About November 2014
Do economic sanctions work? The question obviously might take more than a simple “yes” or “no” answer. But answering it well, with solid empirical data and close attention to the many consequences of sanctions in various circumstances, is vital to crafting a sound foreign policy. The intended benefits of sanctions are clear to all. But do we get them? What are the costs, besides the obvious ones? Do sanctions help us stay out of war, or do they encourage escalation?
Critics argue that economic sanctions are mostly a feel-good measure for domestic political consumption. Foreign governments can be very good at evading them, and globalization makes substitute goods more and more plentiful. Defenders of economic sanctions point to many instances in which they’ve actually worked as promised; they argue, further, that sanctions constitute an important middle step between friendly relations and open warfare.
Our lead essayist this month is Gary Clyde Hufbauer, who has done some of the most important empirical work around on the effectiveness of economic sanctions. Joining to discuss with him are Eric B. Lorber, a PhD candidate in political science at Duke University; Daniel W. Drezner, associate professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University; and Bryan Early, an assistant professor in the Political Science Department at the University at Albany, SUNY.
Gary Clyde Hufbauer reviews some of the factors that can lead to a successful sanctions policy - or that can prevent sanctions from succeeding. Sanctions seldom achieve major objectives without the threat of force, but they often achieve minor ones. They work better against friends and worse against autocracies. Sanctions strategy is important too - it’s better to impose a severe regime immediately, rather than slowly ramping up. Coalitions are not terribly helpful. Even despite their weaknesses, sanctions aren’t going to disappear anytime soon: They’re just too useful, as they fill a void between talk and armed conflict.
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.
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.
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.
Discussion to follow through the end of the month.
Related at Cato
- Daniel R. Pearson, “Russia, Sanctions, and Food,” Cato at Liberty, August 7, 2014
- William K. Watson, “Let’s Try Anti-Sanctions,” Cato at Liberty, March 10, 2014
- Justin Logan, “Shifting Rationale for Iran Sanctions,” Cato Daily Podcast, October 23, 2013
- Steve H. Hanke, “On the Failure of the Iranian Sanctions,” Globe Asia, February 2013