Abstract
The four-fold aim of this study was to: (1) determine how the New Zealand Army (NZ Army) compares with Five Eyes armies from a technical efficiency perspective, (2) identify changes in military efficiency through time, (3) identify sources of technical inefficiency in the NZ Army, and (4) develop recommendations to enhance the NZ Army’s technical efficiency in delivering against its military preparedness output.
The problem situation for the NZ Army is characterised by approximately two decades of continuous operational deployments with no deliberate reconstitution, ongoing Government budget cuts and the second-order effects of COVID-19. The lack of a top-down coordinated framework has led to army units training and operating in siloed environments, thereby degrading the NZ Army’s ability to efficiently use scarce military resources and effectively meet directed outputs.
This study is quantitative in nature, with two common production frontiers being constructed (subsequently referred to as Model A and Model B). The first data envelopment analysis (DEA) frontier benchmarks the NZ Army’s efficiency against the relative efficiencies of its Five Eyes partners to determine how it compares with its counterparts from a technical efficiency perspective and to identify general trends in changes in military efficiency through time. The second DEA frontier assesses the relative efficiencies of NZ Army units to identify sources of technical inefficiency across 1 NZ Brigade and to determine how the organisation can become more technically efficient in delivering against its military preparedness output.
The DEA Model A results reveal that the NZ Army generally outperformed non-NZ Five Eyes militaries from a military preparedness perspective, with the exception of the 2020-21 to 2021-22 financial year period. Malmquist indices show that technical efficiency change was the dominant driver of total factor productivity (TFP) change in non-NZ Five Eyes armies over the 2011-12 through 2021-22 financial year period, indicating that on average non-NZ Five Eyes armies were making better use of available technology and more efficiently managing their inputs than the NZ Army. On balance, the British Army was identified as the best practice decision making unit (DMU) for DEA Model A. The greatest variability in efficiency scores occurred during the 2019-20 to 2020-21 financial year period, when the main impact of COVID-19 was reflected in financial statements.
The DEA Model B results demonstrate that NZ Army combat and combat support units performed substantially better than combat service support units from a military preparedness perspective over the period of the study. Further, the efficiency of NZ Army units generally improved over the study period. On average, and across all NZ Army units, technological change was the dominant driver of TFP change over the 2019-20 through 2021-22 financial year period, indicating an increase in technological advances in the defence industry.