GDP-Based Burden Sharing in NATO: The Politics of Defense Financing - Study of Military Spending by Allies Germany, France, Poland, Italy, Greece, Defense Secretary Mattis Policy under President Trump

This mid-2018 report has been professionally converted for accurate flowing-text e-book format reproduction. 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.

The introduction has set the scene for chapters on the history of the current burden sharing policy, the effectiveness of the current burden sharing policy, examples of exceptions to the current burden sharing policy, alternatives to the current burden sharing policy, and the conclusion. Chapter II's outline of the history of the policy includes the timeline of events that led to the current policy as well as the idea behind the original policy. Chapter III discusses the effectiveness of the current policy. This chapter will compare the capabilities needed to accomplish NATO objectives with those successfully provided by the Alliance. This chapter will also examine how well the current policy is applied and enforced. Chapter IV examines examples of NATO allies that are negatively affected by the current policy and ways in which that policy is being used by some Allies to alienate other Allies that are not meeting the two percent of GDP goal. This undermines the political cohesion of the Alliance. Chapter V presents conclusions. This chapter summarizes the findings of the research concerning the current NATO model for burden sharing and a possible alternative suggested by U.S. Secretary of Defense Jim Mattis.

The post-2014 burden sharing policy of the North Atlantic Treaty Organization (NATO) is an agreement that all NATO members will dedicate two percent of their annual Gross Domestic Product (GDP) to their national defense budget. Many politicians and experts on the matter have criticized this policy as being overly simplified and not addressing the many nuances involved with funding such a complex multi-national organization. If NATO hopes to create a more effective burden sharing policy in the future, it is important to understand the history of the policy and how it was originally meant to be applied.

In order to understand the history of this policy, this study examines its purpose and the effectiveness of each of its components in achieving that purpose. The main ideas to be examined are: the spirit of the idea of NATO burden sharing when it was originally conceived, why NATO burden sharing is divided up the way it is, and the events that brought the discussion among the Allies to where it is today. Starting with the initial informal guidelines set within NATO for national defense spending, this study will discuss the reasons behind each component of the policy, beginning with why GDP was chosen to be the common denominator by which a spending goal was determined.