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risks creating opportunities for exploitative behavior by China and Taiwan while limiting the US’s
strategic mobility.
The common solution to transaction costs problems is to create institutions to absorb the
costs. The problem, however, with devising security institutions to manage dual deterrence
dilemmas is that the underlying cause of many disputes and resulting hostility between disputing
foes generally belies a cooperative institutional solution. In the case of the China-Taiwan issue, for
example, because the root cause of the dispute is Taiwan’s sovereignty, China is unlikely to
recognize Taiwan government as an equal member of an institution that has as its purpose the
resolution of the very issue for which it refuses to recognize Taiwan.
The second complication for a conditional deterrence solution to dual deterrence dilemmas
is the problem of misperception.
If the defender draws a line in the sand, conflict can follow even
if both the challenger and the ally prefer the status quo to conflict. Say the US declares that its
willingness to intervene on Taiwan’s behalf is contingent upon China attacking Taiwan without
Taiwan first moving toward independence, and US non-intervention is made contingent upon
Taiwan moving toward independence without China first attacking. Because ‘a move toward
independence’ is difficult to specify, conflict due to misperception of types can result as Taiwan
decides what political moves to make and as China and the US decide how to respond. Assuming
Taiwan does not know if China and the US are hard, meaning they interpret Taiwan’s action as a
move toward independence, or soft, meaning they take a less hardline interpretation of Taiwan’s
move, then Taiwan faces considerable risk about misjudging the US and China’s types and may
inadvertently choose an action that provokes a hostile response from China. If the US is soft, then
it is likely to interpret Taiwan’s move as non-independence seeking and will likely defend Taiwan
if China attacks. Thus, if Taiwan perceives the US to be soft, it will undertake the move even if it
perceives China to be hard. However, if China is hard and Taiwan mistakes a hard US for a soft
one, then Taiwan will inadvertently make a move that will trigger a hostile response from China
and the US will not intervene. Even if Taiwan correctly perceives the US to be hard and, therefore,
Convention