U.S. Defense Secretary Ashton Carter recently proposed more-assertive military options for the Spratly Islands in the South China Sea (SCS). The new policy would dispatch U.S. naval ships to within 12 nautical miles (nm) of China-controlled reefs, currently being “upgraded” into islands, and conduct flyovers with navy surveillance aircraft.

Crossing the 12-nm Line: From Sinking Costs to Tying Hands

Several days later, a face-off between the two militaries occurred. The Chinese People’s Liberation Army/Navy (PLAN) issued warnings when a U.S. P-8 Poseidon maritime reconnaissance aircraft flew over China-controlled artificial islands. It is not clear whether this will become a sustained pattern. It is particularly worth noting whether the U.S. naval vessels will cross the 12nm line. A warship cruising close to the man-made islands is a much stronger signal and a more real threat, at least in the eyes of the public, compared to a surveillance or anti-submarine plane flying over at 15,000 feet. Whatever the outcome, Secretary Carter’s proposal demonstrates that the U.S. military is considering a critical shift in its SCS bargaining strategy, shifting from sinking costs to tying hands.

American political scientist James D. Fearon examined sinking costs and tying hands, two types of signaling to increase credibility of threat. The first strategy, sinking costs, involves taking actions like troop mobilizations that are financially costly ex ante. The United States has relied on this strategy in recent years, incurring greater military and diplomatic investment to repulse Beijing. The second strategy, tying hands, creates domestic audience costs that the country will suffer ex post if it does not follow through on a commitment. If Washington publically pledges to send naval vessels across the 12-nm line, failing to carry out such action would create domestic political costs. Fearon argues that tying hands generally leaves decision makers better off. At the same time, this behavior heightens the risk of war.