The thesis analyzes the progress of the North Atlantic Treaty Organization s Smart Defense initiative. The venture is analyzed in a wider context of post-Cold War capability ventures in NATO. Smart Defense represents the last in a line of such initiatives. The most notable among these are the Defense Capabilities Initiatives (DCI) and the Prague Capabilities Commitment (PCC). The initiatives had similar goals of bolstering or reforming NATO s conventional military capabilities. This thesis will assess the causes of shortcomings in past attempts, and this history is an integral part of the comparative approach where the past process may speak to the progress of Smart Defense. The lessons deriving from past experience is at the core of social sciences, where there have been several large-scale attempt of restructuring on order to counter security threats. The history of these initiatives could help provide a better understanding of the progress of the Smart Defense initiative in NATO. This thesis will apply the concept of the free-rider problem and organizational theory with Christensen et al. perspectives on organizations to explain state behavior with regards to alliance capability endeavors.