I study the role of information transmission in interdependent environments. In the classic model of strategic communication, Crawford and Sobel (1982) characterize partitional equilibria between an informed  (biased) sender and an uninformed receiver. Instead, when both players take actions that are substitutable, there can be 'full information revelation' by the sender. In the presence of resource constraints, communication breaks down and there is only partial revelation of information. I characterize the set of pure-strategy equilibria for the communication game, and provide efficiency results that intuitively order the equilibria. Further, I compare welfare of players when, instead of communication and simultaneous decision making , there is sequential decision-making. Both the sender and receiver are (weakly) better off under simultaneous decision making, providing a rationale for both communication and 'cooperation' in the presence of resource constraints. 

Finally, I present an application of the theory to the role of information sharing in international alliances. I characterize the precise conditions for full information aggregation within alliances. Comparative statics with respect to state capacity (resources), preference heterogeneity (conflict of interest), and extent of substitutability are analyzed.