Colluding Victims: A Public Choice Analysis of International Alliances

Analysis of international alliances is often premised on predicted responses by nation states when nation states are assumed to behave as utility-maximising actors. 'Large' allies are exploited by 'small' allies when output is a public good. Empirical analysis of defence expenditures in NATO yields results consistent with the proposition that 'exploitation' increases as alliance output approximates a pure public good. But why would large countries acquiesce? A public choice analysis offers a different perspective. If producers of armaments are rent seeking, are large allies able to capture rent by incurring a disproportionate share of defence expenditure?