How NATO 2% debate misses key factor – Study

As security pressures rise across Europe, the North Atlantic Treaty Organization’s (NATO) defence spending debate has returned to the spotlight. Russia’s war in Ukraine and renewed allied pressure have brought defence commitments back into sharper focus.

A recent study by researcher Fidelis David offers a different explanation for why NATO member states vary widely in defence spending levels. Published in Contemporary Security Policy, the co-authored research argues that the long-running debate over NATO’s 2% benchmark may not be fully explained by threat exposure or economic capacity alone.

The study comes at a time when disagreements over alliance burden-sharing continue to shape transatlantic politics. In recent months, the United States has again urged European allies to increase their defence contributions amid the continuing war in Ukraine and broader strategic competition. Within that debate, the research suggests that focusing only on the 2% target may overlook the wider political logic influencing how allied governments make spending decisions.

The article examines defence spending patterns across NATO member states in the years following the 2014 Wales Summit, where allies formally pledged to move toward spending 2% of GDP on defence. Although the pledge was intended to strengthen burden-sharing, many allies remained below the benchmark even as the security environment became more challenging. The study argues that this variation cannot be fully understood through threat perception and economic strength alone.

Instead, the research suggests that defence spending also performs a signaling function within the alliance. According to the study, allied governments do not allocate resources solely in response to external threats or domestic economic conditions. They may also use defence budgets to communicate commitment, reliability, and political alignment to fellow alliance members and important external audiences.

Drawing on panel data from NATO member states between 2014 and 2022, the study finds that allies receiving greater material support from the United States tended to increase defence spending, partly as a way of signaling loyalty and commitment to the alliance’s central security partner. It also suggests that states embedded in denser international institutional networks often face stronger reputational incentives to demonstrate reliability through visible fiscal effort. In addition, allies with deeper and longer-standing positions inside NATO may experience greater internal pressure to show commitment through defence spending.

The study therefore questions conventional burden-sharing arguments that treat defence expenditure mainly as a product of wealth, threat, or free-riding incentives. Rather than viewing military spending purely as a strategic response to danger, the research presents it as part of a broader political process in which alliance members use spending decisions to manage credibility and relationships within the alliance.

The findings also speak to a wider policy question facing governments participating in security partnerships while balancing domestic spending pressures. In that sense, the research suggests that defence spending is not only about military preparedness. It may also reflect how states position themselves politically within alliances and how they seek to be perceived by allies, strategic partners, and the broader international system.