Some Reflections on Clubs and Alliances

The persuasive comments by Sandler et al. (1980) make two important points: (1) the applications of collective goods theory to alliances has been improved by shifts to the theory of clubs and impure collective goods and (2) my comments regarding the normative limitations of Pareto efficiency goals (Oppenheimer, 1979: 400-401) involve a technical error. Both of these points are well made but we could usefully consider further aspects of their scope and limitations. (1) Consider the analysis of alliances as suppliers of impure collective goods: ones which exhibit rivalry of consumption (for example, those for which benefits fall off as a function of geography, or jurisdiction). The point in the comment is well taken: It is more accurate to note that alliances are suppliers of both pure and impure collective goods and the mix of the goods supplied is a policy and behavioral variable of potential importance. On the other hand, the models, by themselves, may not get around all my criticisms. For although I focused on the suboptimality of the collective goods analysis, these theorems were not the primary target. One can quickly again apply the major premise of my original article: The models are developed on the assumptions of micro economic rationality (transitive preferences motivating individual choices). But the applications are being made to macro political structures with complex political institutions and processes. The choice

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