GDP-BASED BURDEN SHARING IN NATO: THE POLITICS OF DEFENSE FINANCING

Abstract

The NATO Allies agreed at the September 2014 Wales Summit to spend at least two percent of their gross domestic products (GDPs) on defense by 2024. This commitment has become a point of contention among the Allies and a distraction from the imperative of improving the Alliance’s burden sharing system. The GDP-based burden sharing policy has not proven to be effective or fair, and its implementation has been subject to national political and economic constraints. NATO as a whole has struggled to sufficiently fund the capabilities necessary for its mission effectiveness, even as individual Allies (above all, the United States) have spent enormous amounts on defense. At the same time, some Allies have made significant security contributions—e.g., basing facilities and aid for migrants—that have not shown up in their defense budgets. The disputes over burden sharing have divided the Allies and threatened to further undermine their consensus. U.S. Secretary of Defense Jim Mattis has proposed an approach to burden sharing that would tailor defense spending plans to the unique contributions of individual Allies and focus on strengthening the Alliance’s cohesion and effectiveness.