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221. The Diffusion of New Technologies

Author:
Aakash Kalyani, Nicholas Bloom, Marcela Carvalho, Tarek A. Hassan, Josh Lerner, and Ahmed Tahoun
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We identify phrases associated with novel technologies using textual analysis of patents, job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs relating to new technologies. First, the development of economically impactful new technologies is geographically highly concentrated, more so even than overall patenting: 56% of the most economically impactful technologies come from just two U.S. locations, Silicon Valley and the Northeast Corridor. Second, as the technologies mature and the number of related jobs grows, hiring spreads geographically. But this process is very slow, taking around 50 years to disperse fully. Third, while initial hiring in new technologies is highly skill-biased, over time the mean skill level in new positions declines, drawing in an increasing number of lower-skilled workers. Finally, the geographic spread of hiring is slowest for higher-skilled positions, with the locations where new technologies were pioneered remaining the focus for the technology’s high-skill jobs for decades.
Topic:
Development, Economics, Science and Technology, Innovation, and Labor Market
Political Geography:
North America and United States of America

222. Implications of the Inflation Reduction Act for the Biotechnology Industry

Author:
Cody Hyman, Henry Dao, Gregory Vaughan, and Fred D. Ledley
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Inflation Reduction Act of 2022 contains landmark provisions authorizing the government to negotiate the price of selected drugs covered by Medicare Part D. The biopharmaceutical industry has criticized these provisions as a threat to innovation arguing that reducing future revenues could disincentivize equity investment in biotechnology. This research examines the sensitivity of private and public equity investment in the biotechnology industry to drug price indices and market conditions from 2000-2022. The analysis shows that equity financing and valuation in the biotechnology industry were strongly associated with equity market conditions but not indices of either producer or consumer drug prices. These results do not support claims of an association between changing drug prices and the availability of equity capital to emerging biotechnology companies, which currently sponsor the majority of all clinical trials. These results add to evidence that the IRA may not have a negative impact on pharmaceutical innovation.
Topic:
Economics, Health, Inflation, Innovation, Biotechnology, Public Investment, and Inflation Reduction Act
Political Geography:
North America and United States of America

223. Scale and Scope in Early American Business History: The “Fortune 500” of 1812

Author:
Richard Sylla and Robert E. Wright
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Fortune magazine began publishing annual rankings of U.S. corporations by revenue in 1955. Ever since, scholars and forecasters have analyzed changes in the Fortune 500 to help inform their judgments about industry concentration and the relative importance of different sectors of the economy. Unfortunately, earlier data are scarce, especially before the Civil War. Through extensive research we have created a sort of historical “Fortune 500” going back to 1812, ranked by corporate capitalization, which we share here. Numerous insights can be drawn from this dataset, including the historical dominance of the banking and finance sectors and the early importance of manufacturing. Perhaps the larger significance of being able to come up with a Fortune 500 for 1812, though, is the fact that even with a population of only about 7.5 million, U.S. already had more business corporations than any other country, and possibly more than all other countries put together, securing its role as the world’s first “corporation nation.” The ease of incorporating businesses released a lot of entrepreneurial energy that helped to build an ever-expanding economy and by the end of the 19th century, the U.S. would be the world’s largest national economy with tens of thousands of corporations.
Topic:
Economics, History, Business, and Industry
Political Geography:
North America and United States of America

224. Tesla as a Global Competitor: Strategic Control in the EV Transition

Author:
Matt Hopkins and William Lazonick
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
In this paper, we assess the implications of Elon Musk’s strategic control over Tesla, the pioneering company that has become central to the electric vehicle transition. We document how, as Tesla’s CEO for 16 years, Musk has exercised strategic control to direct the transformation of the company from an uncertain startup to a global leader. Now that Tesla is profitable corporate predators (aka hedge-fund activists) may challenge Musk’s strategic control—a possibility of which the CEO is well aware. To retain his control over Tesla as a publicly listed company, Musk depends on holding a sufficient proportion of Tesla’s shares outstanding to possess the voting power to fend off predatory value extractors. In addition to accumulating Tesla shares by investing $291.2 million at early stages of the company’s evolution, Musk has relied upon massive stock-option grants from the Tesla board, under the guise of “compensation”, in 2009, 2012, and 2018, to boost his shareholding and, with it, his voting power. Hence the Delaware Court of Chancery’s decision in January 2024 to rescind Musk’s 2018 stock-option package—by far the largest ever granted to a corporate executive—poses a threat to Musk’s strategic control at Tesla. As the “Technoking” of Tesla strategizes to maintain his control over the company’s decision-making, anyone concerned with the role that Tesla will play in the evolving EV transition should be asking how CEO Musk might use, or abuse, his powerful position.
Topic:
Science and Technology, Economic Competition, Electric Vehicles, Tesla, and Energy Transition
Political Geography:
Global Focus and United States of America

225. Setting Pharmaceutical Drug Prices: What the Medicare Negotiators Need to Know About Innovation and Financialization

Author:
Öner Tulum and William Lazonick
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Mandated by the Inflation Reduction Act of 2022, the U.S. government through the Centers for Medicare and Medicaid Services (CMS) is negotiating with pharmaceutical companies over the “maximum fair price” of ten drugs in wide use by Medicare patients. Over the next few years, the number of drugs whose prices are subject to negotiations will increase. The pharmaceutical companies contend that a “fair” price would be a “value-based price” that enables the companies’ shareholders to capture the value that the drug creates for society. Invoking the dominant “maximizing shareholder value” ideology, the argument for value-based pricing assumes that it is only a pharmaceutical company’s shareholders who make the risky investments that fund drug innovation. Pharmaceutical executives and their lobbyists warn that a lowering of drug prices will reduce investments in new drugs. The purpose of this paper is to enable CMS negotiators to respond to these arguments by showing a) why drug-price regulation is required, given the relation between scale economies in supplying drugs and price inelasticity of drug demand; b) how the pharmaceutical companies with which they are negotiating prices are, in general, not using their profits from unregulated drug prices to fund drug innovation but rather to fund distributions to shareholders in the form of cash dividends and stock buybacks; c) that publicly listed pharmaceutical companies do not typically rely upon investment by shareholders to fund drug innovation; and d) that investment in drug innovation entails “collective and cumulative learning” in foundational and translational research that is both antecedent and external to the investments in clinical research that a pharmaceutical company may make to bring a safe and effective drug to market.
Topic:
Economics, Health, Finance, Innovation, Pharmaceuticals, and Medicare
Political Geography:
North America and United States of America

226. Good Policy or Good Luck? Why Inflation Fell Without a Recession

Author:
Thomas Ferguson and Servaas Storm
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes claims that the Federal Reserve is principally responsible for the decline of inflation in the U.S. We compare several different quantitative approaches. These show that at most the Fed could plausibly claim credit for somewhere between twenty and forty percent of the decline. The paper then examines claims by central bankers and their supporters that a steadfast Fed commitment to keeping inflationary expectations anchored played a key role in the process. The paper shows that it did not. The Fed’s own surveys show that low-income Americans did not believe assurances from the Fed or anyone else that inflation was anchored. Instead, what does explain much of the decline is the simple fact that most workers nowadays cannot protect themselves by bargaining for higher wages. The paper then takes up the obvious question of why steep rises in interest rates have not so far led to big rises in unemployment. We show that recent arguments by Benigno and Eggertson that shifts in vacancy rates can explain this are inconsistent with the evidence. The biggest factor in accounting for the strength in the economy is the continuing importance of the wealth effect in sustaining consumption by the affluent. This arises, as we have emphasized in several papers, from the Fed’s quantitative easing policies. Absent sharp declines in wealth, the continuing importance of this factor is likely to feed service sector inflation in particular.
Topic:
Economics, Monetary Policy, Federal Reserve, Inflation, and Macroeconomics
Political Geography:
North America and United States of America

227. Grand Strategy: Shield of the republic

Author:
Christopher McCallion
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
Grand strategy is a state’s theory about how to provide for its own security. Leaders must decide how to best translate scarce means into political objectives. Limited resources and the high stakes of national survival force leaders to prioritize. Military power is dependent on wealth, industry, geographical endowments, population size, and effective domestic institutions. The various conditions in which states find themselves help motivate and constrain the grand strategy formulated by their leaders. The United States is still the most powerful, secure, and prosperous country in the world, with a favorable geographic position and many internal advantages. U.S. grand strategy has historically been concerned with preventing the rise of a regional hegemon in Eurasia by maintaining the balance of power. With the collapse of the Soviet Union, the United States became the only great power in the world. Unfortunately, it squandered the “unipolar moment” by pursuing a costly and counterproductive grand strategy of “liberal hegemony,” which has left it overextended. The United States’ secure geostrategic position and the improbability of a Eurasian hegemon allows it to adopt a grand strategy of restraint. This shift will help the United States to preserve its power, minimize risks, and adapt to the rise of new great powers. This strategy requires the United States to adopt a more rigorous definition of its vital interests and to shift to its allies the main burden of defending themselves.
Topic:
Security, Defense Policy, Geopolitics, Grand Strategy, and Unipolarity
Political Geography:
North America and United States of America

228. Grand Strategy: The Balance of Power

Author:
Christopher McCallion
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
The “balance of power” refers to the distribution of capabilities among states, as well as a possible equilibrium between them. A state’s military power is based on several factors, especially its economy and population. To survive in an anarchic world, states “balance” against rivals that threaten to become overwhelmingly powerful. This can include “internal balancing,” by which states build up their own capabilities, and “external balancing,” where states form alliances. Primacists and restrainers disagree about the balance of power. Primacists believe global hegemony is optimal and stable. Restrainers believe the pursuit of global hegemony is quixotic and self-defeating, leading to overextension and provoking counterbalancing by other powers. The United States is extremely powerful and secure thanks to its economy, geography, population, and military, among other factors. The prospect of a potential Eurasian hegemon emerging is remote. China is a formidable great power that warrants attention, but its geography makes expansion difficult, and it can be counterbalanced principally by other states in East Asia. A rough balance of power exists in both Europe and the Middle East, and therefore there’s no potential hegemon on the horizon in either region. The United States’ pursuit of primacy discourages allies from providing for their own defense to balance against threats, while uniting adversaries seeking to counterbalance the United States. The United States should instead encourage its capable allies to take responsibility for their own defense while seeking to keep its competitors divided through prudent diplomacy.
Topic:
Defense Policy, Diplomacy, Grand Strategy, and Balance of Power
Political Geography:
North America and United States of America

229. Challenges to Chinese blue-water operations

Author:
Mike Sweeney
Publication Date:
04-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
Despite having the world’s largest navy, important questions can be asked about China’s ability to challenge the U.S. Navy on a global scale. A number of factors—geography, logistical infrastructure, force structure, and command culture—all argue that China cannot do so at this time. In particular, China would need to significantly expand the number and caliber of its overseas bases in order to support large-scale, blue-water operations by the People’s Liberation Army Navy (PLAN). China currently has just two overseas bases—at Djibouti and Cambodia—and both are of limited capacity. Absent such a basing network, the PLAN is reliant on at-sea replenishment, a capability that is inherently vulnerable in wartime. China possesses some quality at-sea replenishment vessels but not nearly in sufficient quantities to support widespread global operations. While Chinese naval aviation has shown important improvements over the last year, the PLAN does not appear to have the logistical capacity to sustain high-tempo carrier operations outside the First Island Chain for an extended period of time. Super-quiet Chinese nuclear submarines would be game-changers in terms of Chinese blue-water operations. But thus far China has not shown mastery of the requisite technologies to build boats with this capability. It would also take China several years to grow a fleet of super-quiet submarines once the necessary technological challenges have been solved. Structural issues with the Chinese economy raise new concerns about Beijing’s ability to fund a blue-water navy over the long term. Such calculations must include the expense of ship construction, but also the massive operations and maintenance budget needed to deploy a potential navy of over 400 ships.
Topic:
Defense Policy, Armed Forces, Navy, Economy, and Submarines
Political Geography:
China, Asia, North America, and United States of America

230. Grand Strategy: Geography

Author:
Christopher McCallion
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
Geographic distance and the current state of military technology interact to favor defense while diminishing the threat of conquest. The stopping power of water in particular obstructs the ability of even the most powerful states to project power overseas. Proximate land powers are the most likely to engage in security competition and conflict, while distant or sea powers are relatively isolated from potential adversaries. This strategic insularity is even greater if a state has a large and diversified economy and the resources to be relatively self-sufficient. The United States is separated from other great powers by thousands of miles of ocean to both its east and west, and is the most powerful, prosperous, and secure state in the world. However, many of the same conditions which make the United States secure also make it difficult to project power, carry out wars far abroad, and maintain military primacy on land in Eurasia. The United States should both embrace its abundance of security and accept the limits to its offensive power, using its position as a continent-sized maritime power to act as an offshore balancer rather than a hegemon on the flanks of the Eurasian landmass.
Topic:
Security, Grand Strategy, Geography, and Balance of Power
Political Geography:
North America and United States of America

231. No silver bullet: Aid is not a shortcut to victory for Ukraine

Author:
Michael DiMino
Publication Date:
06-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
Delayed or insufficient Western aid is often blamed for Ukraine’s lack of success on the battlefield. The truth is more complicated. There is no aid “silver bullet” for what ails Ukraine’s war effort. More aid alone is unlikely to make a decisive difference in the outcome of the war, especially if Ukraine’s structural disadvantages and strategic deficiencies remain unaddressed. More aid is unlikely to fundamentally change the conflict because Ukraine lacks the manpower necessary to use it to generate enough new combat power to retake lost territory. Moreover, the West does not currently possess the industrial capacity needed to fulsomely sustain an indefinite Ukrainian war effort. Russian adaptability and battlefield innovation have successfully blunted the effectiveness of several Western weapon systems. And Ukrainian doctrine and tactics remain suboptimal even in the third year of the war, meaning Kyiv has failed to employ the aid it does receive with maximal effectiveness. Neither Washington nor Kyiv has articulated a clear theory of victory for Ukraine. Western aid was always a stopgap to buy Ukraine time, not a regime-change project to bring about the dissolution of the Russian state. Instead of continuing to placate maximalist fantasies of total victory, the U.S. should advocate for a shift to a defensive strategy and openness to a negotiated settlement that ends the war, such that a sovereign and independent Ukrainian state can be preserved in the face of fighting to collapse.
Topic:
Weapons, Military Aid, and Russia-Ukraine War
Political Geography:
Russia, Europe, Eurasia, Ukraine, and United States of America

232. A new NATO agenda: Less U.S., less dependency

Author:
Benjamin Friedman
Publication Date:
07-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
The United States should aggressively reduce its force presence in Europe. This would be consistent with NATO’s original balancing purpose and U.S. expectations then that garrisoning Europe was a temporary expedient, not a permanent tool of U.S. dominance. The Russian threat, despite being energized by NATO expansion, is insufficient to demand the current defense effort devoted to it in Europe, whether it’s Americans or Europeans making that effort. The results of Russia’s invasion of Ukraine underline this happy point: Russia has proven weaker than conventional wisdom held, and the advantages of defense evident in the war bode well for the territorial status quo NATO defends in Europe. A U.S. drawdown in Europe is unlikely to spark a European defense renaissance, but even so, the balance of power in Europe will remain intact, and the United States will be better off with the freed-up resources and reduced risks.
Topic:
Defense Policy, NATO, Russia-Ukraine War, Dependency, Balance of Power, and Burden Sharing
Political Geography:
Russia, Europe, North America, and United States of America

233. Grand strategy: Alliances

Author:
Christopher McCallion
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
Alliances are usually temporary arrangements among states to counter—or “balance” against—a specific common threat. The United States’ Cold War alliances, by contrast, have become seemingly permanent. States tend to balance power when they face a major threat. Bandwagoning, by contrast, is a particularly poor option for states with the capability to put up a fight. When threatened, states tend to join forces in alliances rather than surrender their national survival to the whims of a more powerful aggressor. Alliances, however, entail costs and risks. These include the dangers of being drawn into war through entanglement and entrapment, the deleterious effect on deterrence by allies that neglect their defense by “free-riding,” and the moral hazard produced by enabling allies to act like “reckless drivers.” Over time, the United States has shifted from a deep skepticism of “entangling alliances” to a global network of security dependents that are treated as an end in themselves, rather than a means to an end. This posture has left the United States overextended, while encouraging allies to neglect their own capabilities and preparedness. The United States can and should significantly reduce its alliance commitments, particularly in Europe and the Middle East, where threats to the U.S. are remote and local powers can balance adversaries. In Asia, the United States should act as a backstop to the regional balance of power rather than a vanguard.
Topic:
Foreign Policy, NATO, Grand Strategy, Alliance, Balance of Power, and Burden Sharing
Political Geography:
Europe, North America, and United States of America

234. Rethinking Africa Command

Author:
Mike Sweeney
Publication Date:
10-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
As debate grows over U.S. policy towards Africa, consideration should be given to altering the continent’s status under the Department of Defense’s Unified Command Plan (UCP). Eliminating Africa Command (AFRICOM) under the UCP would both signify a policy shift away from a counterterrorism focus and ease the process of implementing that change within the policymaking bureaucracy. Establishing a three-star subcommand, nested under European Command (EUCOM), would still allow the United States to use force in Africa, when necessary, but would reduce the prominence of military power in U.S. policy toward the continent. AFRICOM and EUCOM essentially share much of their force structure; this unique relationship would facilitate the transition to the proposed three-star subcommand. Altering the U.S. military footprint in Africa should also be considered in the context of any changes to policy and command arrangements. Making specific recommendations at this time is complicated by the opaqueness of the current footprint.
Topic:
Foreign Policy, Defense Policy, Armed Forces, Counter-terrorism, Africa Command (AFRICOM), and European Command (EUCOM)
Political Geography:
Africa, North America, and United States of America

235. A defensive approach to Ukraine military aid

Author:
Jennifer Kavanagh
Publication Date:
11-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
The next administration is likely to continue U.S. military aid to Ukraine to some degree, yet thus far decisions about what aid to provide have been reactive and not connected to any strategy. The United States should use its military aid to push Ukraine to adopt a defensive strategy that will be more sustainable for the Ukrainians given manpower shortfalls and more responsible and fiscally feasible for the United States, while also reducing the risk of Russian escalation. This would be in line with America’s priorities in Ukraine, including preventing a Russian victory and preserving a sovereign Ukraine at lowest possible cost and without direct involvement in the war. This strategy would also put Ukraine in a good position for a settlement that trades some land for a ceasefire and supports Ukraine’s longer-term defense. A Ukraine aid framework centered on a defensive strategy would see the U.S. provide air defense, anti-tank mines, the material and equipment to build fortifications, short-range artillery and limited short-range missile variants, small uncrewed aerial systems, and some armored vehicles for transport. In many cases, however, quantities would be limited by the needs of U.S. forces or other U.S. partners. The U.S. would not provide most types of aircraft, long-range missiles, tanks, or other weapon systems that are primarily offensive in nature and could cross a redline for Vladimir Putin.
Topic:
Defense Policy, Weapons, Military Aid, and Russia-Ukraine War
Political Geography:
Russia, Europe, Eurasia, Ukraine, and United States of America

236. The Practice, Promise and Peril of EU Lawfare

Author:
Steven Blockmans
Publication Date:
05-2024
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Power generates law and its interpretation, irrespective of whether it serves the cause of international justice. Despite its many shortcomings, the rules-based international order (RBIO) tries to advance that cause. But as a concept, the RBIO is now being rejected by China, Russia and parts of the so-called “Global South” for what they claim is the Western hegemonism and liberal values that underpin it. The fact that these countries have voluntarily signed up to the international covenants that enshrine the legal doctrines to strengthen the sovereign rights of weaker countries, especially in the context of economic relations, makes it hard to sympathise with the argument that the RBIO should be replaced by another concept, especially one that is advanced by autocracies. The RBIO has been partially shaped by the European Union (EU), a community of law that encodes the aspiration of “good global governance” in its constitutional DNA. With the waning “Brussels effect”—the soft power of EU law in shaping international rules and standards, the EU should consider how to instrumentalise the law to protect and promote its foreign policy interests, first and foremost the protection and promotion of the RBIO. This report unpacks the notion of “lawfare” and conducts a comparative analysis of such practices by the US, China, Russia, Ukraine, Turkey and others to assess the promise and peril of the EU using the power of the law to its strategic advantage.
Topic:
International Law, Sanctions, European Union, International Order, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, Turkey, Ukraine, and United States of America

237. The Washington Summit: NATO-Ukraine

Author:
Henrik Larsen
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. In the first brief of the series, Henrik Larsen looks at the additional steps NATO might take in Washington to help Ukraine defeat Russia’s aggression. There is seemingly no common appetite to advance Ukraine’s membership status, but the Alliance is likely to take a new role in coordinating the delivery of lethal aid. It may also agree an initiative to secure more stable longer-term financing of military assistance. Even so, it is hard to see that NATO’s support and solidarity represent a genuine commitment to Ukraine’s future security.
Topic:
Security, NATO, Alliance, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and United States of America

238. The Washington Summit: Burden-sharing

Author:
Tony Lawrence
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. In the third brief of the series, Tony Lawrence looks at the perennial question of burden-sharing. The Allies will probably not agree to raise the 2% of GDP spending guideline. But in any case, their focus on this metric hides the real picture of how responsibility for security is shared across the Alliance. The European Allies certainly need to step up in all areas, but they should also consider reframing the burden-sharing discussion.
Topic:
NATO, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

239. Keeping the Americans In

Author:
Rachel Hoff
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. The European Allies will closely watch this year’s US elections, concerned that a second Trump Presidency may have devastating consequences for transatlantic relations. In the sixth brief of the series, Rachel Hoff looks at US rhetoric and attitudes towards NATO. The good news is that polling shows that the majority of Americans are favourable towards NATO and support Article 5. But this support drops if the European Allies fail to meet NATO’s defence spending guidelines. Whoever wins the election in November, Europe will need to pull its weight to keep the US engaged.
Topic:
Defense Policy, NATO, Deterrence, Transatlantic Relations, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

240. Ukraine’s Practical Steps towards NATO

Author:
Maksym Skrypchenko
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. Ukraine recognises that while it is unlikely to be invited to join NATO any time soon, there is much it can do to prepare itself in advance of a formal invitation. In the final brief of the series, Maksym Skrypchenko describes Ukraine’s progress in implementing its defence reform agenda, focusing on its record of adopting NATO standards, and outlines the challenges of doing so in wartime. The continuing support of NATO Allies will be essential to these efforts.
Topic:
Defense Policy, NATO, Reform, Alliance, Deterrence, and Russia-Ukraine War
Political Geography:
Europe, Ukraine, and United States of America