An Econometric Technique for Comparing Median Voter and Oligarchy Choice Models of Collective Action: The Case of the NATO Alliance

James Murdoch (), Todd Sandler and Laurna Hansen

The Review of Economics and Statistics, 1991, vol. 73, issue 4, 624-31

Abstract: This paper devises an empirical methodology for discriminating between the median voter model and the oligarchy choice model when applied to the collective provision of a public good. In particular, an empirical methodology is engineered so that a nested test procedure can evaluate competing models. The authors apply this methodology to examine the demand for military activities of ten members of the NATO alliance. A two-stage least squares procedure, corrected for autocorrelation, is used to estimate the demand equations. Test results vary: some allies abide by the median voter model, others by the oligarchy model, and still others by neither. Copyright 1991 by MIT Press.

Date: 1991
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