Bad Idea: Demanding Allies Spend Two Percent of GDP on Defense

December 21, 2018

For decades, the United States has lamented the fact that its allies around the world, from Europe to the Pacific, spend too little of their own resources on defense. NATO has long encouraged member states—both officially and unofficially—to spend a minimum of two percent of their gross domestic product (GDP) on defense—a standard that has been flagrantly disregarded. According to 2018 estimates , only five NATO members including the United States (3.50 percent) spend 2 percent of their GDP on defense, while major allies in Germany (1.24 percent) and France (1.81 percent) fall short of the threshold. And some of our main allies in the Pacific aren’t doing any better by this metric. Australia spends approximately 1.8 percent of its GDP on defense while Japanese defense expenditures fail to account for even one percent of its GDP according to 2017 estimates from the Military Balance 2018.

Don’t get us wrong—our allies and partners should be doing much more to provide for their own security and contribute more equitably to collective defense efforts. But demanding that they spend an arbitrary ratio of defense to GDP is ridiculous and counterproductive. Defense spending as a percentage of GDP is a fundamentally flawed metric that does not fully capture the contribution of allies and does little to incentivize them to do what we actually want them to do—build a sizable, capable, and well-trained military that is designed and prepared to operate in coalitions when called upon.