Defense planning in the fog of peace: the transatlantic currency conversion conundrum

ABSTRACT

Resource allocation to and within defense budgets is grand strategy. NATO and the EU coordinate defense planning and encourage fair burden-sharing among their members. We analyze the effect of agreed planning processes, namely the “NATO Defense Planning Process (NDPP)” on the conversion of political will to resources and then to capabilities development across the transatlantic security community. In a “fog of peace” featuring diverse threats, and in which allies may disagree on strategic rivals and sources of risk, national and regional political economies shape strategy, not the other way around.

KEYWORDS:

• NATO
• defense planning
• transatlantic security
• burden sharing
• strategy
• political economy

Disclosure statement

Jordan Becker is an active duty U.S. Army officer. The research above is his own and does not reflect any U.S. government position.

Notes on contributors

Jordan Becker was Senior Transatlantic Fellow at the Institute for European Studies at the Vrije Universiteit Brussel during this research, and is currently the U.S. Liaison to the French Joint Staff. He completed his PhD at King’s College London in 2017, and he is a Lieutenant Colonel in the United States Army. He previously served as defense policy advisor to the U.S. Ambassador to the North Atlantic Treaty Organisation and as Military Assistant and Speechwriter to the Chairman of the NATO Military Committee (International Military Staff). He is solely responsible for his research, which does not reflect any official U.S. government position.

Robert Bell is CEO of National Security Counsel (NSC), a Limited Liability Corporation consulting firm, and Distinguished Professor of the Practice at the Sam Nunn School of International Affairs at Georgia Tech. He is a PhD candidate in International Relations at the Fletcher School at Tufts University. Previously, Mr. Bell served as the Senior Civilian Representative of the Secretary of Defense in Europe and the Defense Advisor to the U.S. Ambassador to the North Atlantic Treaty Organisation, as well as Assistant Secretary General for Defense Investment on NATO’s International Staff.

ORCID

Jordan Becker http://orcid.org/0000-0001-7144-6403

Notes

1 NATO leaders agreed at their (1978) Washington Summit to “an annual increase in defence expenditure in the region of 3% in real terms”. It differed significantly from the Wales pledge in three important respects. First, the goal of an annual rate of increase, rather than a specific target as a share of GDP made the Washington Summit goal less concrete than the Wales pledge. Second, the 1978 3% goal made no mention of the composition of expenditures, while the Wales pledge specifically established a 20% target for equipment modernisation. Finally, the 1978 3% increase goal stemmed from the May 1977 Defence Ministerial guidance, which tied it directly to specific Soviet behaviour: “This agreement stemmed from the 1977 Defense Ministerial Guidance, which specifically related these increases to one threat – steady growth in military power is backed in the Soviet Union by an allocation of resources for defence estimated at between 11% and 13% of gross national product (nearly three times the NATO average) and by an annual increase in real terms in defence expenditure of about 5%” (NATO DPC 1977). The Wales pledge, on the other hand, is tied assiduously balanced language regarding threats: “challenges posed by Russia and their strategic implications”, and “risks and threats emanating from our southern neighbourhood, the Middle East and North Africa”. Additionally, the Wales pledge addresses defense industrial policy, which the 1978 Washington Summit did not.

2 Wherein clear provisions for deciding future disagreements between contracting parties are not established (Grossman and Hart 1986).

3 “A central objective of the review was to shift the basis of defense planning from a ‘threat-based’ model that has dominated thinking in the past to a ‘capabilities-based’ model for the future. This capabilities-based model focuses more on how an adversary might fight rather than specifically whom the adversary might be or where a war might occur. It recognizes that it is not enough to plan for large conventional wars in distant theaters. Instead, the United States must identify the capabilities required to deter and defeat adversaries who will rely on surprise, deception, and asymmetric warfare to achieve their objectives (DOD 2001, p. IV)”.

4 Secretary General Stoltenberg announced following the June 2016 Defense Ministerial Meeting that “Today, Allies have agreed to accept new NATO capability targets. Meaning that we have committed to step up in key areas, including heavy equipment, air-to-air refuelling, and more forces to move at even shorter notice”.

5 At the time Denmark released its “National Fact Sheet”, these were: 3A. Implementation of quantitative national targets; 3B. Implementation of qualitative national targets; 4A. Share of Land Forces Personnel which are deployable; 4B. Share of Airframes which are deployable; 4C. Share of Vessels which are deployable; 5A. Share of Land Forces Personnel which are sustainable; 5B. Share of Airframes which are sustainable; 5C. Share of Vessels which are sustainable; 6A. Share of Deployable Land Forces Personnel deployed on NATO Operations and Missions Abroad; 6B. Share of Deployable Land Forces Personnel deployed on non-NATO Operations and Missions Abroad; 6C. Share of Deployable Land Forces Personnel deployed specifically for supporting Assurance Measures (depicted as person-days); 7A. Share of Deployable Airframes deployed on NATO Operations and Missions Abroad; 7B. Share of Deployable Airframes deployed on non-NATO operations and Missions Abroad; 7C. Share of Deployable Airframes employed specifically for supporting Assurance Measures (depicted as airframe-days); 8A. Share of Deployable Vessels deployed on NATO Operations and Missions Abroad; 8B. Share of Deployable Vessels deployed on non-NATO Operations and Missions Abroad; 8C. Share of Vessels (regardless of displacement) deployed specifically for supporting Assurance Measures (depicted as vessel-days); 9. Fulfilment of NATO Command Structure (NCS) positions; 10. Fulfilment of NATO Force Structure Headquarters Positions (NFSHP); 11. Fulfilment of Immediate Response Force (IRF) of the NATO Response Force (NRF)

6 Deployability and sustainability of forces are among both organizations’ (NATO 2016, EDA 2018b) “output metrics”.

7 While NATO and the EU have not released unclassified contribution metrics, we may reasonably consider ISAF contributions identified by NATO and Libya contributions identified by scholars (Haesebrouck 2017) as reasonable measures.

8 A public good is one whose consumption is nonrivalrous – meaning that one individual can consume it without reducing its availability to others, and nonexcludable, meaning that no individual can practically be excluded from using it. At the national level defense is generally considered a public good.

9 Kim and Sandler (2019) offer an extraordinarily clear and concise discussion of the concept of excludability: “Allied defense efforts may also yield ally-specific or private benefits that are excludable and rival among allies. For instance, an ally’s defense may supply national guard, home disaster relief, uprising protection, and flood control. Many other country-specific benefits may be associated with an ally’s ME. Thus, an ally’s ME can offer excludable (border protection and country-specific) and nonexcludable (deterrence) benefits. The share of excludable to total defense benefits determines burden sharing, exploitation, suboptimality, and alliance size restrictions (Sandler 1977). If, for example, allied defense is fully excludable, then burden sharing will be based on benefits received, there will be no exploitation or suboptimality, and alliance size must be founded on thinning considerations. There is then an anticipated concordance between defense burdens carried and benefits received. If, however, all allied defense benefits are nonrival and nonexcludable, then the Olson-Zeckhauser concerns apply including exploitation and free riding. Any changes to strategic doctrine, alliance size, or threats may influence the share of excludable to total defense benefits, thereby affecting burden sharing”.

10 Measured by the European Commission’s Fiscal Rules Index, “a comprehensive time-varying index for each Member State constructed by summing up all fiscal rule strength indices in force in the respective Member State weighted by the coverage of general government finances of the rule” (European Commission 2016).

11 Reflecting “preferences for a transatlantic approach to European security in which the United States’ role is central” (Becker and Malesky 2017, p. 165).

12 There is ample anecdotal evidence of varying threat perceptions, ranging from the studiously balanced treatment given to terrorism and Russia in summit declarations, to disagreements between France, Germany, Turkey and the United States leading up to the London Summit. This anecdotal evidence is supported by statistical evidence as well: the standard deviation of threat perception measured with an automated content analysis of over 200 national security strategies rose from 2.17 in 1990 to a high of 15.73 in 2013 before declining to 10.34 in 2019. Replicating the analysis in Table 2 with this measure of threat perception has no substantive effect on the results.

13 NATO understands resilience as a whole of society issue: “We will continue to increase the resilience of our societies, as well as of our critical infrastructure and our energy security” (NATO 2019c).