How much does credibility matter in foreign affairs? Grappling with that question at Marginal Revolution, Tyler Cowen puts forth two competing theories.

Under theory number one, "observers are using the behavior of the American government to draw inferences about its true underlying type. A single act of breaking a promise or failing to honor a commitment would show we really cannot be trusted, or that we are weak and craven, and so that characterization of our true type would be applied more generally to all or most of our commitments."

Under the second theory, "we don’t have that much credibility in the first place. To be sure, we can be trusted to do what is in our self-interest. But there is not much underlying uncertainty about our true type. So we can promise Ruritania the moon, and fail to deliver it, and still the world thinks we would defend Canada if we had to, simply because such a course of action makes sense for us.... Our violation of a single promise changes estimates of our true scope of concern, but it does not much change anyone’s estimate of the true type of the American government."

On the whole, Cowen embraces the latter theory. "We’ve broken promises and commitments for centuries, and yet still we have some underlying credibility," he observes. "Still, when it comes to Taiwan, or those Japanese islands, or other Pacific islands, I think the first view plays a role," he continues. "That is, I think the world does not know our true type. How much are we willing to risk conflict to limit Chinese influence in the Pacific? Whatever you think should be the case, what is the case is not clear, perhaps not clear even to our policymakers themselves."