ABSTRACT
The recent admittance of the Czech Republic, Hungary, and Poland into NATO in March 1999 prior to its fiftieth anniversary raises questions as to how many other Partnership for Peace (PFP) nations will eventually become members. In particular, will future entrants include the Baltic states (Estonia, Latvia, and Lithuania), Slovakia, Slovenia, Austria, Switzerland, or Romania? Thus far, the debate about expansion has centered on the associated costs, with estimates ranging from $2 billion (NATO 1995) to $125 billion, depending on alternative assumptions, time horizons, and expansion costs definitions.1 Although benefits from expansion are briefly mentioned, the current focus on costs implicitly assumes that expansion benefits always outweigh expansion costs and that these benefits do not differ among alternative expansion scenarios. Neither of these implicit assumptions is defendable. The expansion issue is related to alliance formation (i.e. an expansion from zero allies), which hinges on whether prospective allies view their membership as providing a net gain after associated costs are covered. These net gains are dependent on alliance size and composition, which can affect benefits (e.g. cost reductions, enhanced deterrence) and costs (e.g. decision making, joint maneuvers).
