NATO DEFENSE EXPENDITURES: COMMON GOALS OR DIVERGING INTERESTS? A STRUCTURAL ANALYSIS

By testing for structural breaks in defense expenditures, the dates of change in the pattern of defense expenditures for the NATO allies are determined. If NATO members are responding to a common threat, the breaks should be similar, in both direction and dates, for defense expenditures. The breaks should occur during major NATO strategy shifts. The results of the structural analysis tests suggest that NATO allies do not have an integrated response to NATO-specific defense issues. It appears that NATO members, in general, adjusted their defense spending according to economic imperatives, political issues, and ally-specific defense agendas.