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NATO Burden Sharing

In an op-ed written for the Strategic Studies Institute, LTC Raymond A. Millen analyses the historical and recent development of commitments to common defense in NATO (thanks to Pamela for the submission):
    Few recall the contentious deliberations at the beginning of the Cold War between the United States and its European allies regarding military contributions to the Alliance. The Truman administration expected the European powers to reconstitute their armies once they had recovered economically. But, having little faith in the American security guarantee, European statesmen refused to raise sufficient forces for defense without a tangible commitment from the United States. With no movement on the matter, the United States relented, deploying several divisions to NATO in 1949. Yet, the European reciprocal pledge did not materialize.
    With security assured through collective defense and the U.S. nuclear umbrella, European states progressively invested in social welfare programs that demanded a greater portion of gross domestic products (GDP). And social welfare states are voraciously self-indulgent. During this transformation, an interesting pattern of behavior manifested. Rather than share collective defense equitably, member states attempted to shift security burdens subtly to other members. Other than voicing annoyance, the United States, as a global superpower in a bipolar world, accepted this behavior because the larger goal of peace in Europe remained intact.
A quick review of historic defense expenditure shows that the picture Millen gives of free-riding Europeans was at least delayed. The UK and France spent a larger percentage of their GDP on defense in 1950 than the USA, and their share of defense expenditure only really started to decline between 1960 and 1970.


G7 Defense Budget as a Percentage of GDP

1950 1960 1970 1980 1990 2000
Canada 2.6 4.2 2.4 1.8 2.0 1.2
France 5.5 6.5 4.2 4.0 3.5 2.6
Germany 4.4 4.0 3.3 3.3 2.8 1.5
Italy 4.3 3.3 2.7 2.4 2.1 2.1
Japan n/a 1.1 0.8 1.0 0.9 1.0
UK 6.6 6.5 4.8 5.1 4.0 2.5
USA
5.1 9.0 8.0 5.6 5.3 3.1
Source: Roger Middleton: The Political Economy of Decline, Journal of Contemporary History 41 (3).

Millen attributes the lack of spending to the existence of extensive social welfare systems, the greediness of the European electorate and the incapacity of parliamentary democracies to push through unpopular spending:
Fundamentally, European affinity for extravagant social welfare programs, the obsession with cutting military spending, and a distinct predilection for peacekeeping operations are manifestations of European political institutions. Because of their pluralistic design, parliamentary governments tend to be unduly influenced by the mercurial passions of the electorate.
A rather elitist view. Millen does not enter into cultural differences, but it might be that Europeans just are a bit more pacifist than Americans. If Europeans have been free-riding on the security umbrella provided by the United States of America, the question arises why the USA has not drawn its own consequences and left NATO. There are several possible answers for that, some of which are partially mentioned by Millen.

  • NATO serves the foreign policy interests of the United States in Europe. It is a tool for ensuring that Central and Eastern Europe don't fall into Moscow's orbit again. America would have less success dealing with these countries on a bilateral basis outside of the institutional setting of NATO, because it would have to compete with Western Europe.
  • America needs to spend as much as it does on defense either way in order to secure its global interests. NATO is not really an extra cost. Europeans get to profit from the security guarantee NATO offers, but do not have any influence on the 'out of area' military policy of the United States to which they are now asked to contribute. Both sides have limited profit from the arrangement.
  • America would have higher defense costs without NATO because it would have less certainty about European support (from intelligence to logistics to military contributions). The same goes for the Europeans. Threatening to end NATO if Europe does not contribute more troops to out of area missions is like playing a game of chicken: if both sides play to win the result is huge mutual costs. The USA has twitched, so Europe gets a free ride.

But perhaps there are also reasons not related to realpolitik.

Related posts on the Atlantic Review:

•  Afghanistan: Merkel Has "No Time" for Burden Sharing Proposals

•  Military Leaders Outline Plan for New Transatlantic Bargain

•  Trans-Atlantic Cooperation: Are Europeans Unwilling to Share the Burden?

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franchie on :

"The UK and France spent a larger percentage of their GDP on defense in 1950 than the USA, and their share of defense expenditure only really started to decline between 1960 and 1970." as far as France is concerned, she had 2 colonial front wars on : Viet Nam and Algeria in the fifties ; in 1970 the whole decolonisation was achieved. "NATO serves the foreign policy interests of the United States in Europe. It is a tool for ensuring that Central and Eastern Europe don't fall into Moscow's orbit again. America would have less success dealing with these countries on a bilateral basis outside of the institutional setting of NATO, because it would have to compete with Western Europe." yes

Joe Noory on :

The orbit that NATO is placing eastern Europe into is the EU's, not the US'. To say that NATO only serves the interests of the US is to misinterpret the politics behind the author's intent: he's making an argument to the DoD to beef up its' support of NATO.

Zyme on :

"The orbit that NATO is placing eastern Europe into is the EU's, not the US'." This is not correct. Nato is a distorted web across Europe with the military threads running towards Washington. So its extenstion into Eastern Europe is primary for the benefit for Washington. Remember that Western Europeans don´t consider Russia a threat anymore? It is the EU extension to the East that is moving Eastern European countries under Brussel's rule. Nato extension partially even has a countering influence. Some Eastern European countries are quite afraid of governance from Brussels, so they especially stress their relations with Washington via Nato alliance. For the others Nato is just another club to associate with the remaining Europeans in.

Don S on :

The table of figures is on the surface accurate but is essentially innacurate. For example the US did indeed spend 5.1% of GDP on defense in 1950, which was the last peacetime year before the Korean war broke out. US defense spending rose to 7.4% in 1951 and 13.2% in 1952, peaking at 14.2% in 1953 and 13.1% in 1954, 10.8% in 1955, only falling below 10% in 1960. Here is a link to a longer-term study of US defense budget expenditures which offer more complete data: http://www.truthandpolitics.org/military-relative-size.php Another curious artifact of the table data is that US defense expenditures in 1950, 1960, and 1980 tend to mark low points in expenditure, which also tend to make the table you posted misleading. One could argue about 1960 (expenditure declined from 1959 and rose in 1961, but then resumed a slow decline until 1966 when it rose sharply. 1979/80 marked another low point. But that is missing the forest for the trees. I think two of the most interesting years in the data are 1940 and 1948. US defense spenfing as a percent of GDP was 1.7% in 1940 and 3.5% in 1948. It would be interesting to see what expenditure levels were during the 30#'s but the data isn't there. I suspect that the US was spending was significantly lower than 1.7% during the 30's - they were already greaing up in 1940 though it was much swifter in 1941 and of course all through WWII. The figures between 1945 and 1948 show a classic pattern for the US, I suspect data between 1865-1868 and 1918-1920 showed a similar pattern. The US historically has geared way up for a major war, then the armies demobilised and defense spending fell to very little, and that pattern was clearly being followed until 1948. In fact 3.5% (although only 10% of the 1945 level) was perhaps a little high, perhaps reflecting the 'tar baby' nature of post-war Europe, and Japan also. The US could not simply pack up and go home this time, things were more complex. Then expenditures actually rose to 4.|% in 1949 and 5.1% in 1950! This is a clear and obvious effect of the establishment of NATO. I think the US *natural* level of defense spending over the years prior to 1940 can be considered as no higher than 2% of GDP. Strategically the US has no threats on it's borders stronger than Mexican bandits, so maintaining a large enough navy to keep the British respectful and a cadre of an Army had been enough. So the argument advanced by Col Millen has this much credence; NATO was a major change in traditional US defense policy and surely the US negociated a quid pro quo with Europe in signing NATO? In fact there is over evidence of that. I read Tony Judt's 'Postwar: A History of Europe Since 1945', where he spends a chapter on the birth of NATO. I can't quite directly but as I recall Professor Judt's analysis supports many of the points Col Millen made, although I doubt Judt would go quite as far as Col Millen did. The bottom line is that Col Millen is substantially correct - the European powers did in fact offload a significant portion of their defense expenditurwe onto the shoulders of the US taxpayer in 1948. That is perhaps understandable, but the subsidy continued after 1960 when Europe had completely recovered and in fact accellerated after the fall of the Berlin Wall.

Don S on :

I would like to challenge Frau Zwagerman to actually answer Col Millen's essay rather than snipe at his figures on the basis of that misleading table. US expenditures during the 50's averaged more than 10% of GDP for the decade. Some of that was due to the Korean War but expenditure continued at a very high level long after that war ended. I think the obvious conclusion is that the US was rebuilding the army and air forces to meet the NATO obligations, and that the US met a far disproportionate share of the cost of the alliance. You seem to assume that NATO implies a rough equivalence of expenditure as a proportion of GDP between the signatories, but why assume that? I would argue that Canada's contribution (2.6% in 1950, 4.2% in 1960, 2.4% in 1970, and 1.8% in 1980) represent a level much closer to the burden that the Truman administration assumed they were assuming, and something like a just level of expenditure. Of course not all the spending was on NATO, but a great deal of it was. I venture to say most because the Soviet/Chinese threat to the far east were much less than the direct soviet threat to Western Europe, and even during Vietnam the bulk of the US Army was either directly defending Europe or ready to deploy to Europe from the continental US swiftly. But the European NATO signatories could not be bothered to even match the US; Germany seems to have spent about 1/3rd of US levels! Millen has a point.

Joe Noory on :

It's also worth looking at what those GDP percentages really mean when looking at the magnatude of their absolute values. Some of the percentages may have been high compared to the US, but the US had a relatively higher GDP per capita, and was otherwise expending much of its' interest making sure western europeans wouldn't have to wear greasy ties, calling each other comrade, looking over their shoulders, and working on heroic tractor production of the current 5 year plan. GDP per capita, 1950 / 1980, in USD US: 6,330 / 11,500 Canada: 5,210 / 10,300 West Germany: 3,170 / 13,370 France: 3,360 / 12,160 U.K.: 3,540 / 9,300 As such, the European committment is in fact significantly higher than it looks in the early years, and they did have much to fear in the likes of Stalin, Khruchev, and Brezhnev, but in relative terms that trailed off.

Nanne on :

That would be [i]meneer[/i] Zwagerman, Mr. S. Thanks for looking up more detailed numbers for the USA. I have to admit that they make Millen's case more convincing. I tried hard to find good historical data for the other countries, but this proved to be quite difficult. SIPRI has data online, but that only goes back to 1988. I found some averages in an article called 'Defence Expenditure and Economic Growth in the European Union: A Causality Analysis' (Journal of Policy Modeling 26 (5)). For 1961-1969 France spent an average of 5.3%, Germany 4.3% and the UK 5.8%. For 1970 to 1979 that went down to 3.9%, 3.4% and 4.8%, respectively. Unfortunately I could not find data for the 1950s. It seems to me that this is at least at the outset quite a sizeable share for peacetime defense expenditure, even as it is lower than what the USA spent. I don't mean to assert that there was no free-riding on the part of Europe under the US' security umbrella. It seems quite plausible that there was some of that, and I tried to formulate some reasons why the US has not drawn consequences beyond making the occassional noise about it. The only part I really find annoying about Millen's article is the blanket association of free-riding with spending on the welfare state. This is not backed up by analysis on his part and thereby seems politically motivated. Of course you can only spend money once, but European countries could also have increased the share of their state sectors to the economy, and can definitely do that in the face of the small increases that would be called for in the current security environment.

Daniel Antal on :

FP Passport had a great post about the relative NATO commitments in Afghanistan. European NATO allies are quite heterogenous, Denmark, the UK, Norway and the Netherlands are actullay bearing a higher death toll than the US adjusted for their millitary aged population. http://blog.foreignpolicy.com/node/8550 It may be the case that NATO is an American defence policy tool in Europe, but I think that does not revert the free-riding hypothesis. And now that the EU has member states that have been occupied by Russian (Soviet) forces this is an oversimplification. NATO membership in these EU member states have a huge popular support. Especially in Poland and Estonia European allience is not regarded strong enough against possible Russian bullying. In the Balkans it was an American-British led NATO campaign that has stopped the bloodshed and pre-empted a possible war in Kosovo and Macedonia. The European Union is enjoying the benefits of enlargement but I think it would not have been feasable without NATO. Given that the EU has not coherent foreign and defence policy there are more varied attituted towards NATO and military spending.

Daniel Antal on :

Sorry, I misquoted the data, Denmark, the UK, Norway and the Netherlands are bearing a larger burden on troops committed; Denmark and Estonia are sharing a disproportiante death toll, and so is Ukraine which may be a NATO candidate. If you [url=http://blog.foreignpolicy.com/node/8550]follow the link[/url] you get the right data.

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