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An Econometric Technique for Comparing Median Voter and Oligarchy Choice Models of Collective Action: The Case of the NATO Alliance

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  • Murdoch, James C
  • Sandler, Todd
  • Hansen, Laurna

Abstract

This paper devises an empirical methodology for discriminating between the median voter model and the oligarchy choice model when applied to the collective provision of a public good. In particular, an empirical methodology is engineered so that a nested test procedure can evaluate competing models. The authors apply this methodology to examine the demand for military activities of ten members of the NATO alliance. A two-stage least squares procedure, corrected for autocorrelation, is used to estimate the demand equations. Test results vary: some allies abide by the median voter model, others by the oligarchy model, and still others by neither. Copyright 1991 by MIT Press.

Suggested Citation

  • Murdoch, James C & Sandler, Todd & Hansen, Laurna, 1991. "An Econometric Technique for Comparing Median Voter and Oligarchy Choice Models of Collective Action: The Case of the NATO Alliance," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 624-631, November.
    • Handle: RePEc:tpr:restat:v:73:y:1991:i:4:p:624-31
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    Cited by:

    1. Rupayan Gupta, 2010. "Structuring international institutions for the efficient provisioning of global security," Public Choice, Springer, vol. 144(1), pages 169-197, July.
    2. 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.
    3. 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.
    4. Iglesias Emma M., 2011. "Constrained k-class Estimators in the Presence of Weak Instruments," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 15(4), pages 1-13, September.
    5. Renaud Bellais & Martial Foucault & Jean-Michel Oudot, 2014. "Économie de la défense," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01052607, HAL.
    6. Knobel, Alexander (Кнобель, Александр) & Chokaev, Bekhan (Чокаев, Бекхан) & Mironov, Alexey (Миронов, Алексей), 2015. "Comparative Analysis of the Effectiveness of Public Spending in the Field of National Defense and Law Enforcement [Сравнительный Анализ Эффективности Госрасходов В Сфере Национальной Обороны И Прав," Published Papers mn47, Russian Presidential Academy of National Economy and Public Administration.
    7. Johan Lundberg, 2006. "Spatial interaction model of spillovers from locally provided public services," Regional Studies, Taylor & Francis Journals, vol. 40(6), pages 631-644.
    8. Martial Foucault, 2005. "Biens publics et défense européenne : quel processus d'allocation ?," Cahiers de la Maison des Sciences Economiques j05082, Université Panthéon-Sorbonne (Paris 1).
    9. Todd Sandler, 1993. "The Economic Theory of Alliances," Journal of Conflict Resolution, Peace Science Society (International), vol. 37(3), pages 446-483, September.
    10. Yang Yao, 2004. "Land Tenure Choice in Chinese Villages: The Rational versus the Political Model," Land Economics, University of Wisconsin Press, vol. 80(4).
    11. Shimizu, Hirofumi, 1999. "UN peacekeeping as a public good: analyses of the UN member states' peacekeeping financial contribution behavior," ISU General Staff Papers 1999010108000013434, Iowa State University, Department of Economics.
    12. Binyam Solomon, 2005. "Nato Benefits, Burdens And Borders: Reply," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(4), pages 323-326.
    13. Gupta, Rupayan, 2010. "Changing Threat Perceptions and the Efficient Provisioning of International Security," MPRA Paper 24016, University Library of Munich, Germany.
    14. Binyam Solomon, 2005. "The demand for Canadian defence expenditures," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(3), pages 171-189.
    15. James C. Murdoch & Morteza Rahmatian & Mark A. Thayer, 1993. "A Spatially Autoregressive Median Voter Model of Recreation Expenditures," Public Finance Review, , vol. 21(3), pages 334-350, July.
    16. Tanner, Thomas Cole, 1994. "The spatial theory of elections: an analysis of voters' predictive dimensions and recovery of the underlying issue space," ISU General Staff Papers 1994010108000018174, Iowa State University, Department of Economics.

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