COOPERATION, SIGNALS, AND SANCTIONS

Abstract

This paper uses game theory and modeling to address the role of incentive structures and information dynamics in nuclear inspections. The traditional argument is that compliant states should be willing to allow inspections to prove their innocence, while proliferating states are likely to impede inspections. This argument does not take into account the historical variation in inspection, signaling, and sanctioning behaviors. Using a game theoretic analysis and model, it is shown that the separation of proliferators from nonproliferators only occurs when the likelihood of proliferation is high and punishment costs are moderate. The model assumes that states can choose how much to cooperate with inspectors and must pay opportunity or secrecy costs when inspections are effective. The results are tested against a set of real-life cases, providing support for the claims of historical variation and the model's deductive propositions.

Keywords:

• Nuclear inspections
• sanctions
• nonproliferation regime
• nuclear weapons
• game theory

Acknowledgements

I would like to thank Robert Axelrod, Peter Lavoy, Arthur Lupia, James Morrow, Dominick Wright, and two anonymous reviewers for comments on previous drafts. Any errors are my own.

DISCLAIMER

The views expressed in this article are those of the author and do not reflect the position of the U.S. Military Academy, the Department of the Army, or the Department of Defense.

Notes

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9. See Scott D. Sagan and Kenneth N. Waltz, The Spread of Nuclear Weapons: A Debate (New York: W.W. Norton, 1995).

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11. See Richard K. Betts, “The New Threat of Mass Destruction,” Foreign Affairs 77 (January 1998), pp. 26–42.

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13. See Stephen M. Walt, “Beyond bin Laden: Reshaping U.S. Foreign Policy,” International Security 26 (Winter 2001/02), pp. 56–78; and Allison, Nuclear Terrorism.

14. See Robert O. Keohane, After Hegemony (Princeton: Princeton University Press, 1984); Robert Axelrod and Robert O. Keohane, “Achieving Cooperation Under Anarchy: Strategies and Institutions,” World Politics 38 (October 1985), pp. 226–54; and George W. Downs et al., “Is the Good News about Compliance Good News about Cooperation?” International Organization 50 (Summer 1996), pp. 379–406.

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18. See Keohane, After Hegemony; and Downs et al., “Is the Good News about Compliance Good News about Cooperation?”

19. For a discussion, see James D. Morrow, Game Theory for Political Scientists (Princeton: Princeton University Press, 1994).

20. Work focused on the design of institutions, and, more specifically, the associated monitoring mechanisms have addressed some of these issues. See Barbara Koremenos et al., “The Rational Design of International Institutions,” International Organization 55 (Autumn 2001), pp. 761–99; and Hyeran Jo, “Information Mechanisms in International Cooperation: Sources of Non-Compliance and Value of External Information Devices,” paper presented at the Annual Meeting of the Midwest Political Science Association, Chicago, April 2005.

21. Statute of the IAEA, 1956, <www.iaea.org/About/statute_text.html>.

22. The Additional Protocols are intended to give the IAEA improved ability to monitor and verify.

23. Michael Herman, Intelligence Power in Peace and War (Cambridge, UK: Cambridge University Press, 1996).

24. The assumption that proliferation is a binomial choice simplifies the variation of behavior possible in weapons research and development, but this abstraction is useful for modeling purposes.

25. See Harrison, “Did North Korea Cheat?”

26. Bemauer Ruloff, The Politics of Positive Incentives in Arms Control (Columbia, SC: University of South Carolina Press, 1999), p. 130.

27. See Nikolai Sokov, “Recent Developments in Nuclear Weapons Verification,” in Trevor Findlay and Oliver Meier, eds., Verification Yearbook 2002 (London: Verification Research, Training, and Information Centre, 2002), p. 25.

28. IAEA, “Programme and Budget for 2009,” <www.iaea.org/About/budget.html>.

29. See George MacLean and James F. Keeley, “Calculating Costs: A Critical Assessment of Verification Costs for a Fissile Material Cutoff Treaty,” 1996 Canadian Non-Proliferation Workshop. There are other estimated costs for fewer facilities.

30. Sandeep Baliga and Tomas Sjostrom, “Strategic Ambiguity and Arms Proliferation,” Journal of Political Economy 116 (December 2008), pp. 1023–57.

31. See Herman, Intelligence Power in Peace and War.

32. Note that contenders can select a level of cooperation, and the model could be altered such that the inspection costs are endogenously contingent on that level. If this specification were used, there would have to be an additional variable to ensure that disclosure is not wholly based on the cooperation level.

33. Note that the equilibrium specified above might not meet trembling-hand perfection if the contender plays a strategy of C = C* + ε, where ε stands for some very small amount.

34. Recall that inspections can be ambiguous, effective revealing cooperation, and effective revealing proliferation.

35. The Iraq Survey Group later confirmed that no major weapons programs had been ongoing. See Kay, “What Is the Future of Nonproliferation?”

36. Rice, “Why We Know Iraq is Lying.”

37. Saddam Hussein told FBI interrogators that he feared signaling weakness to Iran. See Joyce Battle, ed., “Saddam Hussein Talks to the FBI: Twenty Interviews and Five Conversations with ‘High Value Detainee # 1’ in 2004,” National Security Archive Electronic Briefing Book No. 279, National Security Archive, George Washington University, July 1, 2009, <www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB279/index.htm>.

38. Kevin Woods, James Lacey, and Williamson Murray, “Saddam's Delusions: The View From The Inside,” Foreign Affairs 85 (May/June 2006), pp. 2–26. See also Glenn Kessler, “Hussein Pointed to Iranian Threat Specter of Arms Allowed Him to Appear Strong, He Told U.S.,” Washington Post, July 2, 2009, p. A1.

39. David Kay recalled an incident in which Iraqi forces acted hostilely toward inspectors, despite Iraq's physical allowance of inspectors. See Kay, “What Is the Future of Nonproliferation?”

40. The Nixon Doctrine called for the United States to keep treaty commitments and provide a shield against nuclear threats to allied nations, but also called on these states to be self-reliant on matters involving non-nuclear aggression. See Henry Kissinger, Diplomacy (New York, NY: Simon and Schuster, 1994).

41. Rebecca K.C. Hersman and Robert Peters, “Nuclear U-Turns: Learning from South Korean and Taiwanese Rollback,” Nonproliferation Review 13 (November 2006), pp. 539–53.

42. Jungmin Kang et al., “South Korea's Nuclear Surprise,” Bulletin of the Atomic Scientists, January/February 2005, pp. 40–49.

43. For a discussion see Kang et al., “South Korea's Nuclear Surprise,” pp. 40–49.

44. Christopher A. Stevens, “Identity Politics and Nuclear Disarmament: The Case of Ukraine,” Nonproliferation Review 15 (March 2008), pp. 43–70.

45. “Kazakhstan Profile: Nuclear Overview,” Nuclear Threat Initiative/James Martin Center for Nonproliferation Studies, January 2009, <www.nti.org/e_research/profiles/Kazakhstan/Nuclear/index.html>.

46. Miller, “The Case Against a Ukrainian Nuclear Deterrent,” pp. 67–80.

47. Note that both states, particularly Ukraine, had incentive to keep the weapons for deterrence of aggression and deterrence of sanctions. Both countries also had fragile economies, were looking for assistance, and looking to improve relations with the United States.

48. For a discussion on lessons, see Frank V. Pabian, “South Africa's Nuclear Weapons Program: Lessons for U.S. Nonproliferation Policy,” Nonproliferation Review 3 (Fall 1995), pp. 1–19; Stephen Burgess, “South Africa's Nuclear Weapons Policies,” Nonproliferation Review 13 (November 2006), pp. 519–26.

49. Stephen Burgess and Helen Purkitt, “Paths to Disarmament: The Rollback of South Africa's Chemical-Biological Warfare and Nuclear Weapons Programs,” U.S. Air Force Institute for International Security Studies, Occasional Paper 37, February 2001.

50. “Status of Nuclear Weapon States and their Capabilities,” Nuclear Information Project, Federation of American Scientists, March 2008, <www.fas.org/nuke/guide/summary.htm>.

51. See Susan Hannah Allen, “The Determinants of Economic Sanctions Success and Failure,” International Interactions 31 (April 2005), pp. 117–38.