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Economics of Alliances: The Lessons for Collective Action

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  • Keith Hartley
  • Todd Sandler

Abstract

This essay provides an up-to-date summary of the findings of the literature on the economics of alliances. We show that the study of the economics of alliances has played a pivotal role in understanding and applying public good analysis to real-world applications. We establish that the manner in which alliances address burden sharing and allocative issues is related to strategic doctrines, weapon technology, perceived threats, and membership composition. Past contributions are evaluated, and areas needing further development are identified. The theoretical and empirical knowledge gained from the study of alliances is shown to be directly applicable to a wide range of international collectives.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jel.39.3.869
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 39 (2001)
Issue (Month): 3 (September)
Pages: 869-896

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Handle: RePEc:aea:jeclit:v:39:y:2001:i:3:p:869-896

Note: DOI: 10.1257/jel.39.3.869
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  1. Khanna, Jyoti, 1993. "Cooperative versus Noncooperative Behavior: The Case of Agricultural Research," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 346-52, May.
  2. Kanbur, Ravi & Sandler, Todd & Morrison, Kevin, 1999. "The Future of Development Assistance: Common Pools and International Public Goods," Staff General Research Papers 1629, Iowa State University, Department of Economics.
  3. Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
  4. Toshihiro Ihori, 2000. "Defense Expenditures and Allied Cooperation," CIRJE F-Series CIRJE-F-68, CIRJE, Faculty of Economics, University of Tokyo.
  5. John A Conbeare & James C Murdoch & Todd Sandler, 2001. "Alternative Collective-Goods Models of Military Alliances: Theory and Empirics," Levine's Working Paper Archive 563824000000000102, David K. Levine.
  6. Wong, K-Y., 1988. "Foreign Trade, Military Alliance, And Defence-Burden Sharing," Discussion Papers in Economics at the University of Washington 88-11, Department of Economics at the University of Washington.
  7. Sandler, Todd & Murdoch, James C, 1990. "Nash-Cournot or Lindahl Behavior? An Empirical Test for the NATO Allies," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 875-94, November.
  8. Dudley, Leonard M, 1979. "Foreign Aid and the Theory of Alliances," The Review of Economics and Statistics, MIT Press, vol. 61(4), pages 564-71, November.
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