Economic sanctions are an increasingly important tool for coercing foreign governments. But they are a delicate weapon, and their use requires detailed knowledge of the economic costs and side effects of different types of sanctions.
In a new book, the German political scientist Christian von Soest examines the impact of the more than 200 sanctions programmes that are currently in place. His work shows that comprehensive economic restrictions – such as those in the form of a complete freeze of Russian central bank assets and foreign currency reserves – are effective at raising the price that Russia pays for its actions, but can also have severe negative side effects on the economies of third countries.
A key reason why some sanctions work while others fail is that they target specific, economically sensitive sectors. The choice of these sector-specific targets depends on a nuanced understanding of the targeted nation’s trade structures and interdependencies.
This is why, for example, countries that rely on the export of a single commodity, such as island nations or low-income economies, are particularly susceptible to even moderate sanctions. For these nations, a reduction in their share of the global market due to sanctioned exports can lead to GDP losses that are many times higher than average.
This is why the international community needs to understand better how these types of sanctions work, and which ones are most effective. The goal is to strike the right balance between pressure and restraint, avoiding plunging the population into a humanitarian crisis. Sanctioners should aim to build the broadest coalitions possible, and make the demands they attach to their coercive measures attainable. They should also consider the end of their sanctions from the outset, and develop exit scenarios and milestones.
About the Author
