Coercive Diplomacy and Foreign Supply of Essential Goods: Effects of Trade Restrictions and Foreign Aid Suspension on Food Imports

ABSTRACT

Economic sanctions constrain targets’ capacity to maintain essential goods imports from foreign suppliers. This research points out that target states may respond to this adverse effect of sanctions by redirecting the resources invested to secondary goods imports to essential goods imports. In addition, I suggest that the availability of this strategy significantly varies across sanctions instruments. When facing foreign aid sanctions, targets may be able to effectively reallocate their import funding to sustain foreign supply of essential items. However, when they are subject to trade sanctions, such a response is not readily available. In the data analysis with 150 countries from 1974 to 2006, I utilize foodstuffs as a proxy of essential goods and provide evidence that targets under foreign aid sanctions transfer their import funding to maintain adequate amount of food aid. Yet, I find no evidence that targets subject to trade sanctions also respond with the same manner.

KEYWORDS:

• Economic sanctions
• trade restrictions
• foreign aid suspension
• food import

Acknowledgments

I would like to thank Christos Kollias and two anonymous reviewers for helpful comments and suggestions. All remaining errors are mine.

Disclosure Statement

No potential conflict of interest was reported by the author.

Supplementary Material

Supplemental data for this article can be accessed here.

Notes

1. Gross domestic product (GDP) per capita is widely used to measure the level of economic development. In the Threat and Imposition of Economic Sanctions (TIES) dataset, senders’ average GDP per capita is more than six times larger than that of targets.

2. In addition, the biased distribution of foreign aid can also result from the efforts of donor countries and aid distributing agencies to maximize their gains (see Koch, Westeneng, and Ruben 2007; Nunnenkamp, Öhler, and Andrés 2017; Nunnenkamp, Weingarth, and Weisser 2009).

3. If sanctioning countries withhold foreign aid in kind, target governments might respond with purchasing suspended goods from foreign exporters and distributing them to the needy. However, as the previous studies have noted (Nielsen 2013), withdrawing monetary assistance is a common form of aid sanctions. Thus, if target governments engage in compensating the losses for victims of aid sanctions, the compensation packages are likely to be provided as financial support.

4. The TIES dataset records both threatened and imposed sanctions cases initiated from 1945 to 2005. Since this research is interested in how target states respond to tangible economic costs of sanctions, I include only imposed sanctions cases in the analysis.

5. The remaining sanctions instrument categories recorded in the TIES dataset (asset freeze, travel ban, suspension of economic agreement, and ‘other’) are not independently assessed in the analyses. These types of sanctions are imposed only in 14 out of the total sample of 3,063 observations. Further, in none of those 14 observations, they are used separate from trade or aid sanctions.

6. It should be noted that multiple sanctions measures are often simultaneously imposed on a single target country. Such mixed sanctions cases are treated as both aid sanctions and trade sanctions following the previous studies (e.g. McLean and Whang 2014; Pond 2017). However, in order to check the findings are not driven by these mixed sanctions cases, I estimate the additional models excluding the observations with mixed sanctions cases in Table 3.

7. See Ahlquist and Wibbels (2012) and Wu (2015).

8. The bottom panel of Figure 1 shows that the upper-bound of 95% confidence intervals of aid sanctions goes below the zero line, when the value of GDP per capita is around 10.7. However, as this is quite an extreme value (about 98.8^th percentile value), it might not offer reliable evidence that aid sanctions reduce the proportion of food imports in highly developed countries.