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The questionable logic of international economic sanctions

Whatever the international crisis – whether inter-state war (Russia-Ukraine), civil strife (Syria), nuclear proliferation (North Korea), gross violations of human rights (Israel), or violent non-state actors on the rampage (ISIS, al-Qaeda) – governments, pundits and NGOs always seem to formulate the same response: impose economic sanctions. In the mid-20th century, only five countries were targeted by sanctions; by 2000, 50 were. Once obscure and rarely used, sanctions are now central to international economic and security policy.

Troublingly, though, proponents of sanctions generally offer only the vaguest account of how they expect the imposition of economic pain to elicit political gain. Historically, these accounts invoke liberal ideas of statehood. Thus, target rulers are understood as rational utility maximisers. If sanctions can impose costs exceeding the benefits of objectionable policies, they will change course; if they don’t, the harmed population will rise up and force them to do so. This ‘naïve theory of sanctions’ was disproven as early as 1967 by Galtung’s study of Rhodesia – where the population rallied around the targeted regime. Nonetheless, it surfaced again in the 1990s, when Western ambassadors declared that sanctions should aim to harm the Iraqi population to coerce Saddam Hussein. Infamously, US Secretary of State Madeleine Albright said that 500,000 children’s deaths were ‘worth it’. But, of course, this humanitarian disaster did not unseat the Iraqi regime.

The resultant political backlash led policymakers to adopt so-called ‘smart’ or ‘targeted’ sanctions. These measures supposedly target those directly responsible for wrongdoing, avoiding ‘collateral damage’. They typically involve financial restrictions, travel bans and other inconveniences targeted at a few dozen to a few hundred individuals, companies or state entities.

While this sounds superficially sensible, its underpinning logic is actually no less ‘naïve’. It assumes that target states are driven entirely by the preferences of a small clique of individuals, such that tweaking their personal incentives will lead to policy change. This is nonsense. Despite media representations to the contrary, even highly authoritarian states are based on coalitions of social and political forces – which are often surprisingly broad, and shape what regimes can and cannot do. Saddam’s regime, for instance, was underpinned by a shifting coalition of Sunni tribes, urban middle and working classes, a ‘fat cat’ contractor class, smugglers, rural landlords and Kurdish collaborators. While frozen bank accounts or visa bans may irritate authoritarian leaders, they matter far less than keeping ruling coalitions satisfied and intact.

Targeted sanctions pose little threat to these coalitions because they are generally rather trivial and more easily evaded than comprehensive measures. For most targets, the costs are minor compared to the spoils of continued rule or the political issues at stake. Many targeted elites simply don’t have financial or other linkages to Western states – as in Myanmar, for instance, whose generals sourced all the personal services they wanted in Singapore and other Asian states. And of course, since they are targeted precisely because they are powerful, the targets are often able to evade restrictions, by using proxy companies or generating false passports, for instance. Elites are also well placed to displace costs onto the wider population, creating the very collateral damage that ‘smart’ sanctions are supposed to avoid. In Myanmar, for example, targeted ‘cronies’ of the military regime simply lobbied for more business concessions and other scams that imposed higher domestic prices.

Moreover, despite the aura of precision surrounding ‘targeted’ sanctions, targeting is often done extremely crudely. In Myanmar’s case, pages were just torn from the local Yellow Pages and sanctions slapped on business owners – resulting in sanctions being imposed on Western sympathisers or people sharing the target’s name. This has led to legal challenges in the EU. Frankly, smart sanctions are often pretty dumb.

Given all these concerns it’s perhaps unsurprising that even their cheerleaders admit that sanctions – whether comprehensive or targeted – fail two-thirds of the time. Critics say their success rate is closer to five percent.

Clearly, what’s needed is a far more modest assessment of our very limited capacities to engineer social and political outcomes in other states – a lesson underscored by the failure of other forms of intervention, like statebuilding operations. If we are to continue using sanctions, we need far more serious assessments of target societies and far more sophisticated models of regime dynamics. We need to study the coalitions underpinning regimes and those supporting alternatives, and consider how sanctions will impact these different groups and the struggles between them. We need to tell plausible causal stories about how imposing economic gain is likely to lead to the concessions sought – about the mechanisms by which sanctions are supposed to ‘work’. And we need to monitor sanctions to see if these mechanisms are being triggered and amend them accordingly.

These basic tasks are, astonishingly, not undertaken by any state or international organisation currently imposing sanctions. Sanctions are thus being imposed on a wish and a prayer – in the vague hope that, somehow, they will translate into the outcomes sought. Given the real and often severe damage inflicted on target states and societies, that is highly irresponsible, frequently counter-productive and, for a policy often justified with appeals to morality, decidedly unethical.

Image credit: Fence Barbed Wire Clouds Gainesville B&W by cdsessums. CC BY-SA 2.0 via Flickr.

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