JORDAN BECKER is a U.S. Army officer and a member of NATO’s International Military Staff. His work here represents his own views and not those of the U.S. government or NATO.

“Burden-sharing” has been an issue for NATO since its birth. Allies have continually found it challenging to deter adversaries without inviting free-riding, and the United States has, at various junctures, “hectored” allies – with mixed results at best. At the 2014 Wales Summit, Allies pledged to halt declines in defense spending and to “aim to move towards” spending 2 percent of GDP on defense “within a decade,” and 20 percent of defense budgets on equipment modernization. In 2017, Allies agreed to develop “national plans” that “set out how Allies intend to meet their pledge.” How likely is it that the Wales Pledge will have its desired effect? What factors drive allies’ burden-sharing behavior?

What is burden-sharing?

The definition of burden-sharing differs surprisingly widely among scholars. There is general agreement that the central question is how to share the costs of the provision of public or collective goods. Cimbala and Forster, working specifically on NATO burden-sharing, defined it as “the distribution of costs and risks among members of a group in the process of accomplishing a common goal.”

In terms of collective security and particularly collective defense NATO and the EU have come to understand burden-sharing as the extent to which individual members mobilize national resources toward shared priorities. In practice, this has meant defense spending. NATO refers to its publicly available “information on defence expenditures” as “a consistent basis of comparison of the defence effort of Alliance members based on a common definition of defence expenditure.” The European Council has likewise stressed “the need to do more, including by committing sufficient additional resources… in accordance with NATO guidelines on defence expenditure.”

Such a “consistent basis of comparison” is one good reason that alternative measures of burden-sharing, such as refugee assistance and foreign aid are likely to be problematic for scholars looking to identify clear, generalizable behavioral tendencies across a number of countries. But the insight that burden-sharing research must somehow operationalize “form of contribution” remains an important one – how can researchers do so without losing the “consistent basis of comparison” offered by quantitative defense spending data provided by NATO and the European Union?

Fortunately, both organizations provide a rough-and-ready opportunity to do so, by disaggregating defense spending data into its constituent parts: personnel, equipment, other (which critically is primarily comprised of Operating and Maintenance – O&M – spending), and infrastructure. Eddy Malesky and I demonstrated the utility of the use of O&M spending as a suitable proxy for operational burden sharing during NATO’s “out of area” period.

The NATO Defence Planning Process (NDPP) and the EU’s Capability Development Plan (CDP) both aim to coordinate capability planning – in other words the conversion of defense spending into intermediate defense “outputs” that countries agree are priorities. I’ve also identified a strong relationship between the NATO “input metrics” (overall and equipment spending) and future “output metrics” – namely deployability and sustainability.

Why does it matter strategically?

The evergreen burden-sharing debate has its roots in traditional collective action theory – because of the size and global interests of the United States, theorists contend, NATO is subject to a “free-rider problem, whereby an ally relies on the defense provision of others to underwrite its own security.” There are, however, idiosyncratic aspects of the transatlantic burden-sharing issue. First, allies rarely engage in blatant “free-riding” but instead engage in “burden shifting,” or “maneuvering for advantage, in the sense of burdens avoided by shifting them to someone else.”

Second, while NATO may have experienced “critical junctures” resulting in significant strategic and organizational change, efforts at collective action to address burden-sharing problems have taken place in the absence of major negative strategic shocks. The distribution of material resources in NATO’s neighborhood has only undergone one major shock, which was the dissolution of the Soviet Union, and that was a “positive” shock in terms of the relative position of allies. Even major economic shocks, such as the multi-pronged financial and economic crises that have affected Europe and the United States since 2008, have not resulted in a redistribution of material resources among allies sufficient to alter the collective action logic underlying the debate.

The policy debate is in essence, then, about two key strategic questions: first, how will the Transatlantic Security Community distribute the costs of providing deterrent and defensive capabilities to protect itself from potential state rivals? Second, how will it distribute the costs of ongoing efforts to project stability in order to forestall risks associated with threatening non-state actors? The first question has been at the heart of the transatlantic bargain since it was first struck (formally in 1949). It is about preparing for a potentiality – the associated probabilities have been the subject of frequent and intense debate, and success is hard to measure. The second has arisen with transnational terrorism and has taken on particular importance since 2001. It has required ongoing operational activities by allies which can, themselves, be measured with somewhat more precision.

The Scholarship/Policy Gap

After grappling with these difficult strategic collective action questions for 65 years, NATO heads of state and government agreed, for the first time at that senior-most level, to a pledge on defense investment at their 2014 Wales Summit. The Wales Pledge aims at addressing NATO’s burden-sharing question by committing each Ally (or at least each of the 25 Allies who at the time spent less than two percent of GDP) to, in the next ten years, spend more on defense, and to dedicate more of that defense spending to equipment modernization. In other words, the policy debate about burden sharing is about affecting the behavior of individual states.

Scholars seeking to provide relevant analysis to this policy debate, then, should seek to identify sources of variation on the dependent variables (aggregate and disaggregated defense spending) not only across countries but especially within countries over time. Unfortunately, much of the transatlantic burden-sharing scholarship, both qualitative and quantitative, focuses on variations across countries. Theories linking burden-sharing behavior to national wealth, threat, and even other allies’ spending choices suffers from this difficulty. While scholars have sought to qualitatively disaggregate “forms of contribution,” their work has not yet produced results that are generalizable across more than a handful of states. Quantitative scholars, with few exceptions, have not disaggregated defense spending for meaningful burden-sharing analysis.

I seek to bridge this gap between scholarly and policy debates in three main ways. First, I seek to combine constructivist and positivist theorizing on defense behavior in order to examine the relationship between national strategic culture and burden-sharing behavior. Eddy Malesky and I have found that, during NATO’s “out of area” period, countries with more “Atlanticist” strategic cultures allocated a greater share of their defense resources to Alliance priorities than did those exhibiting “Europeanist” strategic cultures.

Second, I seek to identify the sources of burden-sharing behavior at the level of national political economies. I do so by assessing the effect of unemployment on aggregate and disaggregated defense spending. I find that resource-constrained governments use personnel expenditures within defense budgets to address unemployment, even as they shift resources out of overall defense budgets.

Finally, I assess the inter-organizational political economy component of the burden-sharing discussion. In particular, I focus on the potential conflict between EU fiscal rules and efforts by both NATO and the EU to encourage more and better defense investment. The European Council, for example, caveated its admonishment to “do more, including by committing sufficient additional resources… in accordance with NATO guidelines” with the phrase “while taking into account national circumstances and legal commitments” – a clear reference to the “Maastricht Criteria” limiting EU Member State deficit levels to 3% of GDP and debt levels to 60% of GDP. I find that, among EU Member States, enhancing fiscal rules has implications not only on overall defense spending, but on the composition of defense budgets. These effects run counter to the spending behavior that both organizations seek. As states transmit EU-level fiscal rules into domestic fiscal policy, they spend less on defense. At the same time, they shift resources within defense budgets to personnel, and away from equipment, operations, and infrastructure.

Together, these findings indicate that transatlantic burden-sharing, and indeed the capabilities that underwrite transatlantic security and defense more broadly, are deeply connected to the political and economic future of the European Union. The variables I’ve identified as having an effect on burden-sharing behavior (Atlanticism, unemployment, and fiscal rules) are all, to some degree, amenable to policy choices.

Burden-Sharing, Transatlantic Security, and the Future of Europe

Atlanticism, or a preference for a transatlantic approach to European security in which the United States’ role is central, is stable, but not static over time. Decisions made in both Washington and in European capitals can affect the extent to which states exhibit it. The finding that Atlanticism is conducive to spending more on Alliance priorities suggests that carefully tending to the transatlantic relationship is likely to result in a more cohesive, coherent, and capable Alliance.

Political and economic decisions are also likely to affect transatlantic burden-sharing – European capabilities depend on robust European economies. Europe’s economic fate is tied to its political fate. If political fragmentation and economic fragmentation accompany one another, European states are likely to allocate less resources to defense, and to spend those resources less efficiently. If NATO and the EU are unable to have frank discussions about reconciling competing demands on members, no one is likely to be satisfied. Security scholars and strategists should therefore keep a close eye on developments not just in Brussels, but – among others and at this moment – in London, Barcelona, and Budapest.

Image: North Atlantic Council visits Italy – Opening ceremony of the Trident Juncture 2015 exercise, 19 October 2015, via NATO.