Here's Why Sanctions Don't Work

As tensions between Russia and Ukraine continue to mount, President Obama just announced new sanctions on Russia.

The sanctions are leveled against large banks, and energy and defense firms, like Gazprombank, Russia's largest bank and Rosneft, the world's largest oil company.

Back in April, the U.S. has announced sanctions against seven of Vladimir Putin's 'cronies' mostly freezing their assets and imposing travel bans.

Morgan Stanley's Russia economics and strategy team previously wrote that they are "cautious about the effectiveness of sanctions on Russia."

"Russia is a large country, with extensive resources, accounting in 2012 for 2.8% of global GDP, 4.7% of international merchandise trade and 13% of internationally traded oil. Typically, sanctions have been applied against much smaller countries, such as Iran, Iraq, Libya and North Korea, with significantly fewer resources."

But how effective are sanctions really?

Recent history suggests not so much. In a Bloomberg Businessweek column, Carla Anna Robbins, an adjunct senior fellow at the Council on Foreign Relations, points out three such failures.

"Sanctions have failed to dissuade Iran from continuing to enrich uranium. They haven't dislodged North Korea's repressive and erratic leaders or forced a rollback of their nuclear and missile programs. For all the international pressure on Syria's Assad, the regime is getting more ruthless, not less, and the policy debate in Washington has moved on to how much military support to provide the rebels."

A study by Gary Hufbauer, Jeffrey Schott, and Kimberly Ann Elliot (HSE) first promulgated "key evidence that sanctions can achieve ambitious foreign policy goals." In their study, the reviewed 115 cases between 1914 and 1990 where sanctions were used, and found that 40 cases, or 34% were successful.

In a seminal paper for International Security, titled "Why Economist Sanctions Do Not Work," Robert A. Pape writes that sanctions were in fact only effective 5% of the time, not 34%.

Pape argues that the world would need to change significantly before economic sanctions could "be a reliable alternative to military force." Here are some of his key arguments.

• The political cooperation we saw in the early 1990s is unlikely to continue, as countries are increasingly likely to put their interests first before considering Western policies.
• The main reason sanctions fail is because of the nature of the target state. "They key reason that sanctions fail is that modern states are not fragile. Nationalism often makes states and societies willing to endure considerable punishment rather than abandon their national interests. States involved in coercive disputed often accept high costs, including civilian suffering, to achieve their objectives. …Even in the weakest and most fractured states, external pressure is more likely to enhance the nationalist legitimacy of rulers than to undermine it."
• The expectation that cooperation from different states will make sanctions more effective, relies on two expectations: "that greater cooperation will increase the economic punishment on target states, and, more critically, that increased punishment will make targets more likely to concede." The latest especially is "dubious," according to Pape. For this to work, economic punishments will have to be "dramatically higher" than they have been in the past, and even this is only a "speculative possibility."

None of this is to say that sanctions never work, the dissolution of South Africa's brutal apartheid regime is a case in point. And turning to sanctions proves that the 'coercer state' is willing to try a more peaceful method of negotiation first. But the effectiveness of sanctions is very much in doubt.