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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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    5. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, September.
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    Cited by:

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    2. 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..
    3. Dasgupta, Indraneel, 2024. "A Rent-Seeking Perspective on Imperial Peace," IZA Discussion Papers 17312, Institute of Labor Economics (IZA).
    4. Bakshi, Dripto & Dasgupta, Indraneel, 2022. "Can extremism reduce conflict?," Economics Letters, Elsevier, vol. 215(C).
    5. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2018. "Public goods and public bads," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(4), pages 525-540, August.
    6. 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.
    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.
    8. Rupayan Gupta, 2014. "Changing threat perceptions and the efficient provisioning of international security," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1312-1341, November.
    9. Todd Sandler, 2000. "Economic Analysis of Conflict," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 723-729, December.

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