Even if it is not straightforward to ascertain whether sanctions are effective at reaching their aim, whatever it may be, sanctions do produce some effect in any case for both the sender and the receiver, or target. There is a range of outcomes that might be affected and that previous studies have examined: inequality, exchange rates, trade composition and volume, the informal sector, military spending, women’s rights, and many more. But as it often happens, the most studied outcome is gross domestic product (GDP), as this is a measure that efficiently summarizes the whole economy and correlates significantly with many other outcomes we care about.
Why Are Sanctions Seen as Ineffective?
Sanctions are restrictions imposed on a country by one or more other countries with the intent to pressure in effect some desirable outcome, or conversely to condemn and punish some undesired action already taken. When evaluating sanctions, therefore, the focus is naturally on whether they succeed to discourage this particular course of action, or to remove the decision-makers responsible for it. And on this account, sanctions are overwhelmingly seen as unsuccessful. However, a few complications cloud this conclusion.
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Do Economic Sanctions Work?
For decades, policymakers and scholars have debated whether economic sanctions actually work. Some see them as blunt tools that rarely achieve their intended purpose, while others point to cases where sanctions contributed to major political change. What is clear is that sanctions are used often, despite mixed results and frequent controversy over their effectiveness. Does economics have anything to say on this? Can we draw lessons from past experiences that help us understand when and why sanctions succeed—or fail?
Read the full policy brief here.