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Showing posts with label moral hazard. Show all posts
Showing posts with label moral hazard. Show all posts

Saturday, June 25, 2011

re: "This Week at War: Moral Hazard at NATO"

Robert Haddick at Small Wars Journal ("facilitates the exchange of information among practitioners, thought leaders, and students of Small Wars, in order to advance knowledge and capabilities in the field") foresees the end of the free ride.

Money quote(s):

"Europe may not be able to rely on America's free security guarantee forever."

Nothing is forever. That should be plain enough. But even in geopolitical terms, where a single lifetime approximates for "forever," alliances require constant tending, by all their members. Or they're not really alliances.

(Don't get me wrong, as an old "Cold Warrior," I think NATO, when it worked, was one of the greatest achievements of the 20th century.)

"In blasting NATO, Gates explains what moral hazard feels like

In what he termed his "last policy speech as U.S. defense secretary," Robert Gates ripped into his policymaking peers at NATO headquarters in Brussels last week for allowing "significant shortcomings in NATO in military capabilities, and in political will" to occur. Gates noted that although the non-U.S. alliance members have more than 2 million troops in uniform, these countries struggle to deploy 40,000 soldiers into an effective military campaign. Gates also pointed to NATO's embarrassing performance in Libya, noting that European members, despite having a multitude of officers collecting paychecks at frivolous staff billets, have failed to generate the intelligence support and command capabilities needed to wage an effective air campaign. Gates warned of a "dismal future for the transatlantic alliance."

Gates's frustration was no doubt sparked by the realization that his department has become the victim of moral hazard. The United States provides a free security guarantee to Europe. Europeans, meanwhile, have responded in an economically rational way by taking greater risk with their external defense. With the collapse of the Soviet Union removing the last plausible military threat, it was logical for European policymakers to avoid spending on expensive space, communications, and intelligence systems that the United States was largely providing for free. Gates and many other U.S. policymakers see an alliance with too many free riders
"

This has always been the case, at least as long as I can recall. But at least before, when NATO as an alliance had as its primary military purpose the defense of Western Europe, even the smaller, less militarily-capable members knew, and planned for, a fight that would probably take place on, and above, their own territories. So even if they didn't have that many chips to put into the pot, they planned to ante-up with what they did have.

"Gates fears that the United States will have to bail out the Libya operation. This week, Adm. Mark Stanhope, Britain's top naval officer, warned that budget limits and unit rotation requirements could force NATO combatants over Libya to soon have to choose between Libya and Afghanistan. Should a shortfall of European forces in either campaign result, Gates undoubtedly fears that the United States will have to make up the gap.

Over the longer term, the moral hazard issue extends beyond NATO into the Western Pacific, the South China Sea, and soon the Persian Gulf. For example, the United States has a great interest in signaling to China that it has strong security commitments to its partners in the region. Washington likewise wants those partners to share the defense burden and to also avoid provocative behavior. The stronger the signal it sends to China, the less incentive the partners have to do their part.
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&

"Gates concluded his speech by warning Europe's leaders that the next generation of U.S. leaders lacks nostalgia for the Cold War struggle and could walk away from the NATO alliance. In the future, Europe will undoubtedly have to do more for its external defense. That doesn't seem like a problem now since there is no apparent external threat. But should they have to more fully insure themselves, European defense planners should consider how they would rebuild their defenses. They should consider how much time it would take to mobilize political and budgetary authority to prepare for these threats and how long it would take to rebuild the required military forces. Most notable in this regard is the risk of losing both a defense industrial base and functioning military institutions, which once gone might never be restored, at least within a relevant time frame."

You're a member of the NATO alliance you have, not the one you wish you had.

(Or, alternatively you're not.)

A country which so degrades its military institutions to the point where there's not any there left, is likely to have to learn the harsh lesson that one doesn't reconstitute that institution by last-minute conscription notices. This is as true for our European (and other) allies as it is for the U.S.