Sanctions Sometimes Succeed: But No All-Purpose Cure

Like beauty, success is in the eye of the beholder. When my co-authors and I claim that economic sanctions have succeeded in a third of the 224 foreign policy episodes surveyed over the past century, we apply tolerant standards.[2]  Success in our eyes occurs when sanctions make a significant contribution to substantial achievement of the foreign policy outcome sought by the sender country. For bean-counting purposes, we divide the population of episodes between “successes” and “failures” based on a cutoff point in our numerical index – but in fact, the outcomes range across a continuum from dismal failure to total victory.

Our cutoff point for “success” is not total victory. In our analysis, if the episode had a positive outcome from the standpoint of the sender country – meaning the sender’s goals were partly realized – and if sanctions made a substantial contribution to that outcome, then we score the episode as a success. In the realm of diplomacy, total victory is rare. Indeed, as the muddled results of four Middle East wars since 1992 illustrate, slam-dunk success is elusive even for military intervention. In our view, sanctions can succeed even when they deliver only part of the objectives sought.

Nor, in our view, should success be measured by the pain inflicted on the target country. By that standard, sanctions against Iran (for its pursuit of nuclear weapons) and Russia (for its outright annexation of Crimea and support of separatists in East Ukraine) must be counted as huge successes. Both the Iranian and Russian economies are performing well below potential, in large part because of Western sanctions. But it’s far from clear that Iran will part with its nuclearaspirations, and it’s all too clear that Russia will not be dislodged from Crimea.

In neither case would we go to the other extreme and declare the Iranian and Russian sanctions dismal failures. Rather they illustrate the highly imperfect correspondence between economic means and political ends. Substantial economic pain does not reliably deliver political acquiescence; yet in some cases even the mere threat of sanctions delivers the desired result.[3]

So how do we provisionally grade the Iranian sanctions in 2014?  A marginal failure: economic misery contributed to the election of Rouhani (a comparative moderate), and in turn prompted Rouhani to negotiate with the Western coalition, but sanctions have not yet dissuaded Iran from its nuclear ambitions. What about Russian sanctions?  Another marginal failure: Crimea is now part of Russia, and Putin continues to support the East Ukrainian separatist. However, for the moment, Putin’s imperial ambitions have not extended to the Baltics, or Belarus, or the whole of Ukraine. In both cases, potentially positive outcomes can be discerned, but not more.

Another note of political realism must be sounded. Sanctions are often invoked because public opinion demands that leaders – particularly in the United States and Europe – “do something” in response to a foreign outrage. Thus President Reagan imposed symbolic sanctions on the Soviet Union after  Russian fighter planes downed Korea Airlines 007 in 1983, and President George H.W. Bush imposed mild sanctions on China following the Tiananmen Square showdown in 1989. Many other cases, from Rhodesia (1965) to Sudan (1993) fit this general description. In such cases, informed officials held few expectations that the sanctions would change the policies of the target countries, but the sanctions may well have satisfied public outrage. In our scale, however, satisfaction of domestic public opinion does not count as a foreign policy success.

Statistical Overview

Two tables, drawn from Economic Sanctions Reconsidered, 3rd edition (2007) and updates on the Peterson Institute website will prepare the ground for success enhancements, offered in the next section.

Table 1. Success and Failure by Period          
                 
        1914-1969   1970-2014
        Success cases Failure cases   Success cases Failure cases
Modest policy change     7   4    16  19
Regime change and democratization   7  10    22  51
Diruption of military adventures   4   6     0  10
Military impairment      3   6     7  16
Other major policy changes     2  14     8  12
                 
All cases        23  40    53 108
                 
All US cases      17  19    36  75
Unilateral US cases      10   9    11  43

Table 1 summarizes the record divided into two periods (1914 to 1969 and 1970 to 2014), and distinguishes episodes by their policy objectives. The number of cases more than tripled from 11 per decade in the first period to 36 per decade in the second. The United States has participated as a sender, alone or with others, in three-fifths of the cases over the past century. However, the US role as the lone sender has declined sharply since 1969, partly because the US success rate as the lone sender has plummeted. Finally, Table 1 illustrates that, as policy objectives become more difficult, the ratio of success to failure drops.

Table 2. Characteristics of Success and Failure Episodes
               
      Average Length of Episode    
      Success Cases   Failure Cases    
      4.4 years   8.5 years    
               
Success Rates Related to Prior Relations     

between Sender and Target

Cordial   Neutral   Antagonistic
46%   33%   18%
               
Success Rates Related to Regime Type in Target Country
Autocracy   Anocracy   Democracy
27%   34%   47%

Table 2 summarizes a few characteristics of success and failure episodes.[4]  Successes come relatively quickly, under five years on average, while failures are drawn out, over eight years on average. Success is much more likely when prior relations (before the imposition of sanctions) between sender and target were cordial rather than antagonistic. Finally, autocracies are much more resistant to sanctions than democracies.

Enhancing Success

We conclude by reprising broad lessons, derived from case studies, for enhancing the chances of a successful sanctions episode. But sanctions diplomacy remains more art than science, and these lessons do not pretend to offer sure-fire guidance.

Beware Exaggerated Expectations

Misinformed by media reports, the public often has exaggerated expectations of what sanctions can accomplish. This is especially true of the American public today and was true of the British public in an earlier era. At most there is a weak correlation between economic deprivation and political willingness to change. The divergence has been especially sharp in Iraq and Iran.

Moreover, Western publics have a poor understanding of differences in foreign policy objectives. Of the 53 episodes involving high policy goals between 1970 and 2014, success was achieved in only 15 cases, or 22 percent of the episodes. Among high policy goals I include only those episodes involving disruption of military adventures, military impairment, and other major policy changes (see table 1). Some authors have used the same phrase to refer to cases involving regime change as well.

To be sure, sanctions are often necessary to rally public opinion in the sender country; but they are seldom sufficient to achieve major objectives without the use or threat of force. Indeed, in some cases, economic sanctions merely provided an interim governmental response until military action could be organized—as President George H.W. Bush admitted in his memoirs about the first Gulf War. When the goals are modest —freeing a political prisoner or protecting emigrants abroad—sanctions have a far higher chance of contributing to successful outcomes (45 percent on average).

Friends Make Better Targets than Adversaries

Sanctions are most effective when aimed against erstwhile friends and close trading partners. Neither the Soviet Union, nor China, nor modern Russia have been amenable to Western sanctions – nor was Japan prior to the Second World War. But friendly countries have more to lose, diplomatically as well as economically, by holding fast to objectionable policies in the face of sanctions.

Only 18 percent of episodes preceded by adversarial relations between sender and target achieved any degree of success, and most of the somewhat successful cases involved either military force or the threat of military action. One example was U.S. air strikes against Libya when Qaddafi was riding high in the late 1970s.

Autocratic Regimes Make Tough Targets

It’s hard to bully a bully with economic measures. Autocrats can ensure that the pain inflicted by economic sanctions will be concentrated on powerless parts of the populace. The record shows that democratic regimes are more susceptible to economic pressure than autocratic ones, especially large autocratic countries.

In the great majority of cases, the target country also has been much smaller than the sender country. But it does not seem to make much difference whether the sender country (or coalition) is 10 times the size of the target or 200 times the size. Within a very broad range, the relative size of the target economy is less important than other factors that come into play.

Slam the hammer, don’t turn the screw

Political leaders  often prefer to deploy sanctions incrementally, both to buy time and to justify the subsequent use of force, if all else fails. Our analysis continues to recommend the opposite:  there is a better chance to avoid military escalation if sanctions are deployed with maximum impact. That was our conclusion regarding Iraq in 1990, Iran in 2007, and Russia in 2014. But the advice was generally ignored, as U.S. and EU leaders preferred to take the time to assemble a larger coalition rather than aggravate potential allies with harsh measures at the outset.

When the goal is a high policy objective, the costs imposed on target countries in success cases has been far larger than the average for episodes, and the cost is nearly ten times the level imposed in failed cases. The costs imposed when the goal is regime change have been almost 50 percent higher in success episodes than failures.

Along with customary trade controls, financial sanctions have lately been used with good effect, in the sense of visiting pain on target countries. The interruption of private financial flows, such as bank loans, trade finance, and foreign investment, came into vogue in recent cases against Iran and Russia, with substantial spillover effects by interrupting trade and disrupting target economies.

Sanctions imposed slowly or incrementally may simply strengthen the target government at home as it marshals the forces of nationalism. Thus, even though popular opinion in the sender country may welcome the introduction of sanctions, the longer an episode drags on, the more public support for sanctions tends to dissipate. This is particularly true for sanctions imposed by a coalition of sender countries.

More is not Always Merrier

A large coalition of sender countries does not necessarily make a sanctions episode more likely to succeed. International support for a sanctions policy can strengthen the political signal, but can also hurt chances of success by diluting the scope and impact of the common sanctions in the process of securing agreement among the senders.

In general, the greater the number of countries needed to implement sanctions and the longer the sanctions run, the greater the difficulty of sustaining an effective coalition. An observation on military alliances made by the great 19th century Prussian strategist Field Marshal Count Helmuth Von Moltke applies equally well to 21st century sanctions. Von Moltke held:

A coalition is excellent as long as all interests of each member are the same. But in all coalitions the interests of the allies coincide only up to a certain point. As soon as one of the allies has to make sacrifices for the attainment of a large common objective, one cannot usually count on the coalition’s efficacy. Coalitions never readily perceive that the large objects of a war cannot be attained without such sacrifices.[5]

The 1990 UN embargo against Iraq, which was unprecedented in its comprehensive coverage and almost universal participation, was the exception that proves the rule. Few post Second World War cases have provided the glue for common action by raising overriding security concerns as Iraq did by invading Kuwait in 1990, and threatening world oil supplies to boot. When Russia annexed Crimea in 2014, and then supported secessionists in East Ukraine, the Western allies had a difficult time agreeing on common sanctions – mainly because the blowback impact on Europe was so much greater than on the United States.

Don’t be a Spendthrift or Cheapskate

Senders need to match costs imposed on domestic constituencies (and allies) to expected benefits; otherwise, public support for the sanctions policy may quickly erode. But the right balance is critical: senders must not worry so much about minimizing self-inflicted costs that they deliver only a glancing economic blow.

These considerations suggest that sender governments should design sanctions so as to avoid concentrated costs on particular domestic groups. One example of actions to avoid, in all but extreme situations, is the retroactive application of sanctions to cancel existing contracts. Attempts to do so during the Soviet gas pipeline sanctions of the early 1980s created a strong backlash by affected U.S. firms and their European subsidiaries. Similar considerations prompted the U.S. Congress in 1998 to revise the Glenn Amendment, which would have blocked U.S. agricultural and other business contracts with India and Pakistan. Coalition sanctions against Russia for dismembering Ukraine were designed to avoid a European backlash, but after conceding Russia’s annexation of Crimea the ensuing sanctions were too weak to deter Putin’s support of secessionists in East Ukraine  

Summing Up

Economic sanctions will continue to play a large role in international relations, whether by academic tests they succeed or fail. Sanctions are far too useful as an intermediate response between diplomatic talk and military action to be put on the shelf. For that reason alone, sanctions will remain prominent in the armories of leading economic powers, especially the United States and the European Union. It may be only a matter of time before China, as a fast-rising economic power, begins to use sanctions openly in pursuing its own foreign policy goals.


Notes

[1] This essay draws heavily on the Institute’s study authored by Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott and Barbara Oegg, Economic Sanctions Reconsidered, 3rd edition. Peterson Institute for International Economics, November 2007.

[2] Long-running cases, such as sanctions against North Korea, Cuba and Iran, are divided into two or more episodes corresponding to changing policy goals. The 174 cases (corresponding to 204 episodes) surveyed in the 3rd edition are augmented by another 21 cases or episodes posted on the Peterson Institute website.

[3] The mere threat of sanctions dissuaded both South Korea and Taiwan from their pursuit of nuclear weaponry in the 1970s, and reversed a coup in Paraguay in 1996.

[4] This table is based just on the 204 episodes covered in Economic Sanctions Reconsidered, 3rd edition. However, the 20 post-2000 episodes exhibit the same characteristics.

[5] Daniel J. Hughes, ed. 1993, 36-37.

Also from This Issue

Response Essays

  • A New and Improved Sanction? Or the Same Old Story? by Eric B. Lorber

    Eric B. Lorber faults Gary Clyde Hufbauer for overlooking a key moment in sanctions history - the year 2005, when the United States began using its financial and technological prowess to isolate Iran and Russia. The new sanctions it deployed rely on third countries’ reluctance to abandon their economic and technological ties to the United States. No coalition building is necessary; faced with a choice between, say, Iran and the United States, others fall into line, because trade ties them more closely to the United States. That said, Lorber remains skeptical that sanctions, even of this new variety, can be effective at moving their targets toward the goals desired by the U.S. foreign policy establishment. Indeed, they may simply hurt ordinary Iranians and Russians, while hardening resistance to American foreign policy objectives.

  • Some Nuanced Responses on Economic Sanctions by Daniel W. Drezner

    Daniel W. Drezner reviews the pros and cons of economic sanctions, with a focus on their hidden effects, including corruption. Although Drezner agrees that the simple alternative - “they work!” versus “they don’t work!” - is inadequate, he suggests that the present debate could benefit from still more nuance than is offered in Hufbauer’s lead essay. Drezner subdivides autocratic regimes into those that face a significant civilian constituency, and those that do not; he subdivides coalition-based sanctions into those that are under the aegis of an international organization, and those that are not; and he stresses the deadweight loss that comes with failing to reach a bargain in any case. He ends on a fairly damning note, observing that trade sanctions encourage black markets and organized crime. This suggests that perhaps the reputation of sanctions as a foreign policy tool has been too high in recent years.

  • Why Sanctions Busting Leads to Broken Sanctions Policies by Bryan Early

    Bryan Early discusses sanctions busters: Countries that profit from flouting international trade sanctions. His research shows that these countries commonly manage to frustrate American sanctions. States including Cuba and Iran have been the beneficiaries of sanctions busters. Sanctions busters make it significantly less likely that a sanctions policy will succeed and significantly more likely that it will be called off entirely.

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