Economic Sanctions and Their Consequences

Sanctions are an important instrument of foreign policy, an alternative for military action. By oppressing the opponent, an economic, social or political aspect creates an opportunity to resolve the conflict without the use of military force. Perhaps this is one of the reasons why economic sanctions are so popular. But how effective are sanctions and do they solve their political problems?

 What is the Economic Sanctions?

Economic sanctions have become a decisive tool for Western countries to respond to geopolitical challenges. As of January 4, 2018  around 45 countries have been imprisoned by the EU, the United Nations and the United States. And recently, the need for new sanctions against Turkey, Poland and Hungary was also discussed. However, according to the study of the State University of Connecticut  (from 1915 to 2006)on the effectiveness of economic sanctions has shown that the used sanctions are at least 30% successful.

And, as a result, the frequency of penalties exceeds their efficiency. The success of economic sanctions is interconnected from the level of implementation of the country’s sanctions. Correspondingly, the use of economic sanctions is considered effective or successful if the target country has changed its policy towards the subject of the conflict. Otherwise, the sanctions policy is considered to be unsuccessful, meaning that it does not provide the desired result of the initiating country or organization, as it did not force the opposing country to change its initial position.

Speaking of sanctions, firstly it is important to understand in what case of the provision or breach of preconditions the state appears on the verge of international confrontation and finds itself in the “axis of evil” and then becomes a target of punitive measures, and that entities are authorized to impose sanctions against others.

Governments and international counterparts are setting economic sanctions trying to change the strategic decisions of any state or non-state actors that threaten their interests or violate international rules of conduct. In addition, economic sanctions are commercial and financial penalties that are applied by one or more countries and are directed against any country, group, or individual. Economic sanctions may include various forms of commercial embargo or restrictions on financial transactions.For the UN Security Council, the UN Security Council can refer to Article 41 of the UN Charter and adopt a sanction decision calling Member States to execute them against the State, persons or groups charged with international offenses, human rights abuses, terrorism and its financing. The most commonly used UN sanctions today can be conditionally divided into the following groups: commercial, financial, diplomatic, sport and cultural, legal sanctions. As well as the deprivation of the right to representation or the right to vote in international organizations.

Sanctions may be imposed not only by the United Nations but also by international and regional organizations, such as ICAO, UNO, a group of states (EU), individual organizations or countries. Moreover, the amount and type of sanctions depends on the gravity of the crime and the damage. The basis for their implementation is largely dependent on the decision of the UN Security Council. In practice, first of all, the sanctions are created by the Security Council and then adopted by the EU and other countries in the form of Council resolutions and regulations. However, in some cases, the EU may impose sanctions without any prior UN action, such as preventing terrorist financing in Syria. In some cases, separate EU countries, such as the Netherlands, may impose sanctions without prior agreement with the UN or the EU. In 2016, the Second Chamber of the Netherlands adopted a package of bills aimed at individuals accused of terrorism and states that finance jihadists, “Al-Qaeda” and “Hezbollah” terrorist organizations.

From Economic Sanctions to Smart Sanctions

Imposition of sanctions often has a phased structure and, depending on the size of the damage, the object of punishment for the number of victims and groups may be included in one of the three categories of sanctions. Measures taken against individual individuals or organizations in the penal system are usually the second step in the sanctions list after diplomatic sanctions. These are also known as “smart” (purposeful sanctions), designed for the ruling elite or individuals who have committed an illegal act.

The third phase includes economic barriers that include partial or complete import, export restrictions, investment barriers, and arms embargoes. However, the application of sanctions is conditioned by considerable risks and human rights infringement, influencing primarily on economically and socially unstable groups of society.

In 1914-2000, during the course of the study US scientist Harry Clyde Hufbauer and his colleagues have investigated about 200 sanction cases. According to his conclusion, one-third of the countries in the penal system are usually “delivered” only a few years later. Meanwhile, the consequences of the sanctions on the country’s economy are immense: the lack of foreign investment and market opportunities leads to lower productivity, low tax revenues, and unemployment rising. According to the basic assumptions, this is the very important mechanism that forces states to review their actions.

Certainly, if the sanctions are sufficiently serious and influential, the actions of the leaders of the country are under pressure, because the danger of the people’s rebellion increases. Nevertheless, under the example of Iraqi Saddam Hussein, it has become clear that it does not always work: as long as the respective power groups of the country are in power, they do not voluntarily change their policies and prefer not the welfare of the population, but the maintenance of their own power. According to the United Nations Food and Agriculture Organization’s Security Council, the economic sanctions imposed by the Security Council have killed around 576,000 Iraqi children since the end of the Gulf War. The effects of long-lasting economic sanctions in Iran are best reflected in the strength of the US dollar. If in January, 2009 It was possible to buy one dollar in 9,700 riyals on Tehran streets,  today one dollar costs about 30,000 riyals.

These destructive economic factors led to the development of a new sanctions strategy. Instead of a comprehensive embargo, the international community has begun to use “smart sanctions”, where sentences are targeted at the country’s political elite and their close circles. It seems very convincing and effective at first glance, but in fact proves the opposite. David Curtney and George Lopez find that the so-called “smart” sanctions are much less weighted and easily overlooked and, as a result, they have less success, while overall average economic sanctions are more effective.

Why are the Sanctions Failed?

The effectiveness of sanctions has long been questioned. According to the quantitative study, from 1971 to 2000 only 45% of the 888 sanctions  were effective, and often had the opposite effect. According to experts, this is not a coincidence and a number of factors are responsible for the failure.

  1. Hostile attitude towards external pressure: external pressure can contribute to the legitimization of the power of lawless leaders within the country. You. Graufogel and C. Sousse used a study of Zimbabwe’s example, where in 2002, during the course of human rights violations and violations of parliamentary elections, the international community used financial and visa penalties against the political elite of Zimbabwe. Then, arms sales, international cooperation and suspension of humanitarian aid were also halted. According to experts, all of these punitive measures have had a tremendous impact on the country’s already poor economy. President Robert Mugaby linked the causes of economic downturn with international intervention and “illegal” sanctions. Afro-barometer surveys in different years have shown that the policies of this charge are quite convincing among the general population. In 2010, 63 percent of respondents in Zibabad linked the unfortunate economic downturn to international sanctions.
  2. Opposition passiveness: The relationship between the authorities and the opposition, as well as civil society activism, is an important factor for the success of the sanctions. In the case of successful sanctions, social groups that are interested in changing the political course should be strengthened and can put real pressure on the ruling gang. In Iraq, the Hussein administration was supposed that the middle class dissatisfaction would increase due to economic and commercial barriers, and the latter would overturn the government. However, as a result of the import and export failure, the middle class of the country lost its sources of income and was dependent on the state’s social benefits. On the other hand, smuggling during the economic blockade created a wealthy, allied opposition to Hussein’s elite and international sanctions.

 3.The unconformity of sanction applicants: The unilaterality of the applicants of the sanctions. UN sanctions are rarely effective as  the control over the policies of member states is weak. And the EU and the US often have disagreements on a permanent sanctions policy. Moreover, some sanctions are often ignored by individual governments or high-income individuals. In fact, sanctions are bilateral. they affect not only the punished nation, but also the practitioners of that sanction, so each country first of all thinks of its economic interest.In 2008, the issue of sanctions against Russia after the Georgian-Russian conflict in August became a source of serious debate. Some states, led by the UK, demanded sanctions against Russia. However, Germany and France highlighted both the maintenance of partnership with Russia and the freezing of the conflict. Federal Chancellor of Germany A. Merkel even stated that the construction of the North Stream pipeline would not suffer from that conflict, as the pipeline is of vital importance for the EU’s energy security. Italian Prime Minister S. Berlusconi also welcomed the partnership with Russia. As a result, the EU did not apply any sanctions. And after the Crimean occupation in 2014, sanctions against Russia had a boomerang effect on different sectors of the EU and the US economy. Russian Prime Minister Dmitry Medvedev also pointed out that economic sanctions have damaged the Russian economy, leading to  loss of billions of dollars. In its turn, the EU’s losses were estimated at 100 billion euros by 2015, only Italy lost 1.25 billion euros. And the German business sector, with more than 30,000 jobs linked to Russia, has also regained trade because of the loss of sanctions.

According to the report of  UN expert Idris Jazeera(2017), the EU has lost  3.2 billion dollars a month as a result of sanctions against Russia. The expert also noted that sanctions “are intended to serve as a preventive measure against the policy of Russia, but have become a threat to international business”.

  1. Symbolic nature of sanctions. the representatives of the theory of public choice suggest that the use of sanctions has domestic political motives and can have a serious internal political impact on the state that apply sanctions. Despite the impossibility of making changes in imposed countries, however, “inaction” is also morally condemned to international jurists. In this case, sanctions are applied only to the fact that their own population is clear and symbolic with their power to hide their power in the created situation. “I’m punishing, so exist,” emphasizes the European official in the Johns study.

Summary

It is difficult to clearly estimate the effectiveness of economic sanctions, as their use is usually a complex and quite time-consuming chain of effects. In spite of this, sanctions continue to be a commonly used tool as politically easier to use than military interventions.

A study of the effects of the current economic sanctions can be derived from four “classes” of sanctions. First, the threat of sanctions, especially if they are likely, can be effective by creating a negotiation opportunity. Secondly, their demands should be focused on concrete changes in the policy and the preconditions for their elimination. Thirdly, sanctions will likely have a greater impact on their target if the target government is to be confused with the internal opposition, otherwise sanctions can only contribute to the creation of greater political unity over the target group. Fourth, sanctions should be a broad strategy that combines incentives and penalties. Sanctions supporters claim that they still have great prospects and can be used more effectively in the future.


  1. Hohmann, Harald/ Puschke, Marcus: Basiswissen Sanktionslisten – Hintergrund und Praxis der Integration von Sanktionslisten in Ihre Geschäftsprozesse, Köln: Bundesanzeiger Verlag, 2008.

2.Jones, Lee: Societies Under Siege. Exploring how international economic Sanctions (Do Not) Work, Oxford 2015.

3.Peter Rudolf “Sanctions in der internationalen Poitik,“ SWP Studie, Beriln. Available online at https://www.swp-berlin.org/fileadmin/contents/products/studien/2006_S30_rdf_ks.pdf.

  1. Peter Wallensteen: “A Century of Economic Sanctions: A Field Revisited.” Uppsala Peace Research Paper No. 1. Department of Peace and Conflict Research, Uppsala University, Sweden. 2000. Available online at http://www.uu.se/digitalAssets/18/18601_UPRP_No_1.pdf.

5.Куркин Б.А. М. Международное право: МГИУ, 2008. — 192 с.

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[1] https://www.reuters.com/article/us-russia-medvedev-sanctions/rouble-fall-sanctions-hurt-russias-economy-medvedev-idUSKBN0JO0SR20141210

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[1] https://www.bloomberg.com/news/articles/2015-06-18/russians-live-without-parmesan-as-italy-pays-sanctions-price

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[1]  Jones, Lee: Societies Under Siege. Exploring how international economic Sanctions (Do Not) Work, Oxford 2015


Author: Mariam Jamalyan. © All rights reserved.

Translator: Anoush Gevorgyan


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