NCPA - National Center for Policy Analysis

Do Sanctions Work?

July 22, 2003

Sanctions first appeared in the mid-1800s when a country or coalition would blockade of a wayward country's ports to cut off trade and force debt payment. Economic sanctions restricting trade, money or migration from a country have been routinely used in recent decades to coerce states without direct military conflict.

However, they are mostly a tool of countries with larger, developed economies:

  • Trade sanctions were imposed in 117 cases between 1970 and 1998, and the United States was involved as a sanctioning party in more than two-thirds of them.
  • In 115 cases of sanctions deployed since 1914, the Gross Domestic Product (GDP) of the initiator of sanctions was almost always at least 10 times greater than that of the target country.
  • The only cases where sanctions cost target nations more than 10 percent of GDP were the United States/United Nations-sponsored sanctions against Iraq following the 1991 Gulf War and the United Kingdom/U.N.-sponsored sanctions against Rhodesia from 1965 to 1979.
  • Sanctions have cost Iraq about 48 percent of its GDP but disproportionately affected the income and mortality of its poorest citizens.

Few cases of economic sanctions in the 20th century have imposed major costs on the countries that implement them; however, the 1980 U.S. embargo on grain exports to the Soviet Union cost America $2.3 billion and caused American farmers to lose their dominant market share of grain exports.

Globalization has increased international trade relationships and has weakened sanctions' potential power by creating new ways in which target countries can circumvent them. Though sanctions are clearly more beneficial when wielded by rich countries, there is not much evidence to suggest that they aid in forcing countries to conform to the initiator's demands.

Source: Lance Davis and Stanley Engerman, "Sanctions: Neither War Nor Peace," Journal of Economic Perspectives, Spring 2003.


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