Essay: Economic sanctions

Sanctions largely emerged in the twentieth century against the backdrop of burgeoning economic and political interdependency. Conforming to a liberal rationale, sanctions provide coercive tactics that avoid military escalation. While the United Nations Security Council (UNSC) and Western democracies recognise sanctions as a moral alternative, sanctions have a spotted record and lack scholarly consensus. Further ambiguity arises from the excess of large-N studies and dearth of qualitative interpretivism. This literature review evaluates these various, often conflicting perspectives in six parts: 1) the rationale and rise of sanction policies; 2) the logic of comprehensive sanctions; 3) the criticism of comprehensive sanctions; 4) the logic of targeted or ‘smart sanctions’; 5) the criticism of ‘smart sanctions’; and 6) final remarks on the ambiguities in the literature.
 
THE RATIONALE AND RISE OF SANCTIONS:

Definitions of economic sanctions across political science scholarship range from general economic punishments to narrow economic coercion deployed solely for political goals, without concurrent military action. Most broadly, a sanction is ‘the use of economic capacity by one international actor, be it a state or international organisation, or by a group of such actors, against another international actor, or group of actors, with the intention of (a) punishing the latter for its breach of a certain rule or (b) preventing it from infringing a rule which the party applying sanctions deems important.’ Under the mandate of the United Nations (UN) Charter, Chapter VII, Article 41, the UNSC is endowed with the power to ‘decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures.’ As such, since 1945, economic sanctions have become a key mechanism by which to express the political will of the UN and, by proxy, the liberal bastions of the West.

Though sanctions are a 20th century convention that has been used since World War II, general scepticism about efficacy rendered sanctions a peripheral policy tool until the 1980s. Indeed, it was not until the collapse of the Soviet Union in 1991 that economic sanctions became the preferred compellence tactic. Jones locates the rise of sanctions in the 1990s within the proliferation of the American neo-liberal project amid post-Soviet transition. Unlike the traditional tools of military intervention, sanctions signalled disapproval and resoluteness while also mitigating domestic costs and espousing pillars of Wilsonian idealism.

Such exhibitionist American triumphalism in the post-Soviet era concurrently resulted in a shift in sanctions’ objectives. During the Cold War, regime change was an insignificant goal in economic sanctions; in contrast, between 1990 and 2005, 70 per cent of sanctions targeted regime change. Thus, today, the scope of sanctions focuses on broad ideological transformation rather than limited behavioural alterations. Indeed, such is the democratic bent of modern sanction policies that liberal arguments tend to condemn authoritarianism without a framework for evaluating authoritarian structural variation. Consequently, modern sanction policies are particularly wrapped up in prototypes of capitalism and liberalism. Though Western policymakers espouse the viability and usefulness of sanctions, the majority of scholars remain deeply divided and perpetuate the question, ‘do economic sanctions work?’

THE LOGIC OF COMPREHENSIVE SANCTIONS:

Given Wilsonian idealism embedded within modern economic sanction policies, it is no surprise that support for economic sanctions emerges from liberal theorists. Neoliberalism perpetuates a belief that comprehensive sanctions will squeeze a target country’s economy and heighten domestic hardship to the point of rising domestic discontent, consequently forcing the government into concession. It was this liberal logic that underpinned the comprehensive sanctions against Iraq in the 1990s and resulted in a drastic humanitarian crisis and the deleterious Oil-for-Food program but failed to induce measurable reforms from Saddam Hussein’s regime. The immense failures of comprehensive sanctions in the 1990s resulted in popular calls from UN and Western leaders for ‘targeted sanction’ policies. Thus, today, support for sanctions divides between comprehensive and targeted sanctions. Nevertheless, the majority of scholars generally coalesce around the idea that sanctions have a variable, weak record.

Comprehensive sanctions are sanctions that directly restrict trade and financial interaction with international markets. Huffbauer, Schott, and Elliot are largely optimistic in their assessment of economic sanctions and claim that they are successful about one third of the time. In their seminal work, Economic Sanctions Reconsidered, Hufbauer et. al. define economic sanctions as ‘the deliberate government-inspired withdrawal, or threat of withdrawal, of ‘customary’ trade or financial relations.’ They divide the political aims of a sanction into five broad objectives: 1) ‘change target country policies in relatively modest way; 2) ‘destabilize the target government’; 3) ‘disrupt a minor military adventure’; 4) ‘impair the military potential of the target country’; 5) ‘change target country policies in a major way.’ While they are clear in their intent to include only sanctions deployed under political objectives, their cases do not draw such a stark line and include moments in which sanctions were included with other conventional war methods, such as sanctions that occurred during World War II and the Korean War. While their data analysis suggests a largely impressive success rate, they fail to look solely at economic coercion without concurrent military action and often falsely include trade-motivated barriers with their data set.

Martin adds to Hufbauer et. al.’s optimism, proposing that the factors underpinning the success of economic sanctions are the participation of chief trading partners and the willingness for states to cooperate. To support this argument, she operationalizes traditional game-theory concepts of cooperation into statistical analysis. Ultimately, she finds that credibility is germane, if not essential, to the success of any sanction and can be established through two avenues: 1) ‘self-imposed costs’ and 2) ‘international institutions.’ In the first, when the sender does not internalise the costs of a sanction, the credibility of the sanction is much lower than when the costs are high. In the second, international organisations provide legitimacy to the sanction by linking together the demands of many states. Thus, for Martin, multilateral approaches that involve leading trade partners are most successful.

Despite this optimism for multilateral, comprehensive sanctions, the failure of sanction policies suggest that sanctions are failing to properly target governments and compel them into compliance. Indeed many of the consequences of comprehensive sanctions have been heightened political obstinacy and population indigence. In response to these failures, scholars have responded with a targeted sanction framework, which attempts to target specific political elites and impose severe costs directly on these perpetrators of international norm violations.

CRITICISM OF COMPREHENSIVE SANCTIONS:

While general neo-liberal enthusiasm about the usefulness of sanctions may be politically pertinent, the bulk of scholars find such optimism to be incredibly naïve. Empirical evidence suggests that sanctions rarely work. Indeed, despite their deployment in foreign security strategies, sanctions rarely have the capacity to induce changes in a target country. Thus, the literature that is sceptical of sanction efficacy is quite broad and deep, incorporating a vast spectrum of theoretical perspectives. Critics of comprehensive sanctions espouse diverse arguments that fall broadly into two disparate streams of criticism. First, most scholars who subscribe to realist theorisation argue that sanctions are not potent enough to induce political changes, thereby failing to promote security. Second, human security theorists argue that comprehensive sanctions misdirect economic consequences onto innocent civilians and foment severe humanitarian crises.

REALIST CRITICISM. From a realist perspective, Pape takes direct issue with Hufbauer et. al.’s inflated optimism. Calling for more orthodoxy in their classification, he defines sanctions as measures taken to ‘coerce the target government to change its political behaviour’ through ‘[lowering] the aggregate economic welfare of a target state by reducing international trade.’ Additionally, he ignores economic coercion deployed in instances of 1) sanctions without political objectives; 2) ‘trade wars’, 3) ‘economic warfare’ – instances in which economic actions are taken in conjunction with other coercive tactics, such as naval blockades. Eviscerating Hufbauer et. al.’s data set, Pape finds that sanctions have a pitiful success rate of less than 5 per cent. Beyond this critique, Pape contests that sanctions will not be effective against the strength of a modern nation-state: ‘Nationalism often makes states and societies willing to endure considerable punishment rather than abandon their national interests.’

While some scholars totally dismiss sanctions, some realists point out that success is largely situational. Miyagawa critiques Hufbauer et. al.’s confidence; however, he largely views the success of economic sanctions as contingent on scope and strength. Hovi, Huseby, and Sprinz present a similar analysis that bases sanction efficacy on potency. Through game theory modelling, they demonstrate that when the impact of imposed sanctions exceeds the anticipated impact, sanctions will induce a change in the target state. Miers and Morgan, using the classic model of chaos theory, argue that multilateral sanctions are largely ineffective but that unilateral sanctions preserve a strong potency. Ultimately, their argument starkly contrasts the prevailing belief that the UN Security Council is an effective institution through which to impose sanctions.

HUMANITARIAN CRITICISM. In stark contrast with the realist perspective, which argues that sanctions are weak tools of securitisation, human security proponents argue that comprehensive sanctions foment humanitarian crises without properly targeting the governing elites and inducing political transformations. According to Hastings, human security advocates the redirection of security strategies away from traditional military and paramilitary strategies toward a human-focused strategy. More concretely, he advocates for a refocus on human security indicators such as ‘economic, food, health, environmental, political, community/social, and individual personal security’ and promotes a multidimensional vision of national security.

THE LOGIC OF TARGETED SANCTIONS

After the apparent humanitarian failures of comprehensive sanctions in Iraq in the 1990s, the majority of the international community distanced their policies from comprehensive sanction strategies and focused more on targeting individual elite authoritarians. According to Biersteker and Eckert, ‘targeted sanctions’ or ‘smart sanctions’ are ‘typically applied either as incentives to change behaviour or as preventive measures, as in the case of sanctions against individuals or entities that facilitate terrorist acts.’ Policies for targeted sanctions include numerous specific tactics: freezing assets of the governmental or national elites; trade restrictions on specific products; travel restrictions; political bans from international organisations or diplomatic efforts. Proponents of these targeted programs subscribe largely to liberal theoretical perspectives while also accepting conditional nuances of authoritarian institutional frameworks. Ultimately, arguments for targeted sanctions argue these frameworks are more effective because they are presumed to address the problems wrought by circumstances of ‘inverted liberalism’ and elite buffers.

By distancing sanction policies away from traditional liberal discourse, theorists proposed a more nuanced ‘inverted liberalism.’ Under ‘inverted liberalism,’ populations residing under authoritarian leadership have extremely limited influence over governmental policies and are by-and-large restricted from domestic movements against their leaders. Unlike classical liberalism, this model of inverted liberalism suggests that the directive of ‘smart sanctions’ more clearly targets the authoritarian leaders who would be insulated from comprehensive sanctions on their population.

Rather than supporting comprehensive sanctions, many liberal scholars support targeted sanctions policies, arguing that they directly impose costs on special interest groups and leaders of authoritarian states. Under this logic, comprehensive sanctions adversely compromise the welfare of citizens while largely failing to influence key political leaders or elites. For targeted sanction success stories, scholars point to the empirical examples of sanctions against Libya and Egypt. In his analysis of sanctions and human security, Peksen shows that both forms of sanctions result in the deterioration of individual freedoms. Nevertheless, targeted sanctions have summarily less of an adverse impact on human rights violations, suggesting that targeted sanctions are a more humane alternative. Thus, the overarching logic suggests that smart sanctions would effectively ‘raise the target regime’s costs of non-compliance while avoiding the collateral damage that comes with comprehensive trade embargoes.’

Today, targeted sanctions characterise the majority of sanctions imposed by the UN and Western democracies. Giumelli identifies three causes for this shift away from comprehensive sanctions toward targeted sanctions: 1) international audiences grew very critical of comprehensive sanctions after the failures of the 1990s; 2) comprehensive sanctions had largely failed to induce regime change or weaken authoritarian elites; and 3) comprehensive sanctions had caused massive humanitarian crises for civilian populations. With specific targeted audiences, policymakers assume ‘that the policy of a state (or a political group) will change as a consequence of the pressure imposed on key individuals and non-state entities in the decision-making process.’ Consequently, under a targeted sanction policy, elite classes of people would no longer be able to shift the costs of sanctions onto disenfranchised subsets of the population.

Despite the theoretical benefits of targeted sanction programs, the reality of these targeted programs is that the goals for the sanctions were very limited and not focused on the bold aims of regime change. Since 1990, targeted sanctions have been the guiding light for sanction doctrines. Furthermore, while many liberal theorists evangelise targeted sanctions as an ideal policy solution, the reality is that targeted sanctions have a fairly spotted success rate. Thus, liberal preoccupation with sanctions is largely supported by a theoretical faith in non-military coercion, rather than strong empirical evidence to support sanction policies.

CRITICISM OF TARGETED SANCTIONS

While ‘smart sanctions’ have been the sanction framework utilised by the UNSC and Western states since the mid-1990s, these policies have largely been ineffective. Though politically appealing because they are domestically salient and limit humanitarian costs in the target country, scholars are largely critical of targeted sanction programs. While many aspects of ‘smart sanctions’ are decidedly not smart, the three major problems identified by scholars revolve around 1) limited potency and 2) inaccuracy of the target.

First, sanctions are decidedly less potent. Mack and Kahn write that a successful sanction requires striking targets with powerful consequences and that targeted sanctions tend to be less potent. Drezner echoes this assessment, saying that smart sanctions are ‘less promising in coercing the target government into making concessions.’ Likewise, Cortright and Lopez argue that the UN targeted sanctions programs, which have comprised the entirety of UN sanctions since the 1990s, have had decidedly mediocre outcomes. Even Hufbauer and Oegg, who are largely supportive of sanctions as a general foreign policy tool, find that targeted sanctions enhance the illusion of action for the sanctioners: ‘targeted sanctions may satisfy the need in sender states to “do something,” they may slake humanitarian concerns, and they may serve to unify fraying coalitions.’ While human security proponents encourage targeted sanctions that minimise humanitarian costs, their record has been decidedly weak.

Second, smart sanctions are harder to craft. It is difficult to identify responsible parties and impose sanctions that will compel alterations. According to Mack and Khan, the inherent policy delays in formulating and imposing sanctions provide elites with a buffer in which they can insulate themselves from the sanctions. In particular, the popular solutions to freeze foreign assets are less potent because leaders have lag time to withdraw foreign assets before sanctions implementation. Expanding upon Mack and Khan, Jones uses a case study of Myanmar to understand the smart sanction failures. He argues that targeted sanctions programmes imposed on Myanmar were neither potent enough nor properly directed toward the responsible political elites. Beyond individual case studies, in her comprehensive look at UN smart sanctions, Elliott finds that the UN’s record has been decidedly weak. Cortright and Lopez reach similar conclusions, finding that very few of the US targeted sanction policies from 1990 to 2002 have been effective. In sum, while the targeted sanction policies attempt to circumvent innocent populations and hone in on authorities or elites, the policies have been largely haphazard and ineffective.

REMARKS

A closer look at the paradox of economic sanctions points to an underlying shortcoming in the literature: the compulsion among scholars to attach universal norms to a highly contextual issue. While rises in economic interdependence certainly provide a compelling case for sanctions, the liberal logic fails to integrate a more subtle narrative about authoritarianism and how differing authoritarian structures or hybrid-regimes will react to sanction policies. Realism also falls short by failing to identify subnational idiosyncrasies in state behaviour. Methodologically, the majority of the scholars employ rigorous quantitative evaluations of sanctions and generally attempt to identify externally applicable trends through panel designs. While these techniques are robust and produce compelling evidence for the failures of sanctions, they do little to identify why sanctions do not produce their intended results.

In juxtaposition, the varied, often contradictory, assessments of comprehensive and targeted sanctions underscore the complexity of understanding and evaluating economic sanctions. Scholarly intentions to attach universal proscriptions to sanction policies tend to overlook the nuances of individual cases. As such, comprehensive panel studies fail to explain situations of divergence from the expected norms. Ultimately, these assessments fail to rationalise the differential outcomes in sanction failures and successes. In response to this shortcoming, this paper conducts a comparative case study of Iran and North Korea. While both sanction programs emerged in response to their respective nuclear development programs, the sanctions have had drastically different results.

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