This excellent report has been professionally converted for accurate flowing-text e-book format reproduction. NATO has endured beyond the end of the Cold War by shifting its focus from collective defense to out of area operations. NATO exists only through the voluntary contributions of its members. The United States provides a very large proportion of NATO forces and resources and, thus, has been very interested in getting members to contribute more. In his seminal book, The Logic of Collective Action, Mancur Olsen found that smaller alliance members tend to freeride after meeting the minimum cost, while larger members contribute disproportionately large shares to the collective good.
Most studies of NATO burden sharing measure the proportion of GDP spent on defense. The problem with this measurement is that it evaluates members based on how much they spend on their own national defense, not on how much they contribute to the alliance. Thus, the question is, do NATO members contribute adequately to the alliance? Alternative ways to measure NATO member contributions were investigated to answer that question. Proportionality is the most important principle for defining how member nations share the burden. Members can only be rightfully accused of freeriding if they fail to provide their apportioned share, but NATO does not have a formal system for determining shares. Bases for apportionment were created to determine fair shares based on national capacity in terms of GDP and population.
By comparing financial contributions to NATO common funding and troop contributions NATO's three largest out of area operations (Bosnia, Kosovo, and Afghanistan) to GDP and population-based shares, clear trends emerged in contemporary NATO burden sharing. Analysis of the various alternative measures leads to the conclusion that despite the failure of most NATO member nations to spend the agreed two percent of GDP on defense, they do contribute effectively and proportionally toward NATO funding and operations. Collective action theory only partially applies to NATO; the smallest members tend to contribute equal or greater amounts, proportionally, than their larger counterparts. Furthermore, all members, especially the United States, tend to adjust contributions based upon national interests. Finally, if NATO wishes to better assess and distribute the burden, it must first develop a formal system to apportion it.