Disproportionality and Exclusion: Reconsidering the Theory of Alliances

Disproportionality of burden sharing in military alliances has been in the focus of economic analyses since decades. However, nearly all findings rest on the assumption that the contracting parties do not have the possibility to exclude the allies from military spill-overs. In contrast, this paper argues that in alliances partial exclusion is nonetheless possible. It can be shown that the consideration of potential exclusion has a strong impact on the theoretical results on burden sharing and the implied disproportionality.