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Tuesday, September 8, 2015

Do Economic Sanctions Work?

CAMBRIDGE – With Western economic sanctions against Russia, Iran, and Cuba in the news, it is a good time to take stock of the debate on just how well such measures work. The short answer is that economic sanctions usually have only modest effects, even if they can be an essential means of demonstrating moral resolve. If economic sanctions are to play an increasingly important role in twenty-first-century statecraft, it might be worth reflecting on how they have worked in the past.
As Gary Hufbauer and Jeffrey Schott note in their classic book on the topic, the history of economic sanctions goes back at least to 432 BC, when the Greek statesman and general Pericles issued the so-called “Megarian decree” in response to the abduction of three Aspasian women. In modern times, the United States has employed economic sanctions in pursuit of diverse goals, from the Carter administration’s efforts in the 1970s to promote human rights, to attempts to impede nuclear proliferation in the 1980s.
During the Cold War, the US also employed economic sanctions to destabilize unfriendly governments, especially in Latin America, though they do not appear to have played more than a minor role, even where regime change eventually occurred. Economic sanctions on Serbia in the early 1990s did not deter the invasion of Bosnia. Certainly, the US government’s symbolic punishment of chess legend Bobby Fischer (for playing a match in Belgrade that violated sanctions) provided no relief for the besieged city of Sarajevo.
The old Soviet Union played the sanctions game as well – for example, against China, Albania, and Yugoslavia. It, too, did not have much success, except perhaps in the case of Finland, which ultimately bent its policies to gain relief from sanctions imposed in 1958.
Most modern cases of sanctions pit a large country against a small country, though there are a few cases involving countries of equal size, such as the long quarrel, from the 1950s to the 1980s, between the United Kingdom and Spain over Gibraltar.
As Hufbauer and Schott, among others, have illustrated, the effects of sanctions are often fairly disappointing – so much so that many scholars have concluded that such measures often are imposed so that governments can appear to domestic audiences to be “doing something.” Certainly, severe US sanctions on Cuba failed to bring the Castro regime to heel; indeed, President Barack Obama’s move to reestablish full diplomatic relations may have more effect.
But sometimes sanctions do work. The strong international consensus to impose sanctions on South Africa in the 1980s eventually helped bring an end to apartheid. Likewise, sanctions have helped bring Iran to the bargaining table, though it is not clear how long its government will be willing to defer its nuclear ambitions. And the Russian economy today is in big trouble, though this might be described as a lucky punch, with the real damage being done by an epic collapse in global oil prices.
Some in Russia, where the price collapse has hit government revenues hard, claim that the US and Saudi Arabia are conspiring to bring Russia to its knees. But that gives US strategists far too much credit. A more likely culprit for the steep price decline is a combination of the shale-energy revolution in the US and the sharp slowdown in Chinese growth. China’s slowdown has helped precipitate a broad-based fall in commodity prices that is having a devastating effect on countries like Argentina and Brazil, with which the US authorities presumably have little quarrel.
One of the major reasons economic sanctions have fallen short in the past is that not all countries have complied. Indeed, significant differences of domestic opinion in the imposing country often undermine sanctions as well.
Moreover, countries imposing sanctions must be prepared to address their own vulnerabilities. North Korea is perhaps the most noxious regime in the world today, and one can only hope that its cruel government collapses sometime soon. The Kim regime has clung to power despite being subject to severe economic sanctions, perhaps because China, fearing a united Korea on its border, has not yet been willing to withdraw its support.
Yet it is easy to forget that there are different viewpoints in international relations, even in the most extreme situations. Though North Korea’s alleged attack on Sony Pictures’ computers has been rightly condemned, it must be admitted that from the perspective of the North Korean elite, their country simply applied economic retaliation much like anyone else does. Sony Pictures had produced a satire poking fun at North Korea’s leader, the “Young General” Kim Jong-un. This was an intolerable affront, to which the elite responded with economic sabotage rather than military action.
Let us also not forget that Russia, too, has deployed cyber attacks in the service of foreign-policy goals. Indeed, Russia has far more formidable hackers than North Korea (though much of the top talent currently is employed in mafia rings, rather than in strategic operations).
In a world where nuclear proliferation has rendered global conventional war unthinkable, economic sanctions and sabotage are likely to play a large role in twenty-first-century geopolitics. Rather than preventing conflict, Pericles’s sanctions in ancient Greece ultimately helped to trigger the Peloponnesian War. One can only hope that in this century, wiser heads will prevail, and that economic sanctions lead to bargaining, not violence.

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