June 10, 2019

When Do Economic Sanctions Work Best?

Five Key Conditions Associated with Successful Sanctions Outcomes

With the success of comprehensive financial sanctions against Iran over nuclear proliferation during the Obama administration, policymakers in Washington have grown more confident that economic sanctions are potent instruments for inducing concessions from hostile countries. The growing belief in the effectiveness of coercive economic instruments has increased the prevalence of sanctions and made them the primary instrument for the Trump administration. Yet, the consensus in academic literature is that conventional trade and financial sanctions result in some meaningful behavioral change in the targeted, or sanctioned, country about 40 percent of the time. Most targeted sanctions, such as bans on the sale of luxury goods and sectoral sanctions, have an even lower success rate at about 20 percent. Given the relatively low success rate of sanctions, here are five recommendations from academic literature creating conditions for sanctions to work:

  • Aim for major, immediate damage to the target economy. The higher the immediate cost of sanctions on the economy, the less likely target governments can adjust their policies to evade the sanctions. Major economic dislocation would subsequently pressure leaders to concede to sanctions in order to minimize the damage on their legitimacy and capacity to rule. Leaders might even be more inclined to acquiesce if the immediate economic pain is felt significantly by powerful economic and political groups in their close ruling circle.
  • Seek cooperation from other countries and international organizations. The higher the number of sanctioning countries, the greater the economic pain target economies will face if they defy sanctions. Further, multilateral sanctions reduce the number of third-party partners and markets available to target countries to make up their economic losses. It is even better to impose multilateral sanctions under the auspices of international organizations to seek help in establishing mechanisms to monitor the enforcement of sanctions. International organizations can also be instrumental in strengthening collective sanctions regimes by developing punitive tools to disincentivize defections and free-riding among the sanctioning countries.
  • Expect autocratic regimes to resist foreign pressure more often than democracies. The small support base and the control over the redistribution of public resources enables most autocratic regimes to survive economic sanctions. They are able to keep their ruling coalition intact through the supply of selective inducements, such as access to scarce luxury goods, to their supporters in return for their loyalty to the regime. Even in cases where growing economic suffering and international pressure associated with sanctions mobilize the opposition and trigger anti-regime protests, authoritarian leaders’ command over the coercive state apparatus allows them to quell dissent rather than concede to sanctions.
  • Consider that rivals are more defiant against sanctions than allies. If countries are sanctioned by their rivals, they have less incentive to alter their behavior because of the assumption that future conflict with them is likely. This is reinforced by the negative domestic or international reputational effects that would follow from capitulating to rivals. Allies, on the other hand, are more willing to concede to avoid the escalation of the dispute that would further harm their strong strategic ties with sanctioning countries.
  • Anticipate that sanctions are less effective in achieving major policy objectives than modest ones. Coercive economic instruments work less often in achieving major policy objectives like military impairment or political regime change than achieving modest policy goals like releasing a political prisoner or resolving a minor trade dispute. The use of sanctions to achieve the ambitious goal of regime or leadership change might even backfire by inducing insecure leaders to become more authoritarian and use repressive means against the domestic opposition to cling to power.

Policymakers should expect better outcomes when they design sanctions regimes that involve multiple sanctioning countries; exact major economic costs on powerful groups close to a target government; and seek to achieve modest policy objectives. Sanctions also appear to be more potent tools in handling foreign crises with democratic regimes and allies than autocracies and hostile countries.

Dursun Peksen is a professor of political science at the University of Memphis.

Read more in the CNAS Grappling with the Growing Use of Sanctions commentary series.

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