Designing institutions for global security

The article merges aspects of alliance theory with bargaining theory and mechanism design. Illustrated with a numeric example, it models a within-alliance neutral agency whose purpose it is to propose an efficient level of public good provision for the alliance as a whole and suggests a mechanism by which to overcome incentives for inefficient provision. The article concludes with an extensive discussion for future research needs on alliance mechanism design, e.g., suggesting that a review of the literatures on central bank design and similar institutions might be helpful.