Burden Sharing, Burden Shifting, and Strategy in the Nordic States

Abstract

Do informal international agreements without coercive mechanisms affect states’ behavior? While scholars have long been interested in this question, answering it often poses empirical challenges, particularly in the arena of international security. By asking and answering a narrower question – is NATO’s Wales Pledge on defense spending working? – I can empirically test the extent to which states have adhered to a public agreement without formal or coercive enforcement mechanisms. I argue that the Wales Pledge has led to higher spending because NATO the organization uniquely enables allies to influence one another’s defense planning, publicly and privately. I find support for this argument by interrogating disaggregated defense expenditures of NATO and EU members, and by comparing NATO allies Denmark and Norway with non-allies Finland and Sweden. Although the Wales Pledge has been maligned, it served its purpose by encouraging allies to spend more on defense, particularly on equipment modernization.

Keywords: NATO, EU, Burden Sharing, Burden Shifting, Defense Spending, Transatlantic Security, Political Economy, Strategy, Defense Economics

JEL Classification: F52, F53, F55, H56, H62, H63, H87