Guest Speaker: Austin Horng-En Wang (Associate Political Scientist, RAND Corporation; Assistant Professor, Department of Political Science, University of Nevada, Las Vegas)

Lecture Abstract:

Moral hazard (MH) has been a persistent concern in U.S. alliance politics, which assumes that allies are motivated to reduce their defense efforts in response to stronger U.S. commitments. Cases from recent literature, including Taiwan’s substantial increase in defense spending between 2021 and 2024 when the Biden administration accidentally emphasized its assurances, challenge this MH assumption. This article proposes goal
interdependence (GI) as an alternative explanation: when the U.S. and its allies share the same strategic goal, such as maintaining the status quo, perceived U.S. efforts trigger reciprocal contributions rather than free riding. Evidence from a survey experiment (PollcracyLab, 2025, n = 1,300) and a nationally representative survey (TNSS, 2024, n = 1,506) in Taiwan supports the GI mechanism but not the MH. The findings offer theoretical and policy implications for understanding alliance behavior and sustaining deterrence in the Taiwan Strait.

Lecture Summary:

Austin Horng-En Wang’s lecture “Apes Together Strong”: How Assurance Trumps Moral Hazard in Alliances challenges the dominant view that United States (US) security guarantees create moral hazard (MH) among allies. Traditional thinking assumes that stronger US commitments encourage allies to cut their own defense efforts, a free-rider problem reflected in Trump’s criticism of the US–Japan security pact. Yet Wang notes that this assumption rests more on repetition than empirical proof.

Drawing on Taiwan’s substantial increase in defense spending between 2021 and 2024, even as the Biden administration unintentionally signaled stronger assurances, Wang argues that moral hazard does not adequately explain alliance behavior. Instead, he advances a goal interdependence (GI) framework: when allies and the US share strategic objectives, such as maintaining the status quo in the Taiwan Strait, US reassurance can stimulate reciprocal contributions rather than exploitation.

To test this, Wang compares the predictions of MH and GI. Two studies, a 2025 PollcracyLab survey experiment (n = 1,300) and a nationally representative 2024 Taiwan National Security Survey (n = 1,506), show that Taiwanese respondents react to US commitments by supporting higher, not lower, defense spending. Regression analyses similarly link defense budgets to US assistance and fiscal conditions, finding positive rather than negative effects.

Wang further highlights why public opinion matters: in democracies, audience-cost dynamics and externalized accountability shape leaders’ choices, as seen in US public support for Ukraine. Taiwan’s unique status as a democratic frontline state makes it a critical case for evaluating alliance theories. Overall, the lecture reframes alliances as repeated, cooperative games rather than one-shot bargains, suggesting that credible reassurance can strengthen, not weaken, partners’ contributions and thereby sustain deterrence.

Composed by: Nicole Richi (TSE senior student)