Sanctions can restrict a country’s access to foreign markets, limit its ability to finance military projects and other economic activities, or freeze assets abroad. They can be imposed on whole countries, individual sectors of a country’s economy or even on individuals. These restrictions often have the perverse effect of bolstering authoritarian, statist societies by enabling governments to better control distribution of goods by creating scarcity. They can also have unintended consequences such as triggering large scale emigration and delaying the emergence of middle classes or civil society. Smart or designer sanctions can mitigate these effects by limiting the scope and duration of the restrictions, identifying and freezing assets quickly, and allowing for humanitarian exceptions.
Yet, despite their considerable costs, sanctions remain popular with politicians and policymakers around the world. Their popularity stems from their perceived capacity to achieve a broad range of goals, such as expressing displeasure with a particular policy or reassuring domestic constituencies that a government is committed to a set of international norms, for example adherence to human rights or opposition to proliferation.
However, a review of the research underlying this article makes clear that our understanding of how sanctions actually work is limited. Economists have focused largely on the relationship between policy choices and economic effects, drawing in some cases from theory developed to explain other phenomena, such as trade, and in others, from theories of war. Similarly, political scientists have used some theory designed to help explain other processes, such as the role of incentives and deterrence, but without taking into account the specific objectives of the policy being addressed or its likely effects.
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