The Supply Side of Security

This chapter presents an overview of the book and discusses puzzles of Post-Cold War alliance politics and problems in the extant literature. The chapter introduces the readers to a market theory of military alliances, which treats alliances as contracts pledging a continuous exchange of goods, at least one of which is a military obligation but the others need not be. The model bases alliance politics in the demand for and supply of various goods – important examples include protection, military bases, and political and economic concessions. States and domestic actors participate in military alliances for various goals, and the common function of all alliances is to generate efficiency gains. With these assumptions, the theory explains how systemic polarity and domestic politics affect intra-alliance bargaining.

This chapter presents a broad theoretical map and explains why military allies exchange various goods among them. The chapter justifies the market approach of this book and explains how the theory is related to the existing literature. The literature is mostly concerned with exchanges of military force, but a narrow focus on capability aggregation leads us to ignore a broad range of functions that military alliances play in international politics. Although combining military capabilities for defense and deterrence is an important part of exchanges between allies, alliances also provide their participants with efficiency gains based on comparative advantage, economies of scale, and informational and institutional effects of diverse exchanges. The market theory of alliances is developed according to the major characteristics of the alliance market.

Polarity affects alliance politics because it is related to the number of potential security-suppliers and to the relative capabilities of actual and potential allies. This chapter develops a systemic theory of military alliances that explains both the persistence of numerous Cold War alliances and the high rate of alliance formation in the post-Cold War era that has taken place without the involvement of or balancing against the United States. This chapter also explains why China's alliance policy has so far been dormant and why it would be more active under Sino-US bipolarity. In the context of alliance politics, the chapter argues, the vice to which great powers easily succumb in a multipolar world is overreaction; in a bipolar world, overextension; in a unipolar world, inattention.

This chapter empirically tests the argument presented in Chapter 3. In addition to intra-alliance bargaining power, it also examines the theory's implications for the patterns of termination, duration, and formation of alliances in different systems. The chapter explains how much the structural shift from bipolarity to unipolarity has pushed American allies in favor of the superpower. The decline in the demand and supply of security in many parts of the world changed not only who forms alliances but also the goods exchanged within such alliances. The final section of this chapter discusses the theoretical implications of the systemic theory and offers some predictions about US alliances in the long and short terms.

This chapter explains the effects of three domestic variables on a state's intra-alliance bargaining power. As the existing theories of international relations argue, the presence of effective domestic opposition to cooperation increases a state's bargaining power in an alliance. The chapter advances our understanding of the domestic sources of bargaining power by further explaining disordinal interaction effects of a leader's attitude toward an alliance and his or her vulnerability. The effects of a leader's attitude and vulnerability vary, depending on the value of each variable; vulnerable pro-cooperation leaders and non-vulnerable anti-cooperation leaders have bargaining advantages in intra-alliance bargaining.

In this chapter, the author conducts a "structured, focused comparison" of the US alliances with Japan, South Korea, and Spain with respect to domestic opposition to alliance cooperation, the leader's attitude toward the alliance, the leader's vulnerability, and intra-alliance bargaining. The case studies explain why a leader matters in intra-alliance bargaining and why it is important to analyze the leader's attitude and vulnerability in combination. The chapter also shows that a state tends to receive less benefit from its alliance as its state resources increase, even though its influence in the alliance tends to grow with its capability. The final section discusses the implications of the findings as well as future research agendas.

This chapter concludes the study by discussing the book's implications for international relations theory and policy of the United States, its East Asian allies and China. In particular, the chapter emphasizes that the rise of China affects both the demand-side and supply-side factors in the alliance market. The distribution of military capabilities in the international system is likely to remain unipolar for the foreseeable future, but many perceive a decline in the US power, especially relative to the rising power of China. This perception of power shift affects both the demand side and the supply side of the alliance market. Moreover, the rise of China and the relative decline of the United States alter the costs and benefits of the alliances for the United States.