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Defense Expenditures and Allied Cooperation

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  • Toshihiro Ihori

    (Faculty of Economics, University of Tokyo)

Abstract

This paper investigates the implications of cooperative and non-cooperative defense spending of allied countries in conflicting blocs using static and leader-follower game models. It is well known that in the three-country world with two allies and an adversary all countries may be worse off when the allies cooperate than when they do not. We show that when the number of countries in each separate bloc is large, the countries in one bloc may be better off by cooperating than not even if the negative spillover from the adversarial bloc is large. Furthermore, cooperative behavior in a leader-follower game by the leader bloc can attain a better outcome than non-cooperation.

Suggested Citation

  • Toshihiro Ihori, 2000. "Defense Expenditures and Allied Cooperation," CIRJE F-Series CIRJE-F-68, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2000cf68
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    References listed on IDEAS

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    1. Sandler, Todd, 1977. "Impurity of Defense: An Application to the Economics of Alliances," Kyklos, Wiley Blackwell, vol. 30(3), pages 443-460.
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    6. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287.
    7. Ihori, Toshiro, 1992. "International transfers and defense expenditures in allied and adversarial relationship: Japan and the United States," Japan and the World Economy, Elsevier, vol. 4(2), pages 89-101, September.
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    Cited by:

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    4. Dripto Bakshi & Indraneel Dasgupta, 2021. "A Subscription vs. Appropriation Framework for Natural Resource Conflicts," World Scientific Book Chapters, in: Anil Markandya & Dirk Rübbelke (ed.), CLIMATE AND DEVELOPMENT, chapter 9, pages 257-307, World Scientific Publishing Co. Pte. Ltd..
    5. Hubert Kempf & Grégoire Rota Graziosi, 2010. "Leadership in Public Good Provision: A Timing Game Perspective," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 763-787, August.
    6. Grégoire Rota-Graziosi & Hubert Kempf, 2011. "Leadership in Public Good Provision: a Timing Game Perspective," CERDI Working papers halshs-00556944, HAL.
    7. Jomana Amara, 2008. "Nato Defense Expenditures: Common Goals Or Diverging Interests? A Structural Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(6), pages 449-469.
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