Contributing to the global public good: the case of NATO

Jens J. Krüger and Michael Neugart

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: While the provision of global public goods generally suffers from free-riding, standard theory also predicts that countries with stronger preferences for the public good contribute more. We take the case of NATO countries’ military expenditures after Russia’s annexation of Crimea as a natural experiment to test the prediction within a synthetic control framework. We find that NATO members with a land border with Russia or Ukraine increased their military expenditures more than synthetically constructed control countries, confirming the prediction. Moreover, NATO countries without a land border to Russia or Ukraine did not decrease their military expenditures.

Date: 2026
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Published in Applied Economics Letters 10 (2026) : pp. 1517-1521

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:151752

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