Since before his first run for president in 2016, Donald Trump has repeatedly criticized NATO and called for its member states to contribute more resources towards their own defense. Lee Cronk writes that NATO is an example of a public good and a well-designed risk pool, which explains why it has been so successful in deterring attacks on its members for more than 75 years. He argues that, as an effective risk pool, NATO deserves the full support of all its members, including the United States. 

The North Atlantic Treaty Organization (NATO) was founded in 1949 to deter an attack by the Soviet Union. It worked: Neither the Soviet Union nor any other nation has ever attacked a NATO member within NATO’s agreed-upon jurisdiction of North America, Europe, Türkiye, and the North Atlantic north of the Tropic of Cancer. Despite that success, NATO has been criticized in recent years, particularly by US President Donald Trump. Trump has claimed that NATO is obsolete and has complained about relatively low defense expenditures by many of its European members. During the 2024 presidential campaign, he said that, under his watch, the US would not fulfil its obligations to NATO and would leave low-paying countries to defend themselves should they be attacked. He even went so far as to say that he would encourage Russia to “do whatever the hell they want” to low-paying NATO members. Trump’s rhetoric has not gone unnoticed in Europe, where it has inspired recent efforts to increase defense expenditures.

NATO as a public good and risk pooling

Trump clearly views the defense and deterrence provided by NATO as a public good, and he is not wrong about that. Public goods have two key characteristics. First, they have low rivalry: one person’s consumption of them does little to diminish anyone else’s ability to consume them. Second, they have difficult excludability, meaning that it is hard to prevent those who have not contributed to their creation from consuming them, anyway. In other words, it is hard to prevent free riders. However, while NATO does create a public good, that is not its whole story. We should also recognize that NATO is a risk pool, and a well-designed one, at that.

Risk pools are common around the world, particularly in small-scale societies without access to commercial insurance. Risk pooling originated among our ancestors, and works like this: everyone who is able to forage does so, feeding themselves on the way, but also bringing back any surplus to feed those who were too ill, injured, old, young, or encumbered by young children to forage. This created breathing room for many subsequent evolutionary innovations, such as cooperative childcare, higher birth rates, and a division of labor.

“President Trump Attends the NATO Plenary” (Public Domain) by The Trump White House Archived

The domestication of plants and animals largely eliminated the need for central place food sharing, but it did not eliminate the need for risk pooling. Instead, it led to the creation of risk pools that work on larger scales of both time and place. For example, Maasai pastoralists in East Africa have a system of risk pooling that they refer to by their word for umbilical cord: osotua. Osotua partners agree to help each other if they find themselves in need due to such things as droughts, livestock diseases, and theft.

Design principles for risk pooling systems 

Together with my collaborators in The Human Generosity Project, I have been studying risk pooling for about twenty years. We recently distilled what we and others have learned about it into seven design principles for risk pooling systems. Here it is, fleshed out with details about the osotua system and an assessment of whether NATO is a well-designed risk pool:

NATO’s adherence to this list of design principles helps explain why it has been so successful in deterring attacks on its members. It also provides yet another reason why NATO deserves the full support of all its members, including the United States.

It is Article 5 of NATO’s founding treaty that stipulates that an attack on any one member will be treated as an attack on all of them. Donald Trump and other critics of NATO, particularly American ones, should note that Article 5 has been invoked only once, and it was in defense not of any of NATO’s European members but of the United States. That was after the terrorist attacks on the United States on September 11, 2001. In the war in Afghanistan that followed those attacks, soldiers from fifteen nations other than the US that were NATO members in 2001 lost their lives. Soldiers from an additional eleven nations that subsequently became NATO members also lost their lives there. When the United States was threatened, NATO’s other members lived up to their treaty obligations. Should any of NATO’s other members be threatened in the future, the United States must do the same.

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• Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor the London School of Economics.