A central problem facing foreign investors is whether host-governments will violate their contracts once investments are made. A common mechanism through which states can overcome this commitment problem is by cultivating reputations in the eyes of potential investors. Yet we do not know how states’ current reputations shape their incentives to breach contract. I borrow a theory from recent work on reputation dynamics (Baser 2020; Phelan 2006) and argue that states with better reputations for treating foreign investors face stronger incentives to breac! h contrac t. An empirical implication is that, in the face of adverse exogenous economic shocks, states will exhibit differential tendencies to breach contract depending on their reputations. To test this prediction, I leverage as-if random occurrence of natural disasters. I find that states with good reputations for treating foreign investors are more likely to breach contract as a result of disasters. The results indicate that reputational concerns constrain states’ temptation to expropriate foreign property, but this constraining power wanes as reputations improve.