An Economic Theory of Alliances

Abstract

This article outlines a model that attempts to explain the workigns of international organizations, and tests this model against the experience of some existing international institutions. Though the model is relevant to any international organization that independent nations establish to further their common interest, this article emphasizes the North Atlantic Treaty Organization, since it involves larger amounts of resources than any other internaitonal organization, yet illustrates the model most simply. The United Naions and the provision of foreign aid through the Development Assistance Committee are discussed more briefly.