The effect of alliance membership on national defense burdens, 1953–88: A test of Mancur Olson's theory of collective action

Olson and Zeckhauser (1966) offered the first theoretical explanation for variation in the defense burdens of allies. Since then, the theory of collective action (Olson, 1971 [1965]) has been extensively tested using the North Atlantic Treaty Organization (NATO) and the Warsaw Pact (WTO). While most studies indicate that allied defense burdens (the ratio of military expenditures to gross domestic product) are correlated with economic size, this relationship has rarely been assessed for non‐allied states. Here we examine the association between national defense burdens and economic size, 1953–1988, for NATO, the WTO, the Rio Pact, and the Arab Collective Security Pact in a nested test using most of the non‐allied nations of the world as a control group. Our results generally support the theory. NATO and the Warsaw Pact consistently conform to theoretical expectations, and evidence regarding the Rio Pact, on balance, is positive. Defense burdens are not correlated with economic size within the Arab Pact, however. In addition, nations’ defense burdens are affected by the external threat, as indicated by arms races and war; but the effect of involvement in war is surprisingly small.