‘Coercive Cooperation’ in Action: Explaining South Korea’s Non-proliferation Financing Regime

Abstract

Inducing cooperation from hesitant members in a sanctioning coalition is critical for effective implementation of a financial sanction. Strategic cooperation among states with divergent interests involves time inconsistency and incomplete information, however. A ‘coercive cooperation’ approach addresses this problem either by imposing ex post costs through higher audience costs or offering ex ante benefits through tactical issue linkage. This paper applies a Bayesian equilibrium model to address the sequencing of these two main factors that contribute to ‘coercive cooperation’. Unlike in games with complete information, our model explains why the sender state not only resorts to international institutions but also employs unilateral countersanctions to enforce compliance in a sanctioning coalition. It is shown that international organizations offer ex ante benefits through issue-linkage while the sender state imposes ex post costs with a threat of countersanctions. When the follower state perceives the benefits to be greater than the costs, it has strong incentives to join the coalition with no substantive change in implementing measures. Once in a bandwagon, however, the sender can bring about active implementation by imposing audience costs on himself and the follower. The predictions from the model have been supported by the case study on South Korea’s non-proliferation financing regime.