Back to the Past: A Critical Review of NATO Burden Sharing from 1949 to the Present

Jomana Amara, Naval Postgraduate School, 1 University Circle, Monterey, California 93943-5138, USA


This note surveys NATO’s three distinct defense doctrines, Mutual Assured Destruction; Flexible Response; and Crisis management; and argues that NATO is now in a transformation to a fourth doctrine best described as Conflict Containment. The approach to burden sharing appears to be the same in the various periods of the defense doctrines with the major countries shouldering the highest defense burdens and the NATO members adjusting their defense burdens in response to individual concerns such as economic concerns, political challenges, and specific national agendas rather than a NATO wide joint defense imperative. The behavior of the NATO allies in the Conflict Management period with regards to burden sharing is no different than the previous periods with minimal attempts to reach the Wales Summit intentions.

“I don’t care to belong to any club that will have me as a member.” Groucho Marx


The countries that formed NATO in 1949, Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, United States, and the United Kingdom, were joined by Greece and Turkey (1952); West Germany (1955 and a unification with East Germany in 1990); and Spain (1982). NATO underwent a major expansion after the collapse of the Berlin Wall in 1989. Czechia, Hungary, and Poland joined in 1999, followed by Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia in 2004; Albania and Croatia in 2009; Montenegro in 2017; North Macedonia in 2020; With the start of the Russia -Ukraine war, NATO witnessed a new expansion with Finland joining in 2023 and Sweden’s accession, after Turkey and Hungary dropped their opposition, into the Alliance expected soon.[1]

Since its founding in 1949, NATO has espoused three defense approaches: In the early years, Mutually Assured Destruction (MAD), relied on the superiority of the strategic nuclear weapons of the United States as a deterrent to counter any threat from the Soviet Union. In the late 1960s and 1970s, NATO changed its doctrine to Flexible Response to allow for a measured response as the Soviet Union started to build its strategic forces. With the end of the Cold War, Crisis Management became the new doctrine as NATO faced different security challenges such as civil wars, disputes over natural resources, regional conflicts, peacekeeping missions, and various arms control challenges.

With the rise of Russia as a challenging power bordering NATO and the start of the Russia – Ukraine war, NATO is now engaged in Conflict Management on its border.

This note reviews literature covering historical NATO defense burdens in the three initial doctrine periods and concludes that the NATO members adjust their defense burdens in response to individual concerns such as economic concerns, political challenges, and specific national agendas rather than a NATO-wide joint defense imperative. The note also reviews literature covering current NATO allies’ defense burdens in the fourth doctrine, Conflict Containment, and concludes that NATO members, a decade after reaffirming their commitment to the two percent guideline, still seem to be more preoccupied with national concerns.


The level of defense burdens is used to gauge the response of NATO allies to doctrine transformation and to describe the behavior of member nations as an international alliance with the idea that defense expenditures for the allies should move in unison in a coordinated response to threats and challenges. Additionally, NATO has a minimum informal guideline of military expenditures at two percent of GDP for each nation – the measure of a nation’s defense burden – in an effort to avoid free riding. The informal guideline was reaffirmed in the Wales Summit Declaration (2014) stating among other goals, that allies currently meeting the NATO guideline of spending a minimum of two percent of their Gross Domestic Product (GDP) on defense should target to continue to do so. Allies whose current proportion of GDP spent on defense is below the two percent target will increase defense expenditure in real terms and move towards the two percent guideline within a decade.[2]

The general consensus in the literature covering the first three NATO doctrines, MAD, Flexible Response, and Crisis Management is that NATO allies do not have a common response to NATO-specific defense concerns, and most NATO nations fell below the two percent military expenditure guidelines.

Solomon (2004) revisits the NATO burden-sharing debate that used proxy measures, other than the share of military expenditures to GDP, to measure the equality of relative benefits and burdens. Solomon points out that the equality of benefits and burdens in NATO can be rejected for various time periods using non-parametric tests and questions the choice of benefits used.[3] He demonstrates that removing one of the proxy measures of benefit, “exposed borders” is significant in rejecting the equality of benefits and burdens. Amara (2007) evaluates NATO’s long-run defense burdens by generating a defense burden index using the growth of defense spending, defense share in national output, defense share in government spending, defense spending per capita, and defense share in total NATO spending from 1949-2002. Amara concludes that instead of an integrated response to threats, defense spending in NATO nations appears to be driven by regional security concerns. Amara (2008) tests for structural breaks in defense expenditures for NATO allies using military expenditure data from 1949-2004.

The study determines the dates of change in the trend of defense expenditures arguing that if NATO allies respond to a common threat, the date and direction of change for defense expenditures should coincide with changes in NATO strategy. The study reaches a conclusion that there is no evidence to suggest that NATO member countries are responding in a joint and concerted manner to threats. NATO nations appear to adjust their spending in response to country-specific issues such as economic concerns, political considerations, and national agendas. In addition, the study asserts that NATO nations appear to be reducing their military expenditures over time.  Amara and Paskevics (2010) examine the impact of joining NATO on military expenditures prior to and after accession to the alliance. The authors point out that as a nation commits to join NATO, its military expenditures increase up to the membership point and then start to decline. They conclude that on average most nations did not reach the two percent guideline. 

As NATO entered the fourth phase, Conflict Containment, the consensus in the literature closely mirrors the conclusion reached describing NATO behavior for the first three phases, namely free riding and spending below the two percent guideline.

Tian et. al. (2023) review military spending subsequent to the war in Ukraine and report that the sharpest increase in military spending took place in countries bordering the war zone such as Lithuania (2.5% of GDP up 27% overall), Finland (1.7% of GDP an overall increase of 36%), and Poland (2.3% of GDP and increase of 11%). The remaining NATO countries declared their intention to increase spending on the military, but the increase has not registered yet. In fact, Latvia, Slovenia, Croatia, Romania, Slovakia, Italy, Czechia, Portugal, and Hungary had a decline in spending. Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Romania, Slovakia, the UK and the USA are projected to exceed the two percent threshold in 2023.[4]

Blum and Potrafke (2020) analyzing defense spending from 2010-2018 for NATO countries that committed to the two percent guideline during the Wales Summit, conclude that domestic political considerations are a strong determinant of whether or not NATO countries meet the two percent guideline.  Strong swings in government direction, from left to right or vice versa, result in less compliance with the two percent spending. The authors point to unsteady or new national governments being less likely to comply with international agreements and to reach and sustain policy targets set in international forums. Haesebrouck (2022) makes a similar argument to Blum and Potrafke (2020) regarding the influence of domestic considerations on defense spending for NATO. He explores spending in the five years following the Wales summit and concludes that NATO allies responded to direct threats, national budget constraints, and the ideological orientation of the national government.

Kim and Sandler (2020) apply three measures: within ally measures, ally military expenditure to GDP; between ally measures, ally military expenditure to NATO military expenditure; and general security burdens based on military spending, development assistance, and UN peacekeeping spending – to NATO data between 2011  and 2017. They also construct benefit shares based on GDP, population, and exposed borders. They conclude that there is an uneven sharing of defense burdens amongst the allies and minimal correspondence between the burdens and benefits. In a similar study, George and Sandler (2022) examine NATO burden sharing using spatial and economic weights on military spending. The weights were constructed using membership status, contiguity, US power projection, distance between capitals, trade, and proximity to Russia. Their analysis covered the time period from 1991-2020. They determine patterns of free riding with dependence on the spending of larger allies. In a subsequent study, Kim and Sandler (2023) construct a composite burden measure for the same period, 1991-2020. The measure accounts for military spending, foreign assistance, and peacekeeping efforts. They find evidence of free riding with allies decreasing their defense spending as the collective NATO spending increases.


Regardless of the proxy used for burden sharing, the NATO ally approach to burden sharing appears to be the same in the various periods of the defense doctrines with the major countries shouldering the highest defense burdens and the NATO members adjusting their defense burdens in response to individual concerns such as economic concerns, political challenges, and specific national agendas rather than a NATO wide joint defense imperative. In addition, NATO member nations increase their defense spending prior to accession and appear to scale down military spending after attaining membership. Finally, few nations reach or exceed the two percent guideline reaffirmed in the Wales Summit, leading to perceptions of free riding.


Alozious, J. (2022) NATO’s Two Percent Guideline: A Demand for Military Expenditure Perspective, Defence and Peace Economics, 33:4, 475-488, DOI:10.1080/10242694.2021.1940649

Amara, J and Paskevics, M (2010). Unfulfilled Promises: The Impact of Accession on Military Expenditure Trends for New NATO Members. Comparative Strategy, 29: 5, 432 — 449

Amara, J (2008).” NATO Defense Expenditures: Common Goals or Diverging Interests? A Structural Analysis”, Defence and Peace Economics,19:6,449 — 469

Amara, J. (2007) Evaluating NATO long run defense budgets using unit root tests. Defense and Peace Economics, 18(2) 157–181.

Blum, J. and Potrafke, . (2020). Does a Change of Government Influence Compliance with International Agreements? Empirical Evidence for the NATO Two Percent Target, Defence and Peace Economics, 31:7, 743-761, DOI:


Gadea, M., Pardos, E. and Pérez-Forniés, C. (2004). A long-run analysis of defense spending in the NATO countries (1960–99). Defence and Peace Economics 15(3) 231–249.

Gates, W. and Terasawa, K. (2003) Reconsidering publicness in alliance defense expenditures: NATO expansion and burden sharing. Defence and Peace Economics 14(5) 369–383.

Haesebrouck, T. (2022) NATO Burden Sharing after the Wales Summit: A Generalized Set Qualitative Analysis, 33:6, 637-654, DOI:10.1080/10242694.2021.1928435

Hartley, K. and Sandler, T. (1999) NATO burden-sharing: past and future. Journal of Peace Research. 36(6) 665–680.

George, J. and Sandler, T. (2022). NATO defense demand, free riding, and the Russo-Ukrainian war in 2022. Journal of Industrial and Business Economics.49:783-806.

Khana, J. and Sandler, T. (1997) Conscription, peace-keeping, and foreign assistance: NATO burden sharing in the post-cold war era. Defence and Peace Economics 8 101–121.

Khanna, J. and Sandler, T. (1996) NATO burden sharing: 1960–1992. Defence and Peace Economics 7(1) 115–133.

Kim, W. and Sandler, T., (27 Jun 2023): NATO Security Burden Sharing,1991–2020, Defence and Peace Economics, DOI: 10.1080/10242694.2023.2230408

Kim, W., and Sandler, T., (2020) NATO at 70: Pledges, Free Riding,

and Benefit-Burden Concordance, Defence and Peace Economics, 31:4, 400-413, DOI:


Odehnal, J. and Neubauer, J. (2020) Economic, Security, and Political

Determinants of Military Spending in NATO Countries, Defence and Peace Economics, 31:5, 517-531, DOI: 10.1080/10242694.2018.1544440

Sandler, T. and Forbes, J. (1980) Burden sharing, strategy, and the design of NATO. Economic Inquiry 18 425–444.

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[1] NATO Review (8 June, 2023). NATO member countries. Retrieved 18 December, 2023.

[2] NATO Review (5 September, 2014). Wales Summit Declaration. Retrieved 18 December, 2023.

[3] Solomon (2004) questions the benefit proxies used by Khanna, J. and Sandler, T. (1996) NATO burden sharing: 1960–1992. Defence and Peace Economics 7 115–133;

Khanna, J. and Sandler, T. (1997) Conscription, peacekeeping, and foreign assistance: NATO burden sharing in the post-Cold War era. Defence and Peace Economics 8 101–121.

Khanna, J., Sandler, T. and Shimizu, H. (1998) Sharing the financial burden for UN and NATO peacekeeping: 1976– 1996. Journal of Conflict Resolution 42 176–195.

Sandler and Murdoch, J.C. (2000) On sharing NATO defence burdens in the 1990s and beyond. Fiscal Studies. 21 (3) 297–327.

[4] NATO Review (7 July, 2023). Defence Expenditures of NATO Countries (2014-2023). Retrieved 18 December, 2023.

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