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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.

Suggested Citation

  • Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
  • 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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    References listed on IDEAS

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    1. Mark A. Boyer, 1989. "Trading Public Goods in the Western Alliance System," Journal of Conflict Resolution, Peace Science Society (International), vol. 33(4), pages 700-727, December.
    2. Conybeare, John A C & Murdoch, James C & Sandler, Todd, 1994. "Alternative Collective-Goods Models of Military Alliances: Theory and Empirics," Economic Inquiry, Western Economic Association International, vol. 32(4), pages 525-542, October.
    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. Todd Sandler & James C. Murdoch, 1990. "Nash-Cournot or Lindahl Behavior?: An Empirical Test for the NATO Allies," The Quarterly Journal of Economics, Oxford University Press, vol. 105(4), pages 875-894.
    5. Axelrod, Robert & Bennett, D. Scott, 1993. "A Landscape Theory of Aggregation," British Journal of Political Science, Cambridge University Press, vol. 23(02), pages 211-233, April.
    6. Dudley, Leonard M, 1979. "Foreign Aid and the Theory of Alliances," The Review of Economics and Statistics, MIT Press, pages 564-571.
    7. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, December.
    8. 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.
    9. Martin C. McGuire & Carl H. Groth, 1985. "A Method for Identifying the Public Good Allocation Process Within a Group," The Quarterly Journal of Economics, Oxford University Press, vol. 100(Supplemen), pages 915-934.
    10. Kanbur, Ravi & Sandler, Todd & Morrison, Kevin, 1999. "The Future of Development Assistance: Common Pools and International Public Goods," Staff General Research Papers Archive 1629, Iowa State University, Department of Economics.
    11. Khanna, Jyoti, 1993. "Cooperative versus Noncooperative Behavior: The Case of Agricultural Research," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 346-352, May.
    12. John A. C. Conybeare, 1992. "A Portfolio Diversification Model of Alliances," Journal of Conflict Resolution, Peace Science Society (International), vol. 36(1), pages 53-85, March.
    13. Toshihiro Ihori, 2000. "Defense Expenditures and Allied Cooperation," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 854-867, December.
    14. Toshihiro Ihori, 2000. "Defense Expenditures and Allied Cooperation," CIRJE F-Series CIRJE-F-68, CIRJE, Faculty of Economics, University of Tokyo.
    15. John R. Oneal, 1990. "Testing the Theory of Collective Action," Journal of Conflict Resolution, Peace Science Society (International), vol. 34(3), pages 426-448, September.
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    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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