Asymmetric Burden-Sharing and
the Restraining and Deterrence Effects of Alliances
How does burden-sharing among alliance partners influence the likelihood that the status quo will be preserved? Does alliance formation enable allies to aggrandize their military capabilities or allow some members to free-ride on other members' efforts? Can states forge an alliance without threatening the security of non-signatories? To address these questions, I employ a three-player game-theoretic model, which incorporates the process of arms buildup and alliance formation into a crisis bargaining model, and identify the conditions under which defensive alliances can help states preserve the status quo. I find that alliance burden-sharing may exert the deterrence and restraining effects, although at most one effect is observable at a time. If a prospective ally is a potential revisionist and its opportunity cost of arms buildup is relatively low, then it will not forge an alliance and instead strengthen its military capabilities to elicit concessions from an opponent. To prevent this, a status-quo oriented superpower may offer an alliance even by shouldering a disproportionately heavy burden. Asymmetric burden-sharing will allow the superpower to reduce the revisionist ally's peacetime defense cost and curtail its incentives to overturn the status quo by strengthening the military (the restraining effect). In this case, alliance formation does not menace the security of non-signatories, and therefore, it can preserve peace even if one ally harbors revisionist aims. Conversely, if a prospective ally's opportunity cost of arms buildup is relatively high, it cannot build up sufficiently large military capabilities to protect itself against a stronger opponent. By forming an alliance with this ally, the superpower attempts to deter the opponent from extracting concessions from the ally (the deterrence effect). To prevent being exploited by this ally, however, the superpower provides only the units of armed forces that suffice to incentivize the ally to strengthen its own military capabilities to counter the opponent. Alliance formation entails power aggrandizement when it does not threaten the security of an opponent and when the superpower agrees to assist the ally to expand military capabilities.