This article argues that foreign policy substitution arises as a result of the costs of foreign policies relative to state resources. States with few resources are constrained in foreign policy choice compared to states with an abundance of resources. As a result, states with few resources will, on average, select, lower-cost policies than will resource-rich states. Resource-rich states, by virtue of their abundant resources, have greater discretion over policy choice and thus behave less uniformly than do resource-poor states. Our empirical results provide evidence of this and support the argument that substitution is in the variance.