A unifying theory of positive and negative incentives in international relations: sanctions, rewards, regime types, and compliance

Should democracies be rewarded and autocracies punished, or should it be the reverse? This is an important question for foreign policy makers who regularly find themselves wanting to alter the behavior of foreign governments favorable to their interests. Existing studies on economic sanctions and rewards provide an uneasy answer that sanctions are more effective toward democracies and rewards work better toward autocracies, suggesting democracies need to be punished while autocracies need to be rewarded. We revisit the issue of regime type and incentive form by building a game theoretical model focusing on domestic political dynamics in a Target country. When we distinguish betwen three types of reigmes lined up on an accountability continuum, the theoretical model yields the claim that sanctions and rewards work better with both extremes—democracies and dictatorships—than with the intermediate category of limited autocracy, for which only rewards work.