So when governments want to evaluate whether sizeable investments in national security are worthwhile, the interest rate at which future benefits are discounted should be low, the authors argue. The lower the discount rate, the bigger the present value of the benefits.
National security investments intended to mitigate certain threats can offer protection against a variety of related risks, the study contends. Investments that prepare countries for major warfare, for example, can avert smaller conflicts, protect external supplies of critical resources such as oil, and preserve the sovereignty of important trading partners.
On the other hand, the authors argue that “peace dividends,” which benefit countries that avoid conflict, can lead to reduced national security investments, which can, in turn, leave countries more vulnerable to other dangers.