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Mutual Defense Agreements are pacts between countries to defend one another in case of an external attack. These agreements create a sense of security among the citizens of the member states.
There is no fear of sudden invasion or collapse, so the governments of those states tend to be more confident and this confidence trickles down to citizens. Citizens are in the Peltzman effect, which means people tend to take more risks in their lives when they feel safe and secure. These are the kind of risks that are necessary for growth and progress.
People feel that their nation is strong, protected and respected and this can raise their self-esteem. People are not in a survival mode on a daily basis, so they can focus on education, science and innovation and that raises their intelligence. Individuals tend to enjoy a more emotionally stable life and this boosts their creativity.
Although these effects are not felt in exactly the same way by every single citizen, in a general sense, these kinds of agreements have positive effects on the lives and emotional well-being of citizens of the member states.