Economic sanctions today are popular tools of coercive foreign policy. Many states, viewing them as an option just short of war, enact sanctions in disputes as signals of resolve and their intention o use more forceful mechanisms if the recipient’s behavior does not change. In this paper, we consider the signaling value of sanctions by exploring the conditions under which they succeed (and fail).
... [Show full abstract] To understand the signal sanctions send, however, we argue it is important to not only understand the characteristics of the sanction episode, but also the factors influencing why challengers choose sanctions over military force. Using a simple formal model, we argue that the true signaling value of sanctions is in their ability to demonstrate the capabilities of the state that employs them. States capable of disrupting political and economic systems in the target with sanctions will likely succeed in avoiding war as a result. Furthermore, states with said capability are more likely to use sanctions over military force as first-best policy. States that possess a preponderance of military capabilities, however, are more likely to employ military threats. Ultimately, through a series of large-N statistical tests, we find that states do tailor coercive policies to their strengths. We also find, however, that the more stringent and costly the economic sanction to the target, the more likely sanction threats are to escalate to first imposition and later military threats. This counterintuitive finding argues against our theory and suggests sanctions may indeed be weak signals regardless of severity.
