The article deals with an empirical investigation of the determinants of military expenditures of selected NATO countries. Economic, security, and political determinants were analysed by means of panel models. In order to analyse the economic environment as a determinant of military expenditure, the following variables were applied: Risk of Budget Balance, Risk of Foreign Debt, Risk of Inflation, Risk of GDP per Capita, Risk of GDP Growth, and a control variable, Risk of Current Account as a percentage of GDP. The following variables were employed for the security risk analysis: Terrorism, Cross Border Conflict, Ethnic Tension, and Foreign Pressures. A variable evaluating the Democratic Accountability and a control variable Government Stability were selected to analyse political risks. The results show serious inconsistencies in factors affecting the military expenditures of traditional and new NATO member countries.

The aim of the article is to identify possible “follower” behaviour; it means to reveal countries following the average military burden of North Atlantic Treaty Organization (NATO) member states. To analyse the relationship between military expenditure of NATO member states and selected socio-economic variables (average military burden of NATO member states, gross domestic product, government expenditure (non-military), share of trade balance of gross domestic product and population), the Autoregressive Distributed Lag model has been used. The short-term results demonstrate follower behaviour, especially in the new NATO member states (effort to fulfil the commitment to spend 2% of gross domestic product on defence). The long-term results have revealed a positive relationship between military expenditures and the variable describing the average military burden of NATO member states in the traditional and also new NATO member states. A positive relationship between military expenditure and gross domestic product has also been observed in the majority of evaluated countries in the long-term model. The public good effect has been determined in six member states only, and the crowding out effect in five member states. A positive effect of the balance of trade on military expenditure has been observed in two countries only.

Changes in the security environment after the Cold War and decreasing number of armed conflicts in NATO member states lead these countries to a gradual reduction in military expenditure. However, new security threats that these countries faced at the beginning of the 21st century brought a massive growth of military expenditure especially in the USA which lead to significant deepening of disparities between the USA and European NATO member states. The aim of the article is to investigate disproportionality of burden sharing among 28 NATO members and via multidimensional statistic methods identify free-riding in Alliances. A model based on theory of the demand for military spending provides the basis for an investigation of the disparities (identified especially in the characteristics of the economic and security environment) in determinants influencing military expenditure. Finding suggest that the Alliance is not mainly an economically homogenous body and individual economies thus allocate a significantly different amount of GDP for the needs of the armed forces in dependence on political priorities of individual governments, public finances or overall economic condition of national economies. However, the results of the classification model reveal the fact that group of countries identified as core states of the “traditional” NATO member states (with above-average values of variables) do not allocate the long-term recommended amount of military expenditure of 2% of GDP. These countries are suspected of dangerous free-riding.

This contribution deals with modelling of military expenditure and its potential security and economic determinants by an Autoregressive Distributed Lag (ARDL) model. This approach is applied to several NATO member countries over the period 2001–2016, namely to Visegrad group countries and Baltic states. Time series of military expenditure (database SIPRI), the risk of inflation, GDP growth, terrorism, foreign pressure, cross-border conflict and ethnic tension (database of Political Risk Service Group) are used in analysis.

The article presents the use of the ARDL model to identify military expenditure determinants of the Baltic States (Lithuania, Latvia, and Estonia). Factors influencing military expenditure include the variables characterizing the economic environment of the analyzed countries (GDP per Capita, Government Deficit/Surplus, General Government Gross Debt, Inflation), and the security environment measured by Risk of Foreign Pressures, Risk of Cross-border Conflict, and Democratic Accountability. General conclusions about the analysis of relationships between the military expenditure level and selected economics and security determinants were confirmed in the cases of Government Deficit/Surplus, GDP per Capita and Inflation. The results, therefore, indicate that the military expenditure of Estonia and Lithuania depended on the state budget deficit where military expenditure tended to go down in relation to an increasing deficit within the assessed period. As far as Estonia is concerned, the findings about relationship between the economic position and military expenditure was validated as an increasing economic performance tended to increase military expenditure.

This study examines NATO's cohesion amid global power competition, focusing on the alliance's internal and external determinants from 2002 to 2023. Using cluster analysis, it evaluates 19 variables across political, military, security, and economic factors to identify divergences among traditional and new member states. The findings reveal a heterogeneous alliance influenced by economic disparities, divergent threat perceptions, and unequal military spending. However, external threats, particularly Russia's aggression, have fostered temporary solidarity. The study highlights the strategic implications of NATO's cohesion for its deterrence and defence roles, emphasizing the need for equitable burden-sharing and synchronized policies to mitigate fragmentation. The research offers policy recommendations to strengthen NATO’s relevance and adaptability in a contested global landscape.