Military expenditure, human development, and peace outcomes: a multiobjective panel data approach for NATO countries

Abstract

Abstract

Introduction Development and peace are fundamental pillars of national stability and long-term security. Revisiting the classic “guns or butter” dilemma, this study examines the trade-offs between military expenditure (ME), human development, and peace outcomes across 27 North Atlantic Treaty Organization (NATO) countries from 2008 to 2016. Methods The study develops a multiobjective analytical framework combining econometric panel data estimation with multiobjective mathematical programming. Military expenditure, the human development index (HDI), and the global peace index (GPI) are jointly analyzed using a Pareto-efficiency approach to identify efficient configurations rather than a single optimal solution. This framework accommodates alternative policy preferences and structural constraints. Results The findings reveal substantial heterogeneity in efficiency performance across NATO countries. While some countries consistently lie on the Pareto frontier, achieving relatively favorable combinations of human development, peace, and defense expenditure, others remain persistently distant from efficient configurations. The analysis also highlights the relevance of structural factors, including income levels, governance quality, technological capacity, and social investment, in shaping peace outcomes when defense expenditure and human development are jointly considered. Discussion The proposed framework provides a quantitative tool for evaluating defense–development–peace trade-offs and supports evidence-based policymaking in security-oriented contexts. By identifying multiple efficient configurations, it offers policymakers greater flexibility to account for national priorities, institutional constraints, and structural conditions when balancing defense spending, human development, and peace.