The puzzle, then, is that Iceland remained and remains part of a military alliance of which its greatest threat was and is a powerful member. From a theoretical view, this is clear but unsurprising evidence of bandwagoning – alleviating a threat by joining with it. The critical implication is that neorealist theory cannot fully explain this decision to bandwagon. Why did Iceland not align—or even consider aligning—with the Soviet camp? (The notion of a stubborn island state joining with the Soviets to create a thorny balance of power with a proximate, economically dominant world power, after all, resonates well with Cold War history.) A complete answer must account for the domestic and institutional factors that neorealism would have us dismiss.

First, Soviet alignment simply made no sense within an Icelandic social context. In a recent public address, Icelandic President Ólafur Ragnar Grímsson explained that Iceland’s current reluctance to join the EU was largely due to its cultural wariness of bureaucracy and traditional emphasis on “face to face” problem-solving. Grímsson cited the USSR as the model of the massive, bureaucratic, competition-reducing entity that would be entirely incompatible with Iceland itself. It would require further analysis and speculation to determine whether withdrawal from NATO (or, given that the maritime economic threat to domestic stability was longstanding, initial non-alignment with NATO) in favor of the Soviet bloc would have a rational choice for Iceland’s security-seeking government. Iceland, as a liberal polity, writes Elman, was and is “constructed to allow for the participation of … societal actors in policy formation.” The cultural incompatibility of the Soviet ethic with Icelandic social norms, therefore, effectively prevented Soviet alignment from being considered as a viable option. In other words, domestic conditions constrained policymakers’ set of choices for minimized risk. A purely neorealist perspective neglects this reality.

Second, and perhaps more tangible, NATO itself facilitated Iceland’s easement of the British threat. The base at Keflavik proved to be a bargaining chip that drew other NATO partners, most notably the United States, into the dispute as mediators. Iceland’s threat to deny NATO access to the Keflavik base extended the costs of the Cod War to the United States, which had no stake in the outcome of the conflict itself. Britain agreed to a solution in which its fishermen would informally respect Iceland’s 200-mile territorial claim without a permanent governmental concession of British fishing claims there. The structure of the coalition thereby provided an incentive for conflict mediation (and, as a result, for the reduction of the imperilment to Iceland’s stability and welfare). In other words, membership in a multinational institution provided a mechanism that would not have otherwise existed for ending a security threat. This, too, is a truth of Iceland’s alignment behavior that strict neorealism disregards.

The more contemporary example of Palau and the Federated States of Micronesia (FSM), members of the US-led coalition for the war in Iraq, similarly reveal the importance of domestic concerns in determining states’ alignment behavior. Both of these tiny Pacific Island nations (Palau’s population is under 20,000) maintain a unique relationship with the United States, governed by separate Compacts of Free Association that essentially exchanges long-term aid and protection for American rights to use the islands for defense facilities. Palau and Micronesia neither contribute—aside from political and moral support—to the US cause in Iraq, nor do they burden the US effort. As Palau and FSM allied with a powerful nation closely linked to their interests, US President George W. Bush cited the two states’ commitments to the war, among others, in his efforts to persuade the public of the coalition’s diversity.

That both sides have at least a little to gain from the Pacific nations’ inclusion in the Iraq alliance seems clear. The surprisingly acrimonious and complex nature of the Palau and FSM’s relationship to the United States, however, makes their coalition status worth investigating. Palau President Tommy Remengesau, Jr. described his nation as “overwhelmed by the United States Homeland Security effort.” He criticized both the United States desire to officially tighten immigration controls to limit Palauians’ ability to freely enter the United States—a right that has already been limited but is guaranteed by the initial Compact—and the US demand that Palau improve security technology and enforcement at its airport, which it cannot afford to do. Palau even showed some unexpected pluckiness in its recent dealings with the United States, rejecting membership in the National Exchange Carriers Association (which would drastically reduce long-distance telephone rates) because it believed the offer was merely a gambit to induce a formal agreement on immigration restrictions. Remengesau summarized his nation’s view of the dynamic of its relations with the United States: “All we get is statements that we’re their friends, but nothing in deed is being done to treat us as friends.”

FSM was in a more precarious position when, like Palau, it agreed to join the coalition against Iraq in March 2003. Its compact, shared with the Republic of the Marshall Islands (RMI), was about to be considered for renewal and amendment in September 2003 by Washington. RMI provides the benefit that the United States derives from its ties to these island states, since the Ronald Reagan Missile Defense Test Site on RMI’s Kwajalein Atoll is the only location in the world with the capacity for full-scale testing of long-range missiles. Though FSM received aid under the initial Compact, RMI possessed the only substantive bargaining power. FSM’s desire for a Compact extension, then, was necessarily on shaky ground.

Clearly, then, while the thought of a US attack on Palau or FSM is ludicrous, the United States—with security mandates and restrictions and well-leveraged aid that may be withdrawn—was to some degree these countries’ adversary. One would be hard-pressed to think of any country that could have conceivably bothered to directly threaten Palau or FSM’s security. Given these states’ pre-existing dependence upon the United States, a US government advancing aid cuts and costly anti-terrorism policies was actually their most pressing threat. Palau and FSM’s alignment choice, therefore, represents bandwagoning—an attempt to curry favor with a controlling threat.