Decentralized Defense: How Ukraine’s Lean Military Outperforms Expectations

Participants practice flying a drone, in this case to locate colleagues who were hiding and pretending to be enemy snipers, during a combat training day hosted by a local paramilitary civil formation called TSEL, in Lviv region, Ukraine, on Feb. 22, 2023. Sean Gallup/Getty Images

Commentary

National security is the textbook case of a subsidized public good—taxpayer-funded, centrally coordinated, and traditionally insulated from market prices. Ukraine’s wartime economy, however, offers a powerful counterpoint: a state-dominated sector that uses market-like incentives and achieves faster, cheaper, and higher-quality results. Western governments are rushing into a new age of rearmament—so if public funds must be spent, the most critical question is how to spend wisely.