My Expanded Lowy Post on Moral Hazard in US Alliances: Explaining Japan-Korea (and Greece-Turkey?)

So this post is a bleg to those of you who know more about alliances than me. I am considering writing up this for an article, so I thought I would ‘crowd-source’ early comments on this. I also wonder if someone elsewhere has already suggested this idea in the vast alliance literature, so please let me know. The motivation is inductive – the deepening tension between Japan and Korea has suggested the addendum to alliance theory I am proposing here. But I wonder if others have said this before.

Put briefly, I don’t think entrapment or abandonment captures the US position between allies in dispute, like Japan and Korea, or Greece and Turkey (perhaps – I know that latter case less well). Instead, each seems to use the US alliance patron to: a) compete with each other, because b) the US alliance relieves external pressures (China and North Korea, and the USSR and chaos in the Balkans and Middle East, respectively) that would otherwise incentivize a rapprochement. These four states are not trying to ‘entrap’ the US so much as leverage it for an intra-alliance squabble, with the shared patron as referee. I’ve not read this theorized elsewhere, so here is an effort to do so.

This is much a fuller version of a post originally written for the Lowy Institute. Here is the original, unedited cut:

“The last six months have seen some of the worst Korean-Japanese tension in a long time. It should be painfully apparent now that Korea and Japan are not allies, despite, curiously, parallel alliances with the US. Specifically, it is an open question where South Korea’s allegiances would land were Japan and China to stumble into conflict in the coming years. While the US would likely arm-twist Seoul into siding with Tokyo, South Korea would probably tilt against Japan were its choice fully independent.

This is a real theoretical tangle in international relations theory (IR), as we tend to expect alliances to create a polarizing effect of two distinct camps. But contemporary Asia is not really shaping up like 1914, WWII, or the Cold War with their clearly defined blocs, and Japanese-South Korean tension is one of the big reasons why. This is a rich theoretical puzzle for any aspiring IR Asianists in need of a good dissertation topic.

I have been trying theoretically for awhile to explain Korea-Japan tension (here, here, here among others). Given their position right next to China, North Korea, and Russia, and shared liberal democratic values, they should be allies, but they aren’t. In fact, they are the opposite: Robert Gates’ memoir notes that former Korean President Roh Moo-Hyun labeled Japan as the greatest threat to Asian security, a notion that Gates said was a ‘little crazy’. So I’m increasingly using the idea of ‘moral hazard’ to explain their lack of alliance. Both are ‘insured’ by the US against more serious threats, so they can say all kinds of outlandish stuff about each other with no consequence.

Alliances are an old topic in IR. Going back to Stephen Walt, and Thomas Christensen and Jack Snyder and who knows how many other realists, a basic alliance concern has been either abandonment of the client or entrapment of the patron.

Abandonment is when a patron does not help an ally in a conflict; the ally then must capitulate to a threat or bandwagon with it. A recent Asia-Pacific example would be the Philippines’ conflict with China over the Scarborough Shoal. The US was simply unwilling to be chain-ganged into a potential conflict with China. The Philippines in turn has been forced to accept Chinese control and has sought a tighter relationship with Japan to compensate.

Conversely, the mechanism of the entrapment is recklessness by clients that chain-gangs patrons into conflicts against their wishes. Examples include: Austria-Hungary pulling Germany into World War I; North Korea pulling both the Soviet Union and Communist China into the Korean War; Cuba chain-ganging the USSR (almost) into the Cuban Missile Crisis; Abe’s Japan pulling US perhaps today into its stand-off with China. In each case, a smaller, weaker state picks a fight with a larger opponent, confident that a larger ally, a patron, will back it up.

But even though the small ally picks a fight with an opponent, but the patron also broadly shares the ‘enemy image’ of the opponent. That makes it easier for the patron to get sucked in. Some amount of the domestic level game in the patron’s politics has already been won by small state. It has allies in the patron’s foreign policy decision-making process who share its threat assessment and help entrapment happen. Israel and Iran is a really good example of that today. US neoconservatives and hawks have aligned with Benjamin Netanyahu against their own president (Obama).

But this entrapment dynamic, although often used to explain the Japan-Korea relationship, does actually fit well. Japan-Korea is better modeled this way: one ally (A) picking a fight with another ally (B), sticking the patron with an unwanted adjudication dilemma. Moral hazard captures that both are insured by the same patron (P). Because P’s elites do not view B as an enemy, P will not get chain-ganged in no matter how much A raises a fuss. Greece and Turkey in NATO are an example too, alongside Korea and Japan. Greece and Turkey, like Japan and Korea, have both sought to use their alliance with the US against the other, sticking the US with an unwanted adjudication it simply will not make.

So for aspiring grad students at Lowy and elsewhere, here is a possible theoretical addition to the alliance literature, with a nice empirical focus on Asia. This model captures Japan and Korea by focusing on ally-ally bickering rather than ally-opponent bickering. This carves out a third theoretical position, moral hazard, distinct from the traditional ideas of entrapment or abandonment.

This moral hazard model for Asia also opens a rich domestic level discussion about the patron’s friend/enemy images and threat assessments. The patron’s internal debate on A and B – which is a better ally and why – would drive how the patron responds to A and B’s bickering. So in the Japan-Korea case, the US has positive, almost equal friendship assessments of Korea and Japan, so the outcome is US strategic ambiguity, effectively freezing the conflict in place. In other words, the US will not choose Tokyo or Seoul, much the great frustration of both, and the conflict rolls on. But one could also foresee a situation like Greece and Turkey, where Greece is probably preferred, because Turkey is drifting toward Islamism under Erdogan. In that case the outcome would be an ‘informal tilt’ toward one ally over the other. But in neither dyad (Korea-Japan; Greece-Turkey) does ‘entrapment’ capture what is going on in the triangular relationship.

So I think this adds to our empirical understanding of Asia by explaining one of the most awkward (non)alliance outcomes in the region – Japan vs Korea. It also tightens the alliance literature through concept refinement/disaggregation in a major area of future relevance – Asia. Too much of the Asian alliance literature focuses on hub-and-spoke management and confrontation with China. But my idea captures inter-allied relations, which does not get nearly so much attention. The idea of ‘patron adjudication’ also strikes me as new. I cannot say that I have seen that idea before, but it seems reasonable to imagine allies competing for patron tilts. Clearly Korea’s current grand strategy debate springs from the perception that the US is tilting toward Japan.”