiny of military budgets. These themes will also inform discussions at the side event ‘Rising Military Expenditures: Alternatives to Achieve Durable Security’, which will take place during the UN General Assembly High-Level Week on 24 September 2026, with participation from both organizations, UN member states, the UN Office for Disarmament Affairs and the Inter-Parliamentary Union.
ABOUT THE AUTHOR(S)
Dr Diego Lopes da Silva is a Senior Researcher in the SIPRI Military Expenditure and Arms Production Programme.
Dr Hans Born is Head of Research and Training at the Geneva Centre for Security Sector Governance (DCAF).
Dr Dawn Lui is a Programme Manager at the Geneva Centre for Security Sector Governance (DCAF).
At a time of increasing regional tensions, several states have taken extraordinary steps to increase funding for their militaries, bypassing regular budgeting procedures. For example, shortly after Russia’s full-scale invasion of Ukraine in 2022 Germany created an extra-budgetary fund, or Sondervermögen, worth €100 billion (US$112 billion) for military procurement. Around the same time, Poland created an off-budget mechanism that accounted for a third of its military spending in 2023, the Armed Forces Support Fund (FWSZ). Other European states, such as Estonia and Lithuania, have also taken similar steps. Meanwhile, amid deteriorating relations with China, Taiwan has created two extra-budgetary funds for military procurement since 2021.
While they allow governments to react quickly and flexibly to changing threat perceptions, extra-budgetary and off-budget mechanisms (EBOBMs) can also come at a cost to transparency and democratic oversight. With military spending rising around the world, the role of national parliaments in approving military budgets and scrutinizing expenditures should be protected. Parliaments are key to ensuring that military spending decisions remain aligned with the principles of good security sector governance—that is, they are made in a manner that is accountable, effective and inclusive—and with the wider interests of society.
The impacts of rising military expenditure are being discussed in the United Nations disarmament bodies, like the First Committee and the Conference on Disarmament, and at the General Assembly of the Inter-Parliamentary Union (IPU). Several UN reports have highlighted the potential negative effects of surging military expenditure. In the past couple of years, however, the focus has moved beyond discussion of spending levels per se to national-level governance issues. In 2023 the Advisory Board on Disarmament Matters argued that institutionalized checks and balances, including better oversight by legislative bodies, and a whole-of-society approach could help to minimize waste and misuse of funds as well as reducing the risk of corruption in military spending. In 2025 the UN Secretary-General called on member states to ‘promote transparency and accountability around military expenditure to build trust and confidence … and increase domestic fiscal accountability’, in his report The Security We Need: Rebalancing Military Spending for a Sustainable and Peaceful Future.
But whatever concerns or recommendations emerge from the First Committee and other multilateral forums regarding military spending levels and governance, they will require action by national parliaments. At a time when military spending is rising and new military funding structures are complicating parliamentary oversight, coordination between the UN disarmament machinery and parliaments can no longer be neglected.
Extra-budgetary and off-budget mechanisms and the erosion of parliamentary control
EBOBMs are structures for military spending that are outside the ministry of defence’s allocation in the state budget. They can draw on other lines within the state budget (extra-budgetary) or from loans, bonds or special taxes (off-budget). Some may have clear expiry dates or spending limits, while others are open-ended. Rules governing how the resources are spent, how spending decisions are made, and accountability and transparency provisions can vary widely.
Because EBOBMs are often created in response to urgent needs, there may be pressure to waive the regular bureaucratic and legislative processes. As a result, they may be adopted with minimal parliamentary scrutiny and debate—concerning both the mechanisms themselves and any broader implications. For example, the Sondervermögen breached Germany’s long-standing government debt ceiling. And experience from around the world indicates that once EBOBMs have been introduced, it can take years and even decades for governments to stop using them.
The different rules and procedures governing EBOBMs and the fact that they are often debated separately from the regular defence ministry budget can greatly complicate oversight of military spending as a whole.
From a security sector governance perspective, EBOBMs raise questions not only about how much states spend on the military, but about how decisions on military expenditure are made, implemented and scrutinized. Parliaments are integral to the security sector governance architecture, alongside executive authorities, defence institutions, supreme audit institutions and other independent oversight bodies. Furthermore, involving parliaments is the only way in a democracy to assure buy-in and legitimacy for costly increases in military spending, especially when they affect other state budget expenditures.
EBOBMs are the clearest expression of the special status military spending often enjoys. Even when they are designed in a way that gives parliaments a degree of involvement, EBOBMs by their nature bypass the normal safeguards governing military expenditure. In particular, they remove the need for ex ante approval, scrutiny and audit of military spending decisions.
Possible measures to safeguard parliamentary control over military budgets
There are several ways in which parliaments could reassert their role in overseeing military spending. For example, they can maintain strong parliamentary defence committees, or collaborate closely with supreme audit institutions (SAIs), which independently audit the use of public funds. The effectiveness of these measures, however, depends on having access to relevant information (including classified material), sufficient expertise, and formal requirements for executive reporting and response.
One underexplored legal instrument for parliaments to exert political control over military budgets, especially over EBOBMs, is the International Covenant on Economic, Social and Cultural Rights (ICESCR), which as of 2026 has been ratified by 173 of the 193 UN member states.
The ICESCR can provide an additional reference point for parliamentary scrutiny of EBOBMs. Under General Comment No. 3, deliberately retrogressive measures affecting economic, social and cultural rights require careful consideration and justification in light of the state’s maximum available resources. While this would not in itself limit increases in military expenditure or the use of EBOBMs, it could be used to support requests for evidence on their fiscal and distributional consequences, including possible effects on expenditure relevant to economic and social rights.
The 2016 statement on Public Debt, Austerity Measures and the ICESCR of the UN Committee on Economic, Social and Cultural Rights offers tools that, although initially meant for situations of fiscal consolidation and sovereign debt crisis, could inform bodies tasked with scrutinizing EBOBMs that constrain public resources or bypass ordinary budget procedures.
An important caveat is that the use of the ICESCR depends on how the treaty was internalized by each country. In some legal systems, ratified international treaties automatically become domestic law, whereas in others specific implementing legislation is required. However, even in countries where the ICESCR is not yet domestic law, the fact of ratification already provides an important rhetorical instrument to support the principle of non-retrogression and to argue for human rights impact assessments.
Another avenue for strengthening transparency and oversight over off- and extra-budget military spending involves sharing best practices and lessons learned among parliamentarians and parliamentary staff. The IPU could be a critical player in this regard, not only as a forum to exchange views but also for diffusing knowledge.
Finally, closer engagement is needed between parliaments and the UN. The UN could facilitate parliamentarians’ participation in disarmament and arms control forums through structured consultations, observer arrangements where appropriate, and dedicated parliamentary sessions held alongside relevant UN meetings. More broadly, UN-parliamentary engagement on military spending matters could be supported through partnerships with organizations such as the IPU, which has permanent observer status at the General Assembly. Moreover, the IPU could also be brought into ongoing and future Advisory Board on Disarmament Matters processes that touch on military expenditures.
Side events at high-level disarmament conferences could also be organized for parliamentarians, exploring how parliaments can push for more efficient, effective and transparent military spending. In this vein, collaborating with like-minded states to support discussions at the UN could be an avenue to further parliamentary involvement in disarmament discussions.
Another possibility is for the UN to develop consistent language encouraging member states to establish or strengthen the legal, regulatory and administrative arrangements needed for effective oversight of military expenditure. Where parliaments exercise budgetary authority, this should include granting them adequate powers to scrutinize, approve and monitor defence spending, including exceptional financing mechanisms. Such arrangements could help to ensure that development-related expenditure is considered transparently alongside military priorities and is not disadvantaged by opaque or preferential budgetary mechanisms.
This suggestion follows well-established language in other domains of arms control and disarmament. For example, the UN Programme of Action on Small Arms and Light Weapons calls on states to put in place ‘adequate laws, regulations and administrative procedures’ to exercise effective control over arms-related activities. Adapting an existing formulation like this to the context of oversight of military expenditures may be less politically contentious or difficult compared to new language or frameworks.
The dissemination of standardized language on the role of parliaments overseeing military expenditures would serve as a focal point for parliaments, diplomatic representations at the UN and the UN disarmament bodies to converge around. Often, conflicting views and approaches to military expenditure within the UN—pushing for international transparency versus pushing for reductions, for example—have hindered the development of a more constructive and practical conversation.
The way ahead
Responses to ongoing changes in the international security landscape are challenging parliaments. As threat perceptions heighten, there is pressure to sacrifice democratic principles for the sake of security. Yet if anything, democratic oversight should be strengthened under these conditions. Parliaments have a critical role to play in making sure military spending is effective, efficient and transparent, and in line with society’s best interests.
Article 26 of the UN Charter calls for ‘the establishment and maintenance of international peace and security with the least diversion for armaments of the world’s human and economic resources’. This should guide closer engagement between the UN and parliaments. The UN is increasingly recognizing that discussions about ‘excessive military expenditure’ that do not include national parliaments or fiscal institutions are futile. Parliaments approve and scrutinize military budgets, and their ability to do this effectively is not only a matter of good governance but also a condition for more international transparency, confidence and stability.
The increasing reliance on EBOBMs is one way in which two very concerning trends—the weakening of democratic controls and rising insecurity—can be mutually reinforcing. Strengthening the role of parliaments in overseeing military budgets can be an entry point to control this potentially dangerous interaction. If military expenditures are to keep rising, parliamentary oversight must keep pace.
This essay forms part of a research collaboration between the Stockholm International Peace Research Institute (SIPRI) and the Geneva Centre for Security Sector Governance (DCAF) that seeks to identify and share good practices for strengthening transparency, accountability and parliamentary scrutiny of military budgets. These themes will also inform discussions at the side event ‘Rising Military Expenditures: Alternatives to Achieve Durable Security’, which will take place during the UN General Assembly High-Level Week on 24 September 2026, with participation from both organizations, UN member states, the UN Office for Disarmament Affairs and the Inter-Parliamentary Union.
ABOUT THE AUTHOR(S)