A Tale of Two Incentives: How divergent incentives, for opportunism and restraint, collectively shape state behavior

Abstract

This study explains how divergent incentives, for opportunism and restraint, shape state behavior. Divergent incentives arise when states exist within two Hobbesian systems that have different material structures. China, for example, is the second-ranked global power, but lacking an effective local counterweight, it remains unbalanced in East Asia. Thus, Beijing receives a restraining incentive from the international system and an opportunistic local incentive. Neorealism cannot explain how these incentives interact: because its principal theories employ extreme parsimony, to the point that they can only consider single incentives in isolation. Neorealism contains a useful metaphor though, that likens incentives to the Newtonian principle of force. Extending this metaphor in accordance with Newtonian mechanics, I create a framework for evaluating concurrent incentives. Since divergent incentives only occur under a single set of conditions, I use this framework to derive a theory-of-constraints that explains how regional aspirants should behave when they enjoy a local military advantage but face a more powerful extra-regional balancer. To this end, divergent incentives theory argues: 1) divergent incentives encourage moderated opportunism – a restrained power-maximizing behavior, that seeks incremental gains in a manner that minimizes the risks of escalation and retaliation; 2) divergent incentives facilitate challenges to the regional status quo, that do not end in voluntary withdrawal or hegemonic war; and 3) noncompliance with incentives has adverse consequences. The theory enjoys strong empirical support. Across three cases (the US ascent to regional hegemony, Japan’s quest for regional hegemony, and the Soviet menace to Europe), aspirants exhibited moderated opportunism in 24 of 26 instances, and in the other two, aspirants were punished relative to the extent of their noncompliance. Each case outcome was also broadly consistent with the theory’s expectations.