Carrots and sticks have always been used in combination in diplomatic affairs, but scholars and policymakers have focused more on the sticks than the carrots. In this provocative study, policy-savvy scholars examine a wide range of cases—from North Korea to South Africa to El Salvador and Bosnia—to demonstrate the power of incentives to deter nuclear proliferation, prevent armed conflict, defend civil and human rights, and rebuild war-torn societies. The book addresses the 'moral hazard' of incentives, the danger that they can be construed as bribes, concessions, or appeasement. Incentives can take many forms—economic and political, as palpable as fuel oil and as intangible, yet powerful, as diplomatic recognition and 'constructive engagement.' The cases demonstrate that incentives can sometimes succeed when traditional methods—threats, sanctions, or force—fail or are too dangerous to apply.