Trust, cooperation, and the tradeoffs of reciprocity

Abstract

This article demonstrates that foreign policies of reciprocity entail previously unrecognized tradeoffs. The conventional wisdom in international relations holds that reciprocating another state's cooperative and non-cooperative actions can simultaneously promote cooperation and allow states with compatible preferences to build trust. We present a model that synthesizes recent work on signaling and cooperation to identify a tension between the goals of building long-term trust and inducing short-term cooperation. Specifically, a receiver's highly reciprocal strategy generates strong incentives for hostile senders to behave cooperatively, which reduces the credibility of cooperation as a signal of benign intentions. Conversely, a less reciprocal strategy increases the credibility of senders’ cooperative signals, but forgoes the benefits of short-term cooperation with hostile states. Thus, uncertain receivers often face a tradeoff between inducing cooperation and eliciting credible signals. We illustrate these tradeoffs in pre-First World War British foreign policy, and highlight the article's policy implications for contemporary US–China relations.