BURDEN SHARING, STRATEGY, AND THE DESIGN OF NATO

Authors

  • TODD SANDLER,

  • JOHN F. FORBES

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    • *University of Wyoming (U.S.A.), and University of Glasgow (U.K.), respectively. The paper was written when Sandler was on leave at the Department of Economics and Related Studies at the University of York, U.K. He gratefully acknowledges the support of a NATO Postdoctoral Fellowship in Science. We thank T.J. Loveland from the U.S. Mission to NATO who provided data on NATO's civil and military budgets. Comments by Jon Cauley, Ann Chamberlain, Shelby Gerking, Donna Lake, James R. Marsden, Mancur Olson, Kate Ranta, William Schulze, V. Kerry Smith, and an anonymous referee significantly improved the paper. All views expressed and any remaining shortcomings are solely those of the authors.


Abstract

This study shows that recent technological advancements in weapons, the policy of detente, and the strategic reorientation of NATO are increasing the relative importance of damage-limiting weapons. The resulting increases in excludable benefits and common-interest awareness permit NATO allies to share defense burdens more efficiently via markets according to benefits received than was the case in the 1960s. The statistical results support our hypothesis that the distribution and nature of benefits, not industrial size, determine the relative burdens of the allies. Statistical tests discriminate between the joint product and deterrence models.

War is a matter not so much of arms as of expenditure, through which arms may be made of service. (Thucydides, History I)

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