When Do Imposed Economic Sanctions Work? A Critical Review of the Sanctions Effectiveness Literature

ABSTRACT

There is growing policy consensus in Washington and other Western capitals that economic sanctions are powerful tools to cope with major foreign policy crises. Are sanctions, particularly targeted sanctions, really the potent instruments optimists suggest? Under what circumstances do punitive economic measures induce policy change in sanctioned countries? To probe these queries, in this article I outline the conditions that have been identified as more likely to lead to successful sanctions outcomes in the literature. I also discuss four major shortcomings of existing scholarship. First, the sender-biased interpretation of sanctions effectiveness renders the treatment of the ‘ineffective’ cases with negative outcomes the same as those cases that induce no discernable change in target behavior. Second, the prevalent use of static data from existing sanctions databases reduces the ability of researchers to study various time-specific factors affecting the probability of sanctions success. Third, the dominant state-centric bargaining model in the literature offers limited insight into contemporary coercive measures directed at non-state actors. Fourth, the study of sanctions in isolation of other instruments that frequently accompany them, such as incentives and diplomatic pressure, leads to a partial understanding of the specific role sanctions play in shaping the outcome of key foreign policy initiatives.

KEYWORDS:

• Economic statecraft
• sanctions
• coercive diplomacy
• sanctions effectiveness

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. For in-depth analyses of the EU’s use of sanctions, see (Portela 2012; Giumelli 2011); for China sanctions, see (Harrell, Rosenberg, and Saravalle 2018), for UN sanctions, see (Giumelli 2011; Biersteker, Eckert, and Tourinho 2016; Carisch, Rickard-Martin, and Meister 2017), and for US sanctions, see (Drury 2005).

2. The list of UN sanctions is available at: https://www.un.org/securitycouncil/sanctions. The list of US sanctions can be accessed at: https://www.treasury.gov/resource-center/sanctions.

3. A growing body of research also focuses on the use and effectiveness of sanctions threats (Drezner 2003; Lacy and Niou 2004; Peterson 2013; Whang, McLean, and Kuberski 2013). The threat of sanctions tends to be more effective than their imposition as targets inclined to acquiesce might do so at the threat stage to avoid tangible economic and other costs of the imposition.

4. Table A1 in the appendix provides a summary table of all the key findings discussed below.

5. Others also raised possible case selection, methodological, and statistical issues in the quantitative sanctions literature (Nooruddin 2002; Lacy and Niou 2004; Drury and Yitan 2006; Van Bergeijk and Siddiquee 2017). The most notable debate concerns the possible selection effects due to the negligence of threats of sanctions in the widely-used Hufbauer et al. dataset. Other issues that are potentially important, yet receive little attention, is endogeneity concerns in the models estimating the effectiveness and consequences of sanctions, and the dearth of data on non-Western sanctions initiated by China and other countries.

6. Some notable exceptions on the impact of sanctions on individuals and non-state groups include (Eriksson 2011; Wallensteen and Grusell 2012; McLean et al. 2018; Radtke and Jo 2018).