A spatial analysis of NATO burden sharing at the operational levels

The paper applies connectivity measures—membership status, contiguity, inverse distance, and power projection—to investigate North Atlantic Treaty Organization (NATO) defense burden sharing at the operational or (defense spending) categorical levels (i.e., personnel, infrastructure, equipment, and operations and maintenance [O&M]) during the post-Cold War era, 1991–2022. Alternative spatial weights, assigned to allies' operational-based spillovers, indicate diverse free-riding responses with the greatest free riding characterizing equipment, followed by O&M and then personnel outlays. Infrastructure spending, which does not permit much substitution among allies, is understandably characterized by the least inter-ally free riding. After the Wales Summit and Russia's invasion of Crimea in 2014, there are marked changes to NATO free riding at the operational levels, with equipment spending displaying reduced free riding. Generally, there is little evidence of a positive reaction to increased Russian military expenditures; however, there is some enhanced operational spending by NATO allies nearest to Russia after 2014. Also, we estimate simultaneous spatial autoregressive models to gauge inter-operational spending responses to the four kinds of spillovers, where we find interesting inter-operational substitutions and complementarities.