Security or Autonomy? Moral Hazard and Intra-Coalition Conflicts

Why do allies come into conflict with each other in the face of increasing external threats? This article answers this question by pointing out the moral hazard inherent to alliance politics. In exchange for security commitments from a protector, a protege has to delegate part of her foreign policy autonomy to the former. I term this the `delegation in alliance,' where the protege is the principal and the protector the agent. A moral hazard arises when the protector misuses the delegated authority to serve her expansionist purpose. The growing external threats increase the probability of intra-alliance conflict by increasing the likelihood that the protege will refuse the requests made by the protector. By using an imperfect information model, this article reveals the mechanism underlying intra-alliance conflicts based on the concept of moral hazard.