More money, more security? Norwegian Defense spending and the need to rethink the tempo of rearmament

While the Norwegian defense budget continues to grow at breakneck speed, the relationship between increased spending and national and societal security remains uncertain – and insufficiently discussed.

Introduction

In a recent press statement, announcing that it will invest 5 % of GDP in strengthening Norway’s defense capability, the government explained that ‘The world has become more dangerous and more unpredictable. Europe must shoulder greater responsibility for its own security. We must do more to keep our country secure and safe, and to contribute to our collective security together with our Allies in NATO, The Norwegian Defense Pledge foresees raising spending on the military to an unprecedented (minimum) two percent of GDP. In the proposed national budget for 2026, the government suggests a further increase of 4.2 billion kroner, to nearly 180 billion in total. We ask: Does this type and scale of rapid financial investment result in tangible increases in national – and societal – security, or is there a risk of investing mostly in the optics of safety?

In this commentary, we argue that the scale and speed of investment increases the likelihood that  resources now allocated to defense will end up in measures with low efficiency. According to principal-agent theory, when the objective shifts from achieving outcomes to merely meeting spending targets, incentives to allocate resources efficiently become weaker. By allocating ‘enough’ money to defense, the Norwegian government signals to NATO and its major allies that we take our own national defense seriously, and that we carry our weight and contribute to the alliance's defense capability.

Symbolically and politically, percentages are important. However, we are concerned that the intensive political focus on percentages displaces more instrumental means-to-an-end considerations of what the money actually achieves. At the same time, in Norway, the public debate about defense procurement remains almost non-existent: economic perspectives receive little attention, and the discussion is often reduced to technical details while (civilian) critical inquiry into the fundamental priorities and discussions of tradeoffs are missing.

Spending as policy problem

The point of departure for our concern is basic. Every krone that goes to military purposes is a krone less for health, education, green transition, or civil preparedness. There is a surprising lack of curiosity and engagement with the rise of the national consensus underpinning this political priority, and no attempts at systematically analyzing tradeoffs. What is the cost of investing in defense compared to the achievement of welfare goals?

As defense budgets expand, the opportunity cost rises at the margin, because additional military spending competes with increasingly valuable alternative uses in welfare, infrastructure, and societal resilience. At the same time, the marginal effectiveness of military spending declines. While initial increases in defense expenditure may produce substantial gains in capability, additional outlays beyond a certain threshold yield progressively smaller improvements in security outcomes. When the political goal is to reach a percentage target rather than targeting (and evaluating) investments that actually increase security the most, we risk spending resources on projects with low relevance, combined with a risk of function creep in terms of what may be labeled a ‘defense activity.’

A dominant attribute of large defense procurements is slowness: good (and bad) acquisitions require time for planning, specifying, sourcing, procuring, delivering, and operationalizing products and services. We know little about the future landscape of threat in 2035, but we are already committing to investments of several hundred billion. While there is always a risk of buying yesterday’s solutions at tomorrow’s prices, this risk is exacerbated in the current spending climate.

Rapid investments create bottlenecks while increasing prices. When several countries rapidly increase their defense budgets simultaneously, they all contribute to increased global demand for military equipment. A capital-intensive supply side will need time to adapt to a new marked equilibrium, giving room for substantial bottlenecks and further increases in the price of weapons and technology. The result may be that the defense industry wins the jackpot, while NATO spends more money than necessary on an arms race.

Defense spending and security: some concerns

We note that a growing share of allocations in the 2026 Norwegian national budget is framed as contributing to national resilience, safety, and security. Investments in health services, industrial capacity, and energy infrastructure can, under certain conditions, be argued to strengthen overall defense capability.

Special interest and rent-seeking through reclassification A rapid expansion of security-related spending raises concerns about vulnerability to interest group influence. Norway’s relatively weak regulatory framework for regulating lobbying, combined with limited transparency regarding interactions between political decision-makers, civil servants, and private sector actors, increases the risk of special interest influencing defense policy in their favor. In such a context, organized interests may strategically reclassify their preferred initiatives as “security-relevant” to access public resources or favorable regulation, even where the societal return is uncertain.

The costs of entanglement The potential cost of designating certain infrastructures and industries as essential to national security, are exemplified by the classification of the oil and gas industry as protected critical infrastructure. Gas supplies to Europe have large strategic and geopolitical importance. Significant investments have been made in advanced systems to handle both cyberattacks and geopolitical pressure. From the perspective of the Norwegian state, this focus on critical infrastructure and investment strengthens the political, and financial linkages between government and the oil and gas industry. This deepening entanglement between the petroleum industry and the government and Norwegian national security considerations risks marginalizing and displacing urgent discussions about climate adaptation and transition.

The problem of speed more focused discussion on the tempo of rearmament and alternative approaches to realizing the Defense Pledge. One promising starting point would be to consider separating the pace of defense budgeting from that of procurement. This distinction could make it easier to balance fiscal responsibility with strategic foresight. For example, Norway could establish a dedicated defense fund through which the required two percent of GDP is allocated immediately, thus meeting NATO’s spending target. The funds would remain earmarked for defense and could be managed in cooperation with other NATO members to underline allied solidarity. Actual spending, however, could be phased in gradually over ten years. Such an approach would enable more careful project selection, help avoid industrial and administrative bottlenecks and reduce inflationary pressures in the defense sector.

Moving forward

This blog is part of a broader call for more vigorous debate. As 2025 draws to a close, and more than a year into the implementation of the Norwegian Defense Pledge, the public conversation about the relationship between militarization, security, and economic costs is fragmented and lacking in energy. We need more brainstorming by civilian academics, intellectuals, pundits and policymakers. As academics and researchers, we cannot afford to look away—not now when the terms of our future security are being defined.

• This blog is an adapted translation of the Klassekampen Op-ed  ‘Jo mer penger, jo mer trygghet’
• Read more about the initiative Critical Thinking on Peace (CRITPEACE)

The authors

• Ole Andreas Engen (Professor of Societal Safety, University of Stavanger)
• Ole Kvadsheim (PhD candidate in Economics, University of Stavanger)
• Kristin Bergtora Sandvik (Professor at the Department of Criminology and Sociology of Law, University of Oslo and Research Professor at PRIO)