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.
Do Economic Sanctions Work?
Analysts have interpreted the recent openings in Myanmar and North Korea as the finally successful result of years of international pressure and economic sanctions. At the same time, debate is hot on the scope for similar measures in Iran, Syria, and, closer to us, Belarus and Hungary. Does economics have anything to say on this? What can we learn from the analysis of past experiences?
Read the full policy brief here.
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.
Read the full policy brief here.