Long-term, economic incentive programs are a more pervasive feature of international relations than is generally appreciated. This article examines a recent incentive program - US technology transfer to the People's Republic of China - to determine its role in fostering bilateral cooperation (policy adjustment by one state to facilitate the goals of another) and in contributing to international peace and stability. The initial findings suggest that economic incentives can be a qualified success in achieving cooperation between the sender and target state largely through conditioning the environment in a manner that improves the possibility of goal attainment for both parties. In the broader international context, economic incentives are neither per se stabilizing nor destabilizing. As with any exercise of power, economic incentives or rewards carry the possibility of improving chances for peace or the possibility of destabilizing international relations, depending upon the situation in which they are introduced and the manner in which they are executed.