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The impact of UN and US economic sanctions on GDP growth

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Abstract

In this paper, we empirically assess how economic sanctions imposed by the UN and the US affect the target states’ GDP growth. Our sample includes 68 countries and covers the period 1976–2012. We find, first, that sanctions imposed by the UN have a statistically and economically significant influence on economic growth. On average, the imposition of UN sanctions decreases the target state’s real per capita GDP growth rate by 2.3–3.5 percentage points (pp). These adverse effects last for a period of 10 years. Comprehensive UN economic sanctions, that is, embargoes affecting nearly all economic activity, trigger a reduction in GDP growth by more than 5 pp. Second, the effect of US sanctions is much smaller and less distinct. The imposition of US sanctions decreases GDP growth in the target state over a period of 7 years and, on average, by 0.5–0.9 pp.

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... Since the end of the Cold War era, sanctions have emerged as one of the most important and widely used tools of economic statecraft in international politics (Neuenkirch & Neumeier, 2015). As Weiss (1999) claims, the explosion of post -Cold War sanctions cases is affiliated with three main reasons. ...
... The stigma upon the targeted political regimes may be used as a signaling mechanism for donors that internal conflicts in the target state have the potential to escalate. Sanctions thus symbolize a serious threat to its political stability and this uncertainty ought to have a detrimental impact on the target state's trade and financial relations as well as on its domestic and foreign direct investment (Neuenkirch & Neumeier, 2015). ...
... Hence, the life expectancy is significantly lowered, while the infant mortality rate experiences an upturn. (Neuenkirch & Neumeier, 2015). ...
Article
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Post-Cold War financial sanctions utilization reached its peak as policymakers employed used them in order to face address major international crises. Their prominence among foreign policy instruments sparked the interest of many scholars and enriched the existing literature. However, their attractiveness raises several interesting research questions, such as "Do targeted sanctions suffice to achieve the defined objectives?", "Which variables affect their effectiveness?", "What shortcomings can be overcomed to make them more productive?" To probe these queries, in this paper different aspects of both comprehensive and financial/ smart/ targeted sanctions are examined. It is concluded that political will and better understanding of their effects is needed to improve sanctions design and overcome legal and administrative obstacles, since the current flaws are not incurable.
... Academics have uncovered a host of ways that sanctions might impair people's lives in target countries. At the broadest level, economic sanctions can deal significant damage to their targets' formal economies ( Neuenkirch and Neumeier 2016a ). Research has also shown that sanctions drive economic activity in targets into the shadow sector where it goes unmonitored, untaxed, and unregulated ( Early and Peksen 2019 ) and lead to a greater risk of high levels of inflation ( Batmanghelidj and Moret 2022 ) and economic shocks, such as banking and currency crises ( Peksen and Son 2015 ;Hatipoglu and Peksen 2018 ). ...
... Economic sanctions can inflict misery upon their targets in a multitude of ways. Sanctions impose an array of economic disruptions and costs that harm their targets' economies ( Neuenkirch and Neumeier 2016a ). They disrupt trade in ways that often result in economic contraction within target states and may cause currency and banking crises ( Peksen and Son 2015 ;Hatipoglu and Peksen 2018 ). ...
... In general, research has shown that the sanctions' adverse effects are influenced by the severity of the costs and disruptions they impose ( Allen and Lektzian 2013 ;Neuenkirch andNeumeier 2016a , 2016b ;Early and Peksen 2019 ). The more severe the costs that sanctions impose on their targets, the more they will disrupt target citizens' welfare. ...
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Economic sanctions are coercive policies capable of inflicting social, political, and humanitarian suffering that go far beyond their economic effects alone. The United States employs economic sanctions more than any other government in the world. In this study, we analyze how US sanctions policies can inflict misery upon the states they target. Our contributions to the literature are two-fold. First, we introduce a new, consolidated measure called the Freedom from Misery index to capture the disparate, adverse effects of sanctions on socioeconomic and political conditions within target states. Second, we offer the first empirical analysis of the extent to which sanctions imposed by the United States increase the misery gap between the United States and targets of US sanctions. We theorize that high-cost sanctions and, counterintuitively, human rights sanctions will inflict significant amounts of misery on the states they target. Using data from 1971 to 2015 for over 145 countries, we conduct quantitative analyses to evaluate the degree that US sanctions, including those involving the United Nations, contribute to miserable living conditions in their targets. We find that US sanctions, particularly those inflicting major costs on targeted economies and those imposed for human rights reasons, immiserate their targets’ populations. Extensions of our main analysis further show that US sanctions widen the misery gap between the United States and target states, contributing to greater international inequality.
... Targeted sanctions, also known as "smart sanctions," have been used as an alternative to military action (Gordon, 2011). The UN Security Council has increased its use of sanctions against violators of international human rights law and international humanitarian law (Neuenkirch and Neumeier, 2015). According to Neuenkirch and Neumeier (2015), the United Nations and the United States impose economic sanctions that have a significant statistical and economic impact on economic growth. ...
... The UN Security Council has increased its use of sanctions against violators of international human rights law and international humanitarian law (Neuenkirch and Neumeier, 2015). According to Neuenkirch and Neumeier (2015), the United Nations and the United States impose economic sanctions that have a significant statistical and economic impact on economic growth. The imposition of UN sanctions reduces the target state's real per capita GDP growth rate by an average of 2.3 to 3.5 percentage points. ...
Article
The performance of energy firms plays a crucial role in ensuring energy security, as it determines the availability and affordability of energy resources for a country, especially in the face of geopolitical crisis. This study explores the impact of economic sanctions imposed on Russia in early 2022 on energy stock returns in 57 countries, providing causal evidence on the relationship between major geopolitical events and energy security. Using advanced DiD methodology, the research found that nations heavily reliant on oil imports saw a significant increase in energy stock returns, suggesting no major issue of energy security in sanction-sender nations. Moreover, renewable energy companies experienced a greater rise in returns than non-renewable counterparts, indicating a potential shift towards renewables during times of geopolitical tension. These findings shed light on the intricate relationship between geopolitical events, market trends, and energy security policy, offering valuable insights for policymakers to navigate this complex landscape.
... 1. Sanctions, for example, have adverse effects on the economy (Gutmann et al. 2023b;Neuenkirch and Neumeier 2015), increase economic inequality (Afesorgbor and Mahadevan 2016;Moteng et al. 2023;Neuenkirch and Neumeier 2016), harm the health of target populations -especially that of their most vulnerable members (Gutmann et al. 2021), and reduce international trade (Crozet and Hinz 2020;Felbermayr et al. 2020;Gutmann et al. 2023a) and capital flows (Besedeš et al. 2017;Biglaiser and Lektzian 2011;Mirkina 2018). ...
... 1. Sanctions, for example, have adverse effects on the economy (Gutmann et al. 2023b;Neuenkirch and Neumeier 2015), increase economic inequality (Afesorgbor and Mahadevan 2016;Moteng et al. 2023;Neuenkirch and Neumeier 2016), harm the health of target populations -especially that of their most vulnerable members (Gutmann et al. 2021), and reduce international trade (Crozet and Hinz 2020;Felbermayr et al. 2020;Gutmann et al. 2023a) and capital flows (Besedeš et al. 2017;Biglaiser and Lektzian 2011;Mirkina 2018). ...
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In this first statistical analysis of how international sanctions affect international migration, we apply two estimation strategies, a panel difference-in-differences model and an event study approach. Our dataset covers 79,791 dyad-year observations, reflecting migration flows from 157 origin countries to 32 industrialized destination countries between 1961 and 2018. We find that UN and joint EU-US sanctions increase emigration from target countries by around 20 percent. Our event study results for joint EU-US sanctions imply a gradual increase in emigration throughout a sanction episode. The impact of UN sanctions on international migration is smaller and less persistent. Moreover, the effects are driven by target countries with limited freedom of political expression, where emigration substitutes for the costly voicing of dissent. Finally, there appear to be no systematic gender differences in the migration effect of sanctions.
... 1. Sanctions, for example, have adverse effects on the economy (Gutmann et al. 2023b;Neuenkirch and Neumeier 2015), increase economic inequality (Afesorgbor and Mahadevan 2016;Moteng et al. 2023;Neuenkirch and Neumeier 2016), harm the health of target populations -especially that of their most vulnerable members (Gutmann et al. 2021), and reduce international trade (Crozet and Hinz 2020;Felbermayr et al. 2020;Gutmann et al. 2023a) and capital flows (Besedeš et al. 2017;Biglaiser and Lektzian 2011;Mirkina 2018). ...
... 1. Sanctions, for example, have adverse effects on the economy (Gutmann et al. 2023b;Neuenkirch and Neumeier 2015), increase economic inequality (Afesorgbor and Mahadevan 2016;Moteng et al. 2023;Neuenkirch and Neumeier 2016), harm the health of target populations -especially that of their most vulnerable members (Gutmann et al. 2021), and reduce international trade (Crozet and Hinz 2020;Felbermayr et al. 2020;Gutmann et al. 2023a) and capital flows (Besedeš et al. 2017;Biglaiser and Lektzian 2011;Mirkina 2018). ...
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In this first statistical analysis of how international sanctions affect international migration, we apply two estimation strategies, a panel difference-in-differences model and an event study approach. Our dataset covers 79,791 dyad-year observations, reflecting migration flows from 157 origin countries to 32 industrialized destination countries between 1961 and 2018. We find that UN and joint EU-US sanctions increase emigration from target countries by around 20 percent. Our event study results for joint EU-US sanctions imply a gradual increase in emigration throughout a sanction episode. The impact of UN sanctions on international migration is smaller and less persistent. Moreover, the effects are driven by target countries with limited freedom of political expression, where emigration substitutes for the costly voicing of dissent. Finally, there appear to be no systematic gender differences in the migration effect of sanctions.
... 1. Sanctions, for example, have adverse effects on the economy (Gutmann et al. 2023b;Neuenkirch and Neumeier 2015), increase economic inequality (Afesorgbor and Mahadevan 2016;Moteng et al. 2023;Neuenkirch and Neumeier 2016), harm the health of target populations -especially that of their most vulnerable members (Gutmann et al. 2021), and reduce international trade (Crozet and Hinz 2020;Felbermayr et al. 2020;Gutmann et al. 2023a) and capital flows (Besedeš et al. 2017;Biglaiser and Lektzian 2011;Mirkina 2018). ...
... 1. Sanctions, for example, have adverse effects on the economy (Gutmann et al. 2023b;Neuenkirch and Neumeier 2015), increase economic inequality (Afesorgbor and Mahadevan 2016;Moteng et al. 2023;Neuenkirch and Neumeier 2016), harm the health of target populations -especially that of their most vulnerable members (Gutmann et al. 2021), and reduce international trade (Crozet and Hinz 2020;Felbermayr et al. 2020;Gutmann et al. 2023a) and capital flows (Besedeš et al. 2017;Biglaiser and Lektzian 2011;Mirkina 2018). ...
Article
Full-text available
In this first statistical analysis of how international sanctions affect international migration, we apply two estimation strategies, a panel difference-in-differences model and an event study approach. Our dataset covers 79,791 dyad-year observations, reflecting migration flows from 157 origin countries to 32 industrialized destination countries between 1961 and 2018. We find that UN and joint EU-US sanctions increase emigration from target countries by around 20 percent. Our event study results for joint EU-US sanctions imply a gradual increase in emigration throughout a sanction episode. The impact of UN sanctions on international migration is smaller and less persistent. Moreover, the effects are driven by target countries with limited freedom of political expression, where emigration substitutes for the costly voicing of dissent. Finally, there appear to be no systematic gender differences in the migration effect of sanctions.
... The impact of economic sanctions on petrostates and the resource curse phenomenon is a significant topic in politics and international affairs. Sanctions, imposed by governments and international organizations, can have profound effects on the economy (Neuenkirch & Neumeier, 2015;Ertimi et al., 2023). However, there has been relatively little research conducted on this subject. ...
... They are believed to place economic costs on their targets to change their behavior(Bapat& Morgan, 2013). The effectiveness of sanctions is influenced by the determinants of their efficacy, with higher aggregate economic costs being more successful (Afesorgbor & Mahadevan, 2016:Peksen & Son, 2015: Neuenkirch & Neumeier, 2015. ...
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Oil curse ams economic sanctions in russia
... If a substantial political goal, such as regime change, is considered, sanctions may only be effective when imposed against small or unstable countries (Hufbauer & Jung, 2021). It is also believed that only the toughest sanctions, such as those imposed by the UN and binding on all participating countries, can achieve their intended effect (Neuenkirch & Neumeier, 2015). However, the approach of assessing effectiveness based on achieving stated objectives can lead to false conclusions about ineffectiveness because it does not take into account the damage inflicted on the target country's economy. ...
... One of the primary targets of economic sanctions is a country's international trade. In addition to the obvious reduction in budget revenues, sanctions can lead to increased trade costs, exclusion from high-tech markets, loss of sales markets, and an expanded shadow economy (Neuenkirch & Neumeier, 2015). The trade balance, as well as exports and imports individually, are estimated using a gravity model of trade. ...
Conference Paper
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Recently, when analyzing the performance of trading companies, various multi-criteria decision-making methods are increasingly used individually or integrated. In this way, because several criteria are used integrally at the same time, it is better to get a realistic idea of the achieved performance compared to classical methods. Based on that, this paper analyzes the performance of trading companies in Serbia based on the DIBR and WASPAS methods. The results of the WASPAS method show that DELHAIZE SERBIA DOO BELGRADE is in first place. Next: LIDL SERBIA KD NOVA PAZOVA, MERCATOR-S DOO NOVI SAD, NELT CO. DOO BELGRADE, MOL SERBIA DOO BELGRADE, PHOENIX PHARMA DOO BELGRADE, MERCATA VT DOO NOVI SAD, OMV SERBIA DOO BELGRADE, LUKOIL SERBIA DOO BELGRADE and KNEZ PETROL DOO ZEMUN. Foreign retail chains are better positioned than domestic ones. They apply new business methods (multichannel sales - store and electronic, private label, sale of organic products, etc.) and the degree of digitization of the entire business is greater. Overall, under the positive influence of numerous macro and micro factors (favorable economic climate, efficient management of human resources, assets, capital, sales and profit, digitization of the entire business, etc.), the performance of trading companies in Serbia has improved. Keywords : performance, efficiency, factors, DIBR and WASPAS method, Serbian trade
... If a substantial political goal, such as regime change, is considered, sanctions may only be effective when imposed against small or unstable countries (Hufbauer & Jung, 2021). It is also believed that only the toughest sanctions, such as those imposed by the UN and binding on all participating countries, can achieve their intended effect (Neuenkirch & Neumeier, 2015). However, the approach of assessing effectiveness based on achieving stated objectives can lead to false conclusions about ineffectiveness because it does not take into account the damage inflicted on the target country's economy. ...
... One of the primary targets of economic sanctions is a country's international trade. In addition to the obvious reduction in budget revenues, sanctions can lead to increased trade costs, exclusion from high-tech markets, loss of sales markets, and an expanded shadow economy (Neuenkirch & Neumeier, 2015). The trade balance, as well as exports and imports individually, are estimated using a gravity model of trade. ...
Conference Paper
This paper provides a comprehensive overview of the methodologies used to assess the effectiveness of anti-Russian economic sanctions, with a focus on the challenges and opportunities associated with the use of these methodologies. Drawing on examples from global experience and Russia's experience between 2014 and 2021, the paper examines the methods for evaluation of the impact of sanctions on the economies of target countries, particularly Russia. While various negative effects of the sanctions have been identified, some positive effects have also been found. However, in 2022, the situation changed dramatically with the expansion of military actions and the imposition of unprecedentedly harsh economic sanctions, making it impossible to apply traditional methods of assessment. The limitations of using open data are outlined, including restricted access to national data, and the reasons why traditional methods may lead to false conclusions are discussed. Despite these limitations, it can be argued that the stock market may still provide an opportunity to evaluate the effectiveness of sanctions. A variety of techniques, such as event-driven analysis and heavy-tailedness returns analysis, can help to circumvent data limitations, and the availability of quoted prices will allow for further analysis of the sanctions. This paper highlights the methodological challenges and opportunities associated with assessing the effectiveness of anti-Russian economic sanctions and provides a valuable reference for researchers, policymakers, and practitioners interested in this topic.
... 'Do Sanctions Work?' There is persuasive evidence that economic sanctions can significantly damage economic growth, disrupt trading activities and hurt the welfare of a sanctioned country (Farzanegan & Hayo, 2019;Gharibnavaz & Waschik, 2018;Jacobson, 2008;Neuenkirch & Neumeier, 2015). In response to multilateral economic sanctions, a sanctioned country establishes a range of resistant, aggressive and impermanent policies aimed at mitigating hardships in the economy. ...
... Our analysis shows that firms should reduce their marketing costs to persist. Indeed, for many firms, marketing and advertising expenditures are considered as marginal expenses (Danaher & Rust, 1994) that are negatively affected by the crisis (Navarro, 2009) and reducing them may enhance the firm's short-term earnings. According to our results, decreasing production is another approach that firms should avoid. ...
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Given the importance of firm strategic management in time of crises, this study investigates Micro, Small, and Medium Enterprises (MSMEs) approaches to persistence during the international sanctions against Iran. Using data from a questionnaire of 486 firms between December 2019 to September 2020, we found that reducing research and development (R&D) expenditures, marketing costs, and fixed/overhead costs and investing in information technology (IT) are positively related to firm persistence. Conversely, managerial decisions to reduce production and cut or freeze staff pay have negative and significant impacts on a firm's ability to persist during sanctions. Moreover, micro firms are more resilient than their small and medium counterparts. The findings also confirm that age has a significant and positive impact on firm persistence. Finally, the results show that having a business plan, access to finance and technology, owner education, export orientation, business networking and consulting services are the key drivers of withstanding pressure from sanctions.
... The pressure from sanctions on the RF must be taken into account by this study. Work by Matthias Neuenkirch and Florian Neumeier confirmed the impact of these sanctions, which have led to a cumulative decline in scientific potential and a drop in the country's economic activity from 2.5 to 6% of GDP per year [Neuenkirch, Neumeier, 2015]. A decline of this magnitude in the country's GDP may trigger a reduction in funding for higher education. ...
Article
As the worldwide economic paradigm changes, higher education becomes an extremely important factor in ensuring a country’s scientific and technological sovereignty. This article compares the state of higher education in the Russian Federation (RF), the Republic of India (RI), and the People’s Republic of China (PRC) and ranks the development of their respective higher education systems in order to derive a model for advancing the innovative competitiveness of the RF’s institutions of higher education and to identify the components required to make them more competitive. Study of statistical data and regulations along with retrospective and systemic structural analysis indicate that program and process management is an innovative way to increase the competitiveness of universities. This result is grounded in a descriptive analysis of previous scientific studies, which substantiated the authors’ definition of what makes universities competitive. Comparison of the programs and projects implemented in the three countries examined leads to the conclusion that the RF should accelerate the creation of a wide network of program and project initiatives in higher education. Although a comparative analysis of the RF’s nationwide Project 5–100 and Priority 2030 program reveals certain problems in university management, it also establishes that applying existing regulations for strategic planning as well as for program project management in order to develop universities can assist in reaching the targets of Presidential Decree No. 145 dated 28 February 2024, entitled “Strategy for Scientific and Technological Development of the RF” (SSTD).
... Morozov notes that sanctions have acquired new features in the form of their application as independent measures aimed at political pressure, and cites the example of sanctions against the former Yugoslavia and Iraq in the 90s, taken by decision of the UN Security Council (Kehler, 2019). Nations as an important means of protecting the international community from the abuse of force, the right of the Security Council to impose economic sanctions is controversial, since it includes adverse consequences for the vulnerable population inside the delinquent country, although initially such measures were established to influence behavior A Government that acts contrary to international peace and security (Neuenkirch & Neumeier, 2015). ...
... The literature strand places the adverse effects of economic sanctions nearly to all economic activity. In the macroeconomic context, sanctioned countries experienced loss in the gross domestic product (GDP) and the gross national product (GNP) (Drezner, 2000;Gharehgozli, 2017), or the GDP growth rates (Neuenkirch & Neumeier, 2015). Sanctions influence international finance flows (Besedes, Goldbach, & Nitsch, 2017), harbinger of currency crises (Dreger, Kholodilin, Ulbright, & Fidrmuc, 2016;Peksen & Byunghwan, 2015), and volatile financial markets (Ankudinov, Ibragimov, and Lebedev 2017). ...
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This Electronic Monograph (E-Monograph) is interested to present the effects of the Russian-Ukrainian conflict and its impact on the world economy. This E-Monograph is divided into five chapters. The first chapter is explaining each chapter of this E-Monograph. The second chapter in this research aims to explore various scenarios of World War III under different levels of destruction, involving multiple opponents and global geographical locations simultaneously. We utilize the World War III Impact Simulator (WW3-Simulator) to assess the potential outcomes of WWIII, considering various degrees of war escalation and intensity, ranging from partial conflicts to full-scale warfare. In our study, we examine twelve potential areas of armed conflict in the context of WWIII, each involving different opponents across the world. These areas and their respective opponents are as follows: 1. Europe vs. Russia (C1); 2. China vs. Taiwan (C2); 3. South Korea vs. North Korea (C3); 4. Pakistan vs. India (C4); 5. Japan vs. China (C5); 6. Japan vs. North Korea (C6); 7. Greece vs. Turkey (C7); 8. Israel vs. the Middle East (C8); 9. U.S. vs. China (C9); 10. U.S. vs. Russia (C10); 11. U.S. vs. Russia Allies in Latin America (Cuba, Nicaragua, and Venezuela) (C11); 12. U.S. vs. Iran (C12). We consider varying degrees of military devastation to assess the economic damages resulting from these conflicts. This research employs maps and multidimensional graphs to provide a comprehensive evaluation of the economic consequences of WWIII. Ultimately, our study presents intriguing findings generated by the WW3-Simulator within a unified multidimensional graphical framework and across different timeframes. Finally, it's worth noting that we are utilizing Wolfram Mathematica for our calculations and forecasts. The third chapter shows the economic dimensions of a territorial military conflict. The Intraregional Trade Disruption from War Simulator (ITDW-Simulator) attempts to estimate the heterogeneous macroeconomic effects of the military conflict. The model suggests two primary indicators and four secondary indicators. The final trade suffocation index (TS-Index) and the final investment desgrowth from war function (〖-δ〗_w ) measure trade disruption’s potential impact on international trade patterns and economic development. The agriculture exports, industrial and manufacturing exports, service exports, and FDI flows capture the trade and investment interdependency. The model investigates the impact of the Russo-Ukraine military conflict on the bilateral trade and investment between the Russian Federation and the European Union. The fourth chapter evaluates the impact of any armed conflict on economic performance is substantial, but measuring this impact to gauge the intensity of its effects on inflation and unemployment is fraught with uncertainty. This paper aims to address this gap by introducing the War Economic Destruction Level Simulator (WEDL-Simulator), a new economic method designed to evaluate the impact of armed conflict on both inflation and unemployment simultaneously. Using five key indicators, the WEDL-Simulator draws from various analytical perspectives to assess the economic damage caused by the Russo-Ukrainian conflict. In this article, the global economy is used to demonstrate the applicability of the WEDL-Simulator, providing a coherent evaluation of the negative economic effects of the Russian invasion of Ukraine on world inflation and unemployment. Finally, the fifth chapter introduces a new economic simulator in the case of a war, this new economic simulator is entitled “The Post-War Economic Impact Simulator (PEI-Simulator).” The PEI-Simulator assesses the economic impacts of countries thorough the possible scenario of a partial or full war in three different stages: (i) pre-war stage; (ii) war stage; (iii) post-war stage. The analysis makes use of different indicators such as economic desgrowth from war (-δwar), war intensity (I), war losses (-Lwar), economic wear from war (Πwar), level of war tension (Twar), level of diplomatic negotiations (D), and the total economic leaking from war (Ωwar). Lastly, this research applies the PEI-Simulator to evaluate a possible full war between Russia and Ukraine.
... Assessing the global economic impact of sanctions on targets countries concentrates on tracking changes (after the introduction of sanctions) in gross domestic product (GDP), gross national product (GNP), the consumer price index (CPI) (Drezner 2000), or GDP growth rate (Neuenkirch and Neumeier 2015). However, the accumulative results of business contraction and other disruptions to the economy caused by sanctions vary from case to case (Biersteker and Van Bergeijk 2015). ...
Article
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This research delves deeply into the intricate dynamics of economic sanctions levied by Western nations against Russia, investigating their wide-ranging implications. Employing a blend of quantitative analysis and hypothesis testing, the study unravels a notable insight: these sanctions carry a more substantial impact on the economies of the sanctioning nations themselves than on Russia. The study introduces the "Mary-Jeanne" theory, developed by Professors Jeanne Kaspard Kamel and Richard Hanna Beainy from Holy Spirit University. This theory asserts that the inefficacy of the sanctions on Russia, and their subsequent repercussions on Europe, emanate from the targeting of essential raw materials, particularly oil and gas. The research recommends an alternative approach to sanctions, advocating for the utilization of Russian gas at a moderated price cap, rather than a complete embargo on the commodity as currently enforced. This strategic shift would seek to address the present situation, wherein Russia encounters relatively minor losses due to the low raw material value, while Western industrialized nations grapple with substantial declines in their economies due to the high finished goods' value.
... Economic sanctions inflict severe economic damage to both the sender and target countries due to reduced trade flows between countries and disruptions of international economic order and result in negative political consequences, especially on the target country, by threatening political stability and violating human rights (Allen and Lektzian, 2013;Hufbauer and Jung, 2021;Neuenkirch and Neumeier, 2015;Özdamar and Shahin, 2021;Peksen and Drury, 2010). Countries vulnerable to economic sanctions seek effective countermeasures to prevent and combat sanctions (Hackenbroich et al., 2020). ...
Article
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Economic openness and globalization are under rising pressure from the proliferation of economic sanctions over the past decades. Data-driven evidence is urgently needed to inform the heated debates about the effectiveness of various sanctions and counter-sanction measures. In this research, we provide a game theoretical framework to model the interplays between the sanction sender and target at different stages of political conflicts. Using real-world international trade data, our game-theoretical framework assesses each country’s capability of and vulnerability to economic sanctions and quantifies the feasibility and effectiveness of different counter-sanction measures. Our findings suggest that expanded international trade creates the potential to weaponize economic interdependence for giant economies, imbalanced trade relationships with which is the main source of sanction risk for vulnerable economies. Complete decoupling from these highly capable countries is a costly and ineffective strategy to combat economic sanctions. Bloc-type collective retaliation against the common adversary can be effective under certain scenarios but provides little benefit for major contributors in the bloc, making it impractical in addressing real-world conflicts. Promoting cooperation and dialogue is the ultimate solution to maintaining economic and political stability and security.
... Further, external conflict generally takes the form of either non-violent external pressure (in the form of international sanctions), violent external action (cross-border conflict), or a combination of the two. Recent studies have shown that external pressures such as international sanctions slow down economic growth (Neuenkirch and Neumeier, 2015;Splinter and Klomp, 2021) and reduce innovation (Fu et al., 2023), which it turn harms industrialization. Furthermore, government instability and the presence of the military in politics lead to disinvestment in productive sectors in favor of defense spending (Collier et al., 2003). ...
Article
Despite the growing concern about the economic costs of political risk, relatively little is known about its effect on industrialization. This paper fills the knowledge gap by investigating the impact of political risk on industrialization and relative transmission mechanisms using data from 34 African countries over the 2000-2019 period. Findings from Driscoll and Kraay (1998), system GMM, and quantile regression show that political risk has a direct negative impact on industrialization. When considering the sub-dimensions of political risk, results show that the increase in government risk, internal and external conflict risk, military politics risk, ethnic tensions risk, investment profile risk, corruption risk, bureaucratic quality risk, and socioeconomic risk adversely affect industrialization. Further, the mediation analysis reveals that political risk does not only have a direct effect on industrialization but also an indirect impact through its adverse effects on financial integration, financial development, and internet penetration. Finally, the net impact is negative and suggests that political risk hinders Africa’s industrialization.
... The context of the impact of sanctions on a target country's economy and their effectiveness in influencing existing policies is widely described in the literature on the subject (e.g., Neuenkirch, Neumeier, 2015;Oja, 2015;Doornich, Raspotnik, 2020;Silva, Selden, 2020;Harrington, 2022;Sedrakyan, 2022;Gaur et al., 2023;Meissner, Graziani, 2023). This issue has been receiving researchers' particular attention since the European Union imposed sanctions on Russia for its actions to destabilise the political situation in the eastern part and then in the whole of Ukraine (Jones, Whitworth, 2014;Romanova, 2016;Kazantsev, 2017;Doornich, Raspotnik, 2020;Gould-Davies, 2020;Tsououfas, Rochat, 2023, among others). ...
Article
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Although Russia’s economy appears immune to any actions taken by countries supporting Ukraine in its struggle to preserve its sovereignty, the sanctions project directed against Russia continues to evolve. The sanctions policy pursued by the European Union, the United States, and their allies is isolating the Russian economy, gradually leading to its ‘Sovietisation’. The primary purpose of this paper is to assess the impact of the sanctions on the economic situation of the Russian Federation. The paper is based on available statistical information provided by the Federal State Statistics Service (Rosstat) and Russian news media.
... В табл. 1 приведены примеры экономических последствий влияния санкций на экономику стран-инициаторов и стран, против которых санкции вводились. Наиболее универсальным показателем при оценке общих экономических последствий санкций является валовый внутренний продукт (ВВП) (Drezner, 2000, р. 90-91), а также темпы экономического роста (Neuenkirch, Neumeier, 2015). К примеру, санкции США против Китая незначительно негативно воздействовали на его экономику (Yang et al., 2004), в то время как санкции 2011-2014 гг. ...
... Numerous studies explore the political effects (for example , Marinov 2005;Bapat et al. 2016;Gutmann, Neuenkirch, and Neumeier 2020;McLean and Whang 2021) and the economic effects (for example, Hufbauer, Schott, and Elliott 1990;Caruso 2003;Kaempfer and Lowenberg 2007;Yang et al. 2009;Etkes and Zimring 2015;Neuenkirch and Neumeier 2016;Shin, Choi, and Luo 2016;Haidar 2017;Gharehgozli 2017;Afesorgbor 2019;Kavaklı, Chatagnier, and Hatipoğlu 2020;Crozet and Hinz 2020;Amodio, Baccini, and Di Maio 2021;Moghaddasi Kelishomi and Nisticò 2022;Ghomi 2022) on sanctioned states with a focus on the behaviors and costs suffered by the target. Overall, extant studies show that, in the majority of cases, sanctions decrease the target's economic activities, although the effect largely depends on the comprehensiveness and multilateral nature of the sanctions. ...
... Notably, Gurvich and Prilepskiy (2015) have demonstrated that sanctions can lead to a decline in the GDP of the target country by negatively impacting consumption and investment, causing a contraction in sectors dependent on imported components, and diminishing the overall productivity potential of production factors. Additionally, Neuenkirch and Neumeier (2015) argue that sanctions affect the economic performance of countries through multiple channels, including declines in both imports and exports, a loss of bargaining power in international markets, reduced foreign direct investment, and a decrease in international aid. Consequently, it is evident that sanctions typically result in a reduction in the GDP of the target countries. ...
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Improving energy efficiency is vital for curtailing energy consumption and can have substantial impacts on alleviating carbon emissions. This study investigates the impact of sanctions on Iran's energy efficiency across different industrial sub-sectors from 2015 to 2019. We compute a sanctions index for each industrial sub-sector by using Principal Component Analysis (PCA). This index measures how much each sub-sector has been affected by sanctions. Additionally, energy efficiency is measured using the Directional Distance Function (DDF) method, considering the environmental impacts as undesirable outputs. We examine the effect of the degree of the sanctions indicator on energy efficiency using feasible generalized least squares (FGLS) estimation, controlling for other drivers of efficiency. Our results show a one standard deviation increase in sanctions index results in a decline of about 3% in sub-industrial energy efficiency.
... Financial sanctions are relatively new, and they tend to take advantage of globalisation, they target the concept of globalisation in currencies, financial flows and insurance patterns. In empirical research conducted by Neuenkirch and Neumeier (2015) they learned that the multilateral sanctions5 imposed by UN on target countries have a direct negative effect on their GDP growth rate, however, this influence tends to reduce in 10 years. Moreover, in the same study, they showed that unilateral sanctions6 from the US has a negative effect on GDP growth rate, however, the scale of the effect is smaller than the multilateral UN sanctions. ...
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The question of the effectiveness of economic sanctions has been discussed in many ways and it has many different arguments from various scholars. Throughout history, there have been many successful and unsuccessful sanctions performed. When there is a conflict between two countries some governments believe that wars may be too costly and may cost civilians lives, therefore, they prefer the use of economic tools. Therefore, the question of the effectiveness of these sanctions has put a bold question mark in people’s mind. Many examples of sanctions can be used but Iran and the United States of America (USA) have one of the greatest economic wars in the history. On the other hand, understanding how an economic coercion can lead to a currency, as well as an inflation crisis, is another concern for economists. This paper aims to understand the sanctions relationship with different types of financial crisis.
... Daniel Drezner makes the seemingly surprising and controversial observation in his study that although sanctions are imposed on hostile states, they are in fact much more effective against allies (Drezner, 1999). A similar argument is made by a pair of authors, who conclude that multilateral UN sanctions tend to have a stronger impact on GDP growth in the target country than sanctions imposed by a single country (Neuenkirch, & Neumeier, 2015). Larger scale and multilateral sanctions have a greater impact on financial stability due to the possibility of 'speculative attacks' based on the political risks associated with sanctions (Peksen, & Son, 2015). ...
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In August 2014, the Russian Federation imposed counter-sanctions against Western countries imposing restrictions against Russia following its aggression against Ukraine. It is worth examining to what extent the counter-sanctions have transformed the trade network between the countries. This study aims to show the impact of this embargo on apple import on the global trade network due to the Russian response to the Western countries’ measures in 2014. We chose the methodology of network research to examine the changes in trade networks. We analyzed the apple trade network because this was one of the significant fields impacted by the trade restrictions and panic reactions from EU producers imposed on the sanction. This research shows that Russian import was also impacted negatively, but some third countries are quickly becoming the winners of the restrictions. Serbia and Azerbaijan were the clear winners of the sanctions. The research results show that network research methodology is suitable for examining the sanctions’ effects.
... Accordingly, the literature on unintended consequences of sanctions developed rather quickly, with studies focusing on humanitarian consequences, such as the incidence of humanitarian crises (Cortright et al., 1997), or deterioration of women's status (Drury and Peksen, 2014), political consequences in the target regime such as level of repression on the populace (Wood, 2008;Grauvogel and von Soest, 2014) or destabilization of the target regime (Marinov 2005;Escribà-Folch and Wright, 2010). Ironically, the line of research on the unintended economic consequences of economic sanctions initiated a little later than similar lines of research on humanitarian and political consequences, with studies showing longer-term adverse effects of sanctions on GDP (Neuenkirch and Neumeier, 2015), FDI inflows (Mirkina, 2018;Lektzian and Biglaiser, 2013), and the probability of financial crises (Peksen and Son, 2015;Hatipoglu and Peksen, 2018). ...
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Geopolitical crises, and economic sanctions, in particular, have created considerable disturbance in natural resource markets. This study focuses on a significant consequence of this disturbance, namely how sanctions may derail targeted states from their low-carbon pathways. Increasing capital costs and difficulties in accessing technology force sanctioned states to move away from capital-and technology-intensive greener alternatives to employ more carbon-intensive (predominantly coal) generation modes in their primary energy supply. We also show that the recovery process from sanctions further increases coal use in these targeted states. Our econometric results from a global cross-sectional time-series dataset support our expectations. Our findings call for a deeper understanding of the challenges in achieving sustainable recovery in the aftermath of geopolitical crises. These results call for assessing carbon-footprint implications of specific foreign policy actions before these actions are carried out.
... They also find no recovery during the first three years following the removal of sanctions. Neuenkirch and Neumeier (2015) focus on UN and U.S. economic sanctions and their effects on GDP growth. They use panel fixed effects regression for a sample of 160 countries (of which 67 experienced economic sanctions) in between 1976 and 2012. ...
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This paper surveys the literature on the economic effects of sanctions on Iran, with a principal focus on those imposed after 2006. We discuss the challenges of isolating the impacts of sanctions and evaluate recent methodological approaches used to measure causal effects. Specifically, we focus on the application of the synthetic control method to disaggregate the exogenous and endogenous factors responsible for economic underperformance in Iran. We review studies on the macroeconomic impacts of Iran sanctions and examine those that focus on the sectoral effects of sanctions. Our survey reveals a large and growing body of literature that remains incomplete. There are significant gaps in the existing research on the impact of sanctions. Iran will likely remain the most important case study as researchers seek to fill those gaps.
... от потенциальных темпов роста ВВП, а при введении торгового эмбарго -около 6 п.п. [Neuenkirch, Neumeier, 2015] из-за ограничений возможностей внешней торговли, сокращения объемов доступных предприятиям рынков товаров, финансов и технологий. ...
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Земцов С.П., Баринова В.А., Михайлов А.А. Санкции, уход иностранных компаний и деловая активность в регионах России // Экономическая политика, 2023, том 18, № 2, с. 44-79 ||| Несмотря на ограничение доступных для предпринимателей рынков и разрыв цепочек поставок, значения многих индикаторов деловой активности в России в 2022 году не снизились. При этом различия между регионами в реакции на внешние шоки существенны. С помощью эконометрических расчетов показаны факторы, повлиявшие на динамику наиболее оперативного показателя деловой активности — роста числа новых предприятий малого и среднего бизнеса. Во-первых, более высокие значения показателя наблюдались в регионах, где менее тесными были экономические связи со странами, вводившими санкции. В некоторых сырьевых регионах на эти страны ежегодно приходилось более 80% экспорта и импорта. Во-вторых, уход из России ряда компаний мог освободить отдельные рыночные ниши (в торговле, IT, иных услугах и в обработке): объем выручки предприятий из стран, признанных недружественными, составлял около 16 трлн руб., или около 1/10 части рынка. Гипотеза, что этот объем выручки положительно повлиял на число вновь созданных малых и средних предприятий через механизм освобождения рыночных ниш, подтвердилась условно и со слабым уровнем значимости. В-третьих, одним из инструментов адаптации к кризису, как и в период пандемии, оказался онлайн-сектор — благодаря распространению торговых интернет-площадок и разрешению параллельного импорта. В регионах, где бизнес и население активнее пользовались заказами товаров и услуг через интернет, динамика создания новых предприятий была выше. Подтвердилась гипотеза, что близость к недружественным странам повлияла на деловую активность в соответствующих приграничных регионах отрицательно. И наоборот, положительным фактором стало соседство с Грузией и Азербайджаном в связи с переориентацией потоков товаров и туристов. Также благоприятно влияло наличие в регионах крупных агломераций — благодаря масштабу и разнообразию рынков. Наблюдения позволили сделать ряд рекомендаций. ||| Despite the limited markets now available to entrepreneurs and the disruption of supply chains, many indicators of business activity in Russia did not decrease in 2022. However, there are significant differences between regions in their response to these external shocks. The article evaluates factors that brought about changes in the most pertinent indicator of business activity – the growth in the number of new small and medium-sized businesses. First, in regions where economic ties with the countries that imposed sanctions were weaker, there were more such new businesses. In some regions that produce raw materials, those countries annually accounted for more than 80% of exports and imports. Second, the withdrawal of companies from Russia may open up certain market niches (in trade, IT, other services, and processing). The revenue of enterprises from countries deemed unfriendly by the Russian government was about 16 trillion rubles, or about one tenth of the market. The hypothesis that this amount of revenue had a positive effect on the number of newly created small and medium-sized enterprises because of less competition in certain market niches was confirmed provisionally and with a low degree of significance.Third, just as the online sector provided one way of adapting to a crisis during the pandemic, the ubiquitous reach of online trading platforms along with access to parallel imports came into play. In regions where businesses and the public placed more orders for goods and services via the internet, more new enterprises were created. The hypothesis that proximity to unfriendly countries had a negative impact on business activity in the regions at their borders was confirmed. And vice versa, the proximity to Georgia and Azerbaijan had a positive effect as the flow of goods and tourists was redirected toward the North Caucasus. The scale and diversity of markets due to large economic agglomerations in the regions was also beneficial. These observations bear on a number of recommendations.
... When this occurs, it endangers financial stability while also provoking foreign exchange crises (Peksen & Son, 2015) [13]. It harms the economic growth of the targeted country (Neuenkirch & Neumeier, 2015) [3]. Researchers looked into how and when economic sanctions were implemented (Hovi, Huseby, & Sprinz, 2005;Marinov, 2005) [14], [15], why they did not work (Pape, 1997) [16]. ...
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This study assesses the impact of economic sanctions on oil exports and economic growth through case studies of Libya. By setting up a synthetic group method that reproduces the oil exports and economic growth of the case study before the imposition of economic sanctions, we compare the oil exports and the economic growth of the Synthetic and the actual for each period. We address a crucial gap in the literature of sanction in a petrostate case study using the synthetic control approach. Our analysis found that both petroleum exports and economic growth were lower with economic sanctions. This research is integrated into the comparative and international landscape of international influence relations with the domestic economy. Economic sanctions, the results show, are the key driver in fluctuations in oil exports and economic growth that might be represented in the oil curse. We believe that our empirical research can contribute to domestic and international policy formation by sanctioned countries. Overall, the findings confirm that sanctions may be imposed on Libya as another channel of the resource curse from the global and foreign policy perspectives.
... Finally, our paper relates to previous research on the economic effects of sanctions on targeted countries. In empirical studies, a wide range of outcome variables are analyzed, including trade (Haidar 2017;Besedeš, Goldbach, and Nitsch 2022), cross-border financial flows (Besedeš, Goldbach, andNitsch 2017, 2021), and economic growth (Neuenkirch and Neumeier 2015). Hufbauer et al. (2007) and Biersteker, Tourinho, and Eckert (2016) study the design and effectiveness of sanctions as a policy instrument. ...
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Using regulatory data, we study German bank lending in countries targeted by financial sanctions. We find that domestic banks in Germany reduce lending in sanctioned countries, whereas their foreign bank affiliates outside Germany increase lending. In some cases, this is because the bank affiliates’ host countries have not imposed sanctions themselves. However, even German bank affiliates in host countries that enact sanctions like Germany increase lending if these host countries lack strong institutions and anticrime policies. These findings suggest that even universally adopted sanctions distort bank capital flows and competition if the level of their enforcement varies across bank locations. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online
... Studies investigating the effects of international economic sanctions on the economy of the sanctioned state document significant negative effects on GDP growth (Hufbauer et al. 2009;Neuenkirch and Neumeier 2015), international trade (Afesorgbor 2019; Haidar 2017), foreign direct investment (FDI) (Mirkina 2018), employment (Etkes and Zimring 2015; Moghaddasi Kelishomi and Nisticò 2022), and human capital (Chakravarty et al. 2021;Moeeni 2022). There is also evidence that sanctions lead to increases in poverty and inequality (Afesorgbor and Mahadevan 2016;Neuenkirch and Neumeier 2016) and in corruption and illicit economic activities (Andreas 2005;Bove et al. 2021;Crozet et al. 2021;Farzanegan 2013;Slavov 2007). ...
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This paper examines how trade sanctions affect the allocation of workers across formal and informal employment. We analyse the case of the unexpected and unprecedented trade sanctions imposed on Iran in 2012. We use a difference-in-differences approach and compare the probability of working in the informal sector before and after 2012 for individuals employed in industries with pre-existing different levels of exposure to international trade. Combining employment data from the Iranian Labour Force Survey and trade data from Iran’s Customs Administration database for the years 2008–14, we find that workers employed in industries initially facing higher exposure to trade are significantly more likely to experience informal employment in the years after 2012 than workers employed in industries with lower trade exposure. This result suggests that, in the short run, the informal sector may absorb a significant fraction of workers displaced by the trade shock caused by the sanctions. We estimate that the increase in informal employment is highest for poorly educated workers, highlighting the unequal labour market consequences of trade sanctions. We exclude that industries differentially exposed to international trade were already following a different trend in the share of informal employment in the years prior to 2012, thus providing empirical support for the validity of our identification strategy. Moreover, we show that our main result holds when accounting for potential sorting issues by an instrumental variable approach. Our findings shed light on a potentially important dimension of labour reallocation whereby trade sanctions can affect the economy of the target country. They also provide important implications for policies designed to address informal employment and to assist trade-displaced workers.
... Focusing on Russian firms during the same period, Ahn and Ludema (2020) find that smart sanctions hurt targets. Taking a broader perspective, Neuenkirch and Neumeier (2015), Neuenkirch and Neumeier (2016), and Gutmann et al. (2020) quantify the effects of sanctions on growth, poverty, and human rights, respectively. Crozet et al. (2021) explore the impact of sanctions on senders by linking them to the export decisions of firms, whereas Besedeš et al. (2021) quantify the impact of financial sanctions. ...
... Concerns about the effects of sanctions on vulnerable populations have occupied a prominent place in the literature on economic statecraft. A growing literature has argued that sanctions have adverse effects on outcomes across a broad range of human development indicators ranging from per capita income (Neuenkirch and Neumeier, 2015;Spinter and Klomp, 2021), poverty (Neunenkirch and Neumeier, 2016), and inequality (Afersogbor and Mahadevan, 2016) to public health (Peksen, 2011;Petrescu, 2016;Allen and Letskian, 2012) and human rights (Wood, 2008;Peksen, 2011). ...
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We revisit the results of a recent paper by Equipo Anova, who claim to find evidence of an improvement in Venezuelan imports of food and medicines associated with the adoption of U.S. financial sanctions towards Venezuela in 2017. We show that their results are consequence of data coding errors and questionable methodological choices, including the use an unreasonable functional form that implies a counterfactual of negative imports in the absence of sanctions, the omission of data accounting for four-fifths of the country's food imports at the time of sanctions and incorrect application of regression discontinuity methods. Once these errors are corrected, the evidence of a significant improvement in the level and rate of change in imports of essentials disappears.
... The adverse effects could be much larger [40][41][42], for differences across member states in the energy mix and the share of energy inputs that originate in Russia. How it affects different sectors is likely to vary according to their dependency on energy imports from Russia and scope to obtain alternative energy supplies or reduce demand. ...
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The recent economic sanctions against Russia can jeopardise the sustainability of the European Union’s (EU) energy supply. Despite the EU’s strong commitment to stringent abatement targets, fossil fuels still play a significant role in the EU energy policy. Furthermore, high dependency on Russian energy supplies underlines the vulnerability of the EU energy security. Using a global computable general equilibrium model, we prove that the current EU embargo on coal and oil imported from Russia will have adverse supply effects, substantially increasing energy prices and welfare costs for the EU resident. Although it reduces emissions, extending the embargo to include natural gas doubles this welfare cost. The use of coal is likely to increase, especially with respect to EU electricity generation, given the current constraints of additional import capacities from non-Russian producers. The impact on Russia once the EU extends the sanctions to natural gas is less substantial than on the EU. Russian welfare cost will increase less than 50%, indicating that extending the current restriction to boycott Russian gas is a costly policy option.
... On the one side, it is broadly accepted that ESs can cause an adverse economic impact on the sanctioned country. For instance, Neuenkirch and Neumeier (2015) showed that the UN and US sanctions impede the target country's growth rate of real GDP per capita by about 1%-2%. On the other side, the use of ESs is strictly criticised because the average success rate is just about 34% across various policy objectives (Felbermayr, Kirilakha, et al., 2020) or, even worse, is counterproductive. ...
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The supply chain disruption drives the firms to source the same inputs from multiple suppliers in low‐cost countries. However, the imposition of economic sanctions may prevent firms from enjoying diversification benefits of global sourcing complexity. Using data for more than 127 countries from 1997 to 2014, we uncover the effects of economic sanctions on the global sourcing complexity. After extensive robustness checks, our main findings reveal that economic sanction hampers global sourcing complexity. These effects are conditional on the level of economic development and the occurrence of financial crises in a particular country. Our results are robust for various forms of economic sanction, alternative estimators, and when controlling endogeneity problems. Our findings suggest important foreign policy and managerial implications for the countries and firms in response to economic sanctions.
... 3 Studies have documented that the economic sanctions have direct adverse effects on trade (Afesorgbor, 2019;Caruso, 2003;Hufbauer et al., 2008;Yang, Askari, Forrer, & Teegen, 2004) and negatively influence macroeconomic variables. Some studies have illustrated that economic sanctions contract real sectors and reduce economic growth (Evenett, 2002;Hufbauer et al., 2008;Neuenkirch & Neumeier, 2015). 4 Sanctions increase net capital outflows of targeted states by rising political risks and leading to currency depreciation. ...
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This paper examines whether financial constraints of firms influence their pricing behavior. To do so, a product-level dataset is used from Iranian-listed manufacturing companies. This study employs the imposition of international sanctions against Iran in 2012 as an exogenous shock to identify the effect of financial constraints. According to the results financially restricted firms keep their prices lower than their counterparts to increase their internal financial resources. The results show the difference between output prices of constrained and unconstrained firms rising after the imposition of sanctions. In addition, this relationship is affected by the degree of export-orientation of firms, and only exporter firms that experienced the negative demand shock after the sanctions, set their price lower to reduce the financial pressures. Also, the degree of dependency on imported input does not play a significant role in the relationship and ownership structure of firms has a significant impact on the relationship.
... Sanctions are already shown to have adverse effects on democracy and human rights (Escribà-Folch & Wright, 2010;Peksen, 2009;Peksen & Drury, 2010;Wood, 2008), public health (Allen & Lektzian, 2013;Peksen, 2011), life expectancy (Gutmann, Neuenkirch, & Neumeier, 2021), childhood mortality, maternal mortality, and malnutrition in babies (Ali & Shah, 2000), along with income inequality and poverty (Afesorgbor & Mahadevan, 2016;Choi & Luo, 2013;Lee, 2018;Neuenkirch & Neumeier, 2016). They also have adverse effects on economic growth (Neuenkirch & Neumeier, 2015), international trade (Afesorgbor, 2019;Caruso, 2003;Crozet & Hinz, 2020;Felbermayr, Syropoulos, Yalcin, & Yotov, 2019;Yang, Askari, Forrer, & Teegen, 2004), capital flows (Besedeš, Goldbach, & Nitsch, 2017), foreign direct investments (Mirkina, 2018), and banking (Hatipoglu & Peksen, 2018), as well as exchange rate volatility (Dreger, Kholodilin, Ulbricht, & Fidrmuc, 2016;Laudati & Pesaran, 2021;Wang, Wang, & Chang, 2019). In sum, these findings suggest that sanctions impose significant human and social costs, in addition to direct economic and political costs. ...
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International sanctions have significant economic effects with long‐lasting negative consequences for human development. However, academic research on the gendered effects of sanctions is scarce. In fact, most work on sanctions has been either gender neutral or gender blind. This article examines the labor market effects of economic and noneconomic sanctions, imposed by the United States and the United Nations, on male and female employment in manufacturing industries in Iran. The empirical analysis is based on four‐digit industry‐level employment data from 102 manufacturing industries between 1995 and 2014. Our main findings suggest that international sanctions have disproportionate effects on male and female employment. In particular, we find that sanctions hurt female employment significantly more than male employment. This effect is further compounded in industries that are more capital intensive, where labor compensation has a relatively low share in value added. Furthermore, in industries with relatively high reliance on imported inputs, female employment suffers more from sanctions.
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The article provides a complex review of methods, which can be used to assess efficiency of anti-Russian economic sanctions focusing on problems and opportunities dealing with their application. The relevant global experience and experience of Russia in 2014-2021 were used to resolve problems of sanction classification and the idea of sanction effectiveness, as well as assessing sanction impact on economy and certain markets of target-countries, for example Russia. Apart from identifying negative aftereffects of sanctions, positive consequences were also shown. In 2022 the situation drastically changed due to unprecedented harsh economic sanctions introduced against Russia, which made the use of traditional methods of appraisal impossible. The author described restrictions of using open data, including the access to national indicators and explained why traditional methods can lead to false conclusions. In spite of new challenges for researchers, stock market still provides certain possibilities for assessing sanction impact on Russian economy.
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The present article aims to investigate the effect of economic sanctions on Iran's trade mix with its major trading partners with an analytical approach. The method used in this study is panel data, the software used is Eviewes 10, and the model considered in this research is the generalized gravity model, which investigates and analyzes the effect of independent variables on the share of trade during the period of 1371 to 1400. The variables examined in this research include gross domestic product, population, real bilateral exchange rate, distance and the virtual variable of sanctions in three types: weak (LIM), medium (MED) and strong (EXT). The results of the research show that the product of the GDP of Iran and its trading partners, the product of the population of Iran and its trading partners and the real bilateral exchange rate are 2.50, 0.37 and 2.04, respectively, which have a positive and significant effect on the share of trade. Also, the distance at the rate of 1.16 and the virtual variables of sanctions with low, medium and strong intensity respectively at the rate of 2.03, 3.30 and 4.007 have had a negative and significant effect on the share of Iran's trade and major trading partners.
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UNSC sanctions have been referred to as a powerful tool increasingly used by the UNSC to maintain international peace and security based on Chapter VII of the United Nations Charter. This study conducts a bibliometric analysis to provide a comprehensive overview of the current research status, developments trends, and research hotspots in UNSC sanctions research from 1990 to 2023. This study uses CiteSpace to visualize and analyze datasets of 345 articles about UNSC sanctions obtained from the Web of Science (WOS) database. The research on UNSC sanctions has three stages: the initial development stage (1990–2006), the transitional development stage (2007–2017), and the rapid development stage (2018–2023). This study describes UNSC sanctions research status, trends, hotspots, and distributions of publications by journal sources, disciplines, countries, institutions, and authors. It also describes the knowledge-based mapping and research hotspots on UNSC sanctions, including keywords, citation burst, keyword clusters, keyword clusters timeline view, cited references, intellectual base, and descriptive analysis. In addition, this study analyzed UNSC sanctions research divided into four domain categories: implementation, human rights, impacts, and specific regimes. The results showed that the topic of UNSC sanctions was multidisciplinary research and that scholars from different research disciplines had different focuses on UNSC sanctions. This study offers valuable insights into the current hot topics within the field of UNSC sanctions and offers recommendations for future research directions.
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Економічні санкції ЄС проти росії та їх ефективність є актуальним дослідженням, що розглядає вплив санкцій на російську економіку та політику. Метою дослідження є обґрунтування ефективності застосування економічних санкцій ЄС проти росії, зокрема визначення їх впливу на економічну ситуацію країни-агресора, включаючи зміни у ВВП, експортно-імпортних операціях, стан фінансового сектору та інші економічні показники. В ході дослідження ідентифіковано ключові аспекти, які впливають на ефективність економічних санкцій: політична підтримка, міць об’єкта санкцій, відповідність санкцій конкретним цілям, ефективне застосування санкцій, альтернативні варіанти для країни-адресата, часовий аспект, вплив на населення. Також визначено характер впливу санкцій: перешкоджання торгівлі, фінансові обмеження, економічний спад, гуманітарний вплив, зміна альянсів та економічних відносин, довгострокові економічні наслідки, глобальні економічні наслідки, адаптивне реагування, та обґрунтовано, що вплив санкцій може сильно відрізнятися залежно від економічної стійкості країни-об’єкта, її здатності до адаптації, обсягу та суворості санкцій, а також глобальної геополітичної динаміки. Здійснено аналіз заходів, запроваджених ЄС у контексті санкцій, включаючи обмеження доступу до фінансових ринків, секторальні обмеження в торгівлі та санкції проти окремих осіб чи компаній. Автори проаналізували ефективність санкцій з позиції досягнення політичних цілей ЄС у контексті війни в Україні, а також їх вплив на економічну ситуацію в росії. Виявлено, що в найближчі роки прогнозується зростання ВВП росії, що свідчить про недостатню ефективність санкцій, що запроваджуються та діють щодо економіки країни-агресора. Крім того, результати дослідження дозволили оцінити динаміку взаємовідносин між ЄС та росією в контексті санкційної політики та їх можливий вплив на економічні та політичні процеси в обох регіонах.
Technical Report
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This report aims to contribute with knowledge and recommendations for Norwegian policymakers’ effort to prevent, uncover, and manage economic activity in Norway that threatens national security. Our report poses two research questions: (1) What does the academic literature say about the effects of economic statecraft? (2) (2) What are the implications of this knowledge for the Norwegian government’s efforts to reduce security challenges from economic activity? We establish an analytical framework to understand the effects of economic statecraft. From this analytical framework, we deduce categories of effects, depending on whether the subject perspective is that of the sender or the recipient state, and whether the results are perceived as gross or net for the subject. The framework strengthens our ability to utilize findings and conclusions in the literature on effects of economic statecraft in a national security context. The research on effects of economic statecraft is heavily concentrated on the topic of formal, negative economic sanctions, but also on informal, negative sanctions, positive sanctions, manipulation of access to economic networks, long-term engagement, and transfers of military technology. The research on sanctions and other economic statecraft instruments is primarily concerned with whether the sender state achieves its political objectives. There are also numerous studies on the political, economic, and social gross results for recipient states in the literature. Less attention is devoted to net results. We offer the following six recommendations to the Norwegian government: 1. Norway should use a diverse set of tools to prevent, uncover, and manage economic activity that threatens national security. 2. Norwegian authorities should involve commercial actors, raise awareness about threats and challenges in the private sector and offer advice and directions on managing them. 3. Norwegian authorities should pursue international cooperation. 4. The knowledge about costs and trade-offs of economic statecraft should be improved. 5. Threats and vulnerabilities from economic activity that threatens national security should be assessed in connection to other types of threats and vulnerabilities. 6. The research on effects of economic statecraft in light of the rapid technological development should be strengthened.
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We analyse the effects of sanctions implemented by the European Union against Russia following the latter’s annexation of Crimea in 2014. Indirect effects of sanctions on its non-prohibited exports to Russia are examined using a gravity model of trade that includes a time varying sanction index. A per country analysis is also incorporated to increase the granularity of the results. We find that sanctions led to a decrease in exports of non-prohibited products from certain European countries (i.e., the “losers”) while increasing such exports from others (i.e., the “winners”), an outcome that qualifies as an “unintended consequence” of the sanctions.
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Tarihsel süreçte dış politika ve askeri müdahale seçenekleri arasında bulunan ve rakibin gücünü zayıflatmak amacıyla kullanılan yaptırımlar, son dönemlerde daha fazla tercih edilir olmuştur. Yaptırımlardan temel beklenti, hedef ülkenin siyasi, ekonomik ya da askeri bir konuda davranışlarını değiştirmesi ya da belirli faaliyetlerden kaçınmasını sağlamaktır. Bu amaçla hedef ülke siyasi ve ekonomik olarak baskı altına alınmaktadır. Yaptırımların siyasi ve ekonomik olmak üzere iki uygulama alanı bulunmaktadır. Bu çalışmanın konusu olan İslam Devrimi sonrası İran’a yönelik yaptırımlar, farklı boyutlarda uygulanmıştır. 2006 yılından itibaren ABD’ye ek olarak uluslararası toplumun ve 2012 yılından sonra AB’nin desteğiyle yaptırımların İran ekonomisi üzerindeki etkisi çok daha fazla hissedilir olmuştur. 2015 yılında imzalanan Nükleer Anlaşma’nın ardından İran ile başta ABD olmak üzere uluslararası toplum arasında normalleşme beklenirken, Mayıs 2018’de anlaşmanın ABD tarafından tek taraflı iptal edilmesi sonrasında yaptırımlar tekrar ve daha şiddetli bir şekilde uygulanmaya başlanmıştır. Bu çalışmada, ABD’nin İran’a yönelik İslam Devrimi’nden sonra uyguladığı ekonomik yaptırımların etkilerinin ortaya konması amacıyla İran’ın 1978-2020 dönemine ait başlıca ekonomik göstergeleri ve dış ticaret verileri tanımsal analizlerle incelenmektedir. Yaptırım uygulanmaması ve planlanan ekonomik büyümesini sürdürmesi halinde İran ekonomisindeki muhtemel gelişmeler analize dâhil edilmiştir. Yapılan analizler sonucunda, özellikle 2012 sonrasında uygulanan ekonomik yaptırımların İran ekonomisini derinden etkilediği görülmüştür. Mevcut veriler dikkate alındığında, Mayıs 2018 sonrasında ABD’nin aldığı yaptırım kararlarının İran ekonomisinde daha fazla olumsuzluğa yol açabileceği ve İran’ın dış ticaret ortaklarına yansımasının değişik boyutlarda olabileceği öngörülebilir.
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We investigate the effect of economic sanctions on trade flows in countries sharing a border with sanctioned states. According to trade models, sanctions are expected to reduce trade flows as they disrupt established trading routes and economic relationships with suppliers and customers. However, there may also be instances where countries circumvent trade restrictions by clandestinely exchanging goods with sanctioned countries across the border and trading on their behalf, leading to an increase in imports and/or exports. To shed light on this issue, we employ a combination of large-N panel data analysis and comparative case studies using the synthetic control method. We find that, in the aggregate, neighbouring countries experience economic costs as sanctions disrupt trade. Yet, case studies uncover heterogeneity in countries’ responses, with some cases exhibiting an increase in trade flows. We discuss possible explanations for these outcomes in the case-study analysis.
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Introduction Economic sanctions restrict customary commercial and financial ties between states to induce change in political constitution or conduct of the targeted country. Although the stated goals of sanctions often include humanitarian objectives, prospective procedures for health risk assessment are not regularly incorporated in their implementation. Moreover, past experience suggests that the burden of economic isolation may fall on the civilian population. We present key findings from a WHO-sponsored evidence review on the impact of economic sanctions on health and health systems in low-income and middle-income countries, aiming at comprehensive coverage and explicit consideration of issues of causality and mechanisms. Methods Broad searches of PubMed and Google Scholar (1970–2021) were designed to retrieve published and grey English-language literature expected to cut across disciplines, terminology and research methods. Studies providing an impact estimate were rated by a structured assessment based on ROBINS-I risk of bias domains, synthesised via vote counting and contextualised into the broader literature through a thematic synthesis. Results Included studies (185) were mostly peer-reviewed, mostly single-country, largely coming from medicine and public health, and chiefly concerned with three important target countries—Iraq, Haiti and Iran. Among studies providing impact estimates (31), most raised multiple risk-of-bias concerns. Excluding those with data integrity issues, a significant proportion (21/27) reported consistently adverse effects of sanctions across examined outcomes, with no apparent association to assessed quality, focus on early episodes or publication period. The thematic synthesis highlights the complexity of sanctions, their multidimensionality and the possible mechanisms of impact. Conclusion Future research should draw on qualitative knowledge to collect domain-relevant data, combining it with better estimation techniques and study design. However, only the adoption of a risk assessment framework based on prospective data collection and monitoring can certify claims that civilians are adequately protected.
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The article analyzes the positions of the world's leading economies in global value chains since the 60s of the XX century. The features of the formation of modern key centers of production chains, including China, the USA and Germany, are reflected. The analysis of the share of participation of ten leading economies of the world and Russia in global value chains, including in such sectors of the economy as agro-industrial, industrial, construction, services and mining, was carried out. It was revealed that in all the sectors of the economy considered, China managed to reach the first positions, with the exception of the mining sector, where the leading positions remain for the United States, followed by Russia. It is established that the decline in the share of developed economies in global value chains has led to the introduction of sanctions against those countries whose economic opportunities and prospects have served as a threat to the sustainable development of the former, primarily against China and Russia. The analysis of the transformation of Russia's trade relations with key partners has been carried out since 2013, when the dependence of the Russian economy on imports was maximum and at the same time the Western bloc of countries imposed the first sanctions against our country. Possible prospects for further development of both the Russian economy and other countries playing a key role in the future formation of the entire world economy are presented.
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Motivated by the claim that China and Russia purposefully and systematically undermine Western sanction efforts, we study the effects of US and EU sanctions on trade flows between sanctioned and third countries during the period 2002–2019. We find no evidence of systematic sanction busting by Russia. For China, our results are more ambiguous. While we do not find robust evidence for an increase in overall trade between China and countries targeted by Western sanctions, trade in (raw) materials and critical goods increases notably.
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Motivated by the claim that China and Russia purposefully and systematically undermine Western sanction efforts, we study the effects of US and EU sanctions on trade flows between sanctioned and third countries during the period 2002–2019. We find no evidence of systematic sanction busting by Russia. For China, our results are more ambiguous. While we do not find robust evidence for an increase in overall trade between China and countries targeted by Western sanctions, trade in (raw) materials and critical goods increases notably.
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While sanctions have been an increasingly popular instrument of Western foreign policy over the past several decades, retaliatory measures by non‐Western targets of Western sanctions are a more recent development. In this study I focus on first such incident in recent history: the Russian retaliatory embargo imposed in August 2014 in response to the anti‐Russian sanctions that have been in place since March 2014. I formulate a comprehensive approach to analyzing impacts of such retaliations on trade and how retaliating countries deal with lost trade. Towards that goal I use a quadruple difference approach with high‐dimensional fixed effects to disentangle various effects of the retaliatory embargo on the extensive and intensive margins of trade. I find that such retaliation comes at a cost to both the retaliating country and the target of retaliation, while not being effective as Russian sanctions are still in place today. I estimate that total loss of trade from such retaliation amounts to about 42 billion USD in the first 1.5 years after the imposition of the embargo. The disturbances caused by such retaliation destabilizes bilateral trade by causing negative spillovers and significantly increases the costs of retaliation as an economic policy or political strategy.
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This paper mainly presents a complete analysis of the impact of such sanctions on the innovation performance of target countries by exploiting the difference‐in‐differences method for panel data of 91 countries in the period 1988–2016. The empirical results confirm a significantly negative impact of overall international sanctions on innovation in the target countries; moreover, except for noneconomic sanctions, other types of sanctions have a negative impact on the level of innovation in the target countries to varying degrees. These findings are also supported by two semiparametric matchings: artificially matching according to the two factors of geographical location and land area respectively and the propensity score matching, one nonparametric matching: entropy balancing, as well as the system generalized method of moments estimates that account for any bias due to lagged dependent variables. This paper also shows that the significantly negative effect of international sanctions is manifested in the countries with high levels of trade openness, globalization, and democracy, but not in the countries with low levels of trade openness, globalization, and democracy. Our empirical findings merit particular attention from policy‐makers in target countries.
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This article examines differences in targeted and comprehensive multilateral sanction regimes in the post-Cold War era, and argues that targeted sanctions are more humane and effective than general trade embargoes. Improving the effectiveness of sanction regimes is also addressed. Through four comparative cases - Iraq, the former Yugoslavia, Angola, and Sierra Leone - differences in impact and effectiveness are explored. The former two cases are utilised to examine comprehensive sanctions, while the latter two represent targeted sanction regimes. To provide the framework necessary for evaluating sanctions, the article presents an overview of the sanctions literature, which may be particularly useful for non-sanctions experts. Through the comparative case study, the article finds some support for the hypothesis that targeted sanctions are more humane than comprehensive sanction regimes. However, the case of Sierra Leone indicates that even targeted sanctions can have unintended humanitarian consequences and should therefore be applied with extreme caution. The article does not find support for the hypothesis that targeted sanctions are more humane than comprehensive sanctions. However, this does not seem to be due to the targeted nature of the sanctions, but primarily to problems with monitoring and compliance, as both the cases of Angola and Sierra Leone indicate. This suggests that in order to increase effectiveness, further measures are needed to create effective monitoring systems, and that strengthened collaboration between countries and organisations is necessary. Furthermore, there should be careful monitoring of compliance throughout the duration of the sanction regime, and consideration of partial lifting of the sanctions in cases of partial compliance as this may generate further compliance.
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It may seem preposterous to write about the effects of the economic sanctions currently in effect against Rhodesia since the process is not yet completed: we do not know how it will all end, and primary source material of a crucial nature is not yet available. But the purpose of this article is more in the direction of a general theory, using the case of Rhodesia as a source of examples and illustrations. The material on Rhodesia included here consists of some secondary sources, such as books and articles, and some primary sources, such as documents and other printed material; but the basic sources are mainly personal observation and a number of informal interviews with Rhodesian citizens (mostly businessmen) and with citizens of other African countries (mostly politicians), all dating from January 1966, about two months after UDI.
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Robert A. Pape is Assistant Professor of Government at Dartmouth College. I thank Randall Clark, Chaim Kaufmann, Michael Mastanduno, John Mearsheimer, Bradley Thayer, and Dennis Zacharopoulos for their thoughtful comments, and Patsy Carter and Stelios Zachariou for their timely research assistance. I would also like to thank the Earhart Foundation and the Smith Richardson Foundation for supporting this research. 1. Robert A. Pape, "Why Economic Sanctions Do Not Work," International Security, Vol. 22, No. 2 (Fall 1997), pp. 90-136. 2. Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott, Economic Sanctions Reconsidered, 2d rev. ed., 2 vols. (Washington, D.C.: Institute for International Economics, 1990). 3. Kimberly Ann Elliott, "The Sanctions Glass: Half Full or Completely Empty," International Security, Vol. 23, No. 1 (Summer 1998), pp. 50-65. 4. Pape, "Why Economic Sanctions Do Not Work," p. 91. 5. Kimberly Elliott, Gary Hufbauer, and Jeffrey Schott, "The Big Squeeze: Why the Sanctions on Iraq Will Work," Washington Post, December 9, 1990, section K, p. 1; Gary Clyde Hufbauer and Kimberly Ann Elliott, "Sanctions Will Bite-and Soon," New York Times, January 14, 1991, section A, p. 17. Gary Hufbauer offered the same advice in testimony before Congress. Statement of Gary Clyde Hufbauer, U.S. Policy in the Persian Gulf, Hearing before the Committee on Foreign Relations, United States Senate, 101st Congress, 2d session, December 4, 1990. 6. Kimberly Elliott and Gary Hufbauer, "Sanctions Might Work," Washington Post, February 20, 1994. In 1992 Elliott and Hufbauer argued that the failure of the United Nations embargo against Iraq was the result of impatience, rather than the inherent weakness of economic sanctions as a coercive instrument. Kimberly Elliott and Gary Hufbauer, "Sanctions Can Work, But They Require Luck, Patience, and Planning," Atlanta Constitution, June 7, 1992. 7. HSE, Economic Sanctions Reconsidered, vol. 1, pp. 1, 13, emphasis added. 8. Ibid., p. 41. Actually, Elliott's position in her response is inconsistent, because at one point she repeats her commitment to a competitive standard: "We explicitly take into account the presence of these other policies and call an episode a sanctions success only if sanctions-relative to these other tools-contributed at least modestly to the outcome." Elliott, "The Sanctions Glass," p. 52. 9. Statement of Gary Clyde Hufbauer, "Economic Sanctions against Iraq," Hearings before the Subcommittee on Education and Health of the Joint Economic Committee, U.S. Senate, 101st Congress, 2d session, December 19, 1990, p. 20. 10. Ibid. 11. Pape, "Why Economic Sanctions Do Not Work," p. 97. 12. Ibid., pp. 111-112. 13. James Shoch, "Party Politics and International Economic Activism: The Reagan-Bush Years," Political Science Quarterly, Vol. 113, No. 1 (Spring 1998), pp. 113-132; Bruce Stokes, "Trade: Running on Nationalism," National Journal, March 3, 1990, pp. 513-517; and Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, N.Y.: Cornell University Press, 1986). 14. Kenneth A. Rodman, Sanctity versus Sovereignty: The United States and the Nationalization of Natural Resource Investments (New York: Columbia University Press, 1988), p. 328. The cases are: Bolivia 1938-40, Honduras 1962, Argentina 1963-65, Iraq 1961, Peru 1971, Bolivia 1969, Libya 1973, Guyana 1970-71, Ghana 1972-74, Bolivia 1971, Ecuador 1971-74, Venezuela 1971-74, Algeria 1971, Iraq 1972, Jamaica 1974, Guyana 1974, South Yemen 1975, Somalia 1975, P.R. Congo 1976, and Ethiopia 1979. Rodman covers 1938 to 1980, compared to 1914 to 1990 in HSE. 15. Pape, "Why Economic Sanctions Do Not Work," pp. 133-135. Thus, while only 5 of 115 cases in the HSE database are clear successes that support their claim that economic sanctions could be effective in some circumstances, if we also count these indeterminate cases, then the maximum number that could be counted as supporting HSE's sanctions optimism would rise to 7 cases of 115. (There is a third indeterminate case, Canada-EC/Japan 1977, but in that case the uncertainty is over whether the target states made meaningful concessions.) 16. Ibid., pp. 111-136. 17. As British Prime Minister Anthony Eden explained to U.S. President Dwight Eisenhower: "If the Soviets intend to seize this opportunity of intervening by giving substantial support...
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When it comes to international economic sanctions, the most frequent goal is regime change and democratization. Up to now, however, such sanctions have usually failed to achieve their stated goal. Paradoxically, in some cases (e.g., Haiti, Iraq), they even made the targeted regimes resort to policies which severely amplified the direct negative economic consequences. This paper offers a political-economy model which provides an intuitive explanation for these observations. In the model, to avoid sanctions-induced challenges, autocratic regimes lower the supply of government services in order to reduce private-sector productivity and hence the resources of potential challengers. This defense strategy only stops working if the sanctions reach a critical intensity. Yet, the critical level might be so high that — even if the regime were ousted and democracy established — imposing sanctions would not be in the interest of the general population.
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We propose a procedure for representing a time series as the sum of a smoothly varying trend component and a cyclical component. We document the nature of the co-movements of the cyclical components of a variety of macroeconomic time series. We find that these co-movements are very different than the corresponding co-movements of the slowly varying trend components.
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In the mid-1980s many nations imposed sanctions on South African exports, most of which were subsequently removed during 1991-93. I estimate the effect of eight industrialized economies' sanctions on their imports from South Africa. Outliers are found to strongly influence the parameter estimates. Failure to take account of them leads to the conclusion that sanctions by the (then) European Communities most adversely affected South African exports. In fact, robustness checks reveal that the United States' Comprehensive Anti-Apartheid Act played the largest role, reducing bilateral imports by a third. The broader implications of these findings for estimating gravity equations are discussed. Copyright 2002 by Scottish Economic Society.