In 2006 NATO mandated its members to spend 2% of their GDP on military defense. As of 2023, only 10 of the 32 countries were hitting this target. Without any enforcement mechanism, this is an example of the free rider problem.
The mandated spending program exists to share the burden of protection amongst all members of NATO, making them stronger as a collective. Although all countries are required to spend 2%, this does not mean the same amount is contributed by each member. The United States is projected to spend 3.38% of its GDP in 2024 compared to Poland’s 4.12%, however, the U.S.’s contributions account for two-thirds of NATO’s overall military spending. Other countries have an incentive to free ride off of the contributions of these big spenders without contributing their share, secure in the expectation of aid. Instead of pushing to reach their 2% minimum, they drag their feet, slowly increasing over years. Following Summer 2024, 23 countries are expected to reach the required spending, a massive increase in one year. This suggests two things: first, they were capable of reaching the spending floor the entire time and, second, there is a threat incentivizing them to increase individual military spending. The first reinforces the notion that this has been a problem of free riding for 18 years and the second is a sign of a potential war.
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