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This paper examines the potential risk effects of alliance commitments on dispute onset and escalation. This issue is theoretically framed as a moral hazard problem from the economic literature: if one party (agent) pledges a particular commitment to another party (principal), the moral hazard for the agent arises if the principal's behavior (e.g. a reckless move) raises the risk for an agent to act on its behalf due to its contractual commitment to the principal. In international relations, alliance commitments might pose such a moral hazard risk in the context of extended deterrence. That is, how much can the protege's behavior vis-a-vis another state actually entrap its ally ("defender") into a conflict? I separate an answer to this question into two specific issues: (1) whether states with alliance commitments from others are more likely to initiate conflicts than other states without such alliance provisions; (2) given that a conflict is initiated between the protege and its opponent, whether the protege is likely to get an aid from its ally and at what escalation level. After the conceptual and theoretical discussion, the paper proceeds with a quantitative empirical analysis and draws conclusions for current U.S. policies in cases of its relations with Taiwan in East Asia, India and Pakistan in South Asia, and Israel in the Middle East. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]

The article presents information on the U.S. policy toward the Taiwan Strait under the administration of President George W. Bush. It puts the policy under historical perspective by examining the evolution of it. Some previous research literatures will be briefly discussed and argues that all of them cannot convincingly account for U.S. policy toward Taiwan in this time period. It proposes that there are two levels in the international system and rational actors at different levels will play different games to maximize their interests and power.