Taiwan's Foreign Policy and the Prisoner's Dilemma

A holistic accounting of Taiwan’s foreign policy objectives and commitments suggests an approach that is sprawling, under-funded and only partially coherent, despite significant adverse changes in the external environment. A discourse of ‘limited resources’ commonly used to explain lack of funding for government outlays does not stand scrutiny. A combination of substantial fiscal room for maneuver and a vast stock of capital assets under government management would in principle allow a more ambitious approach to external relations. Higher levels of financing could be allocated to dedicated foreign policy instruments like defense, Official Development Assistance (ODA) or the New Southbound Policy (NSP), and domestic programs that have substantial relevance to external relations, such as the 2022 Pathway to Net Zero. The reasons Taiwan has not done so should be a priority research area. One approach would combine Foreign Policy Analysis with diverse International Relations perspectives that can address the interplay between external and domestic factors. A promising hypothesis is that, as in the case of defense spending and priorities, the US policy of strategic ambiguity traps Taiwan in a prisoner’s dilemma, further complicated by domestic political differences, making any strategic, large-scale increase in resources impractical.