Publisher Council on Foreign Relations Press
Release Date June 1998
Price $17.85 hardcover
The widespread use of economic sanctions constitutes one of the great paradoxes of contemporary American foreign policy. Sanctions are frequently criticized, even derided. "Sanctions don't work" is an oft-heard refrain. At the same time, economic sanctions are fast becoming the policy tool of choice for the United States in the postCold War world.
The evidence of the latter contention is widespread. The United States now maintains economic sanctions against literally dozens of countries. One recent study listed no less than 35 countries that had been targeted by new American sanctions from 1993 to 1996 alone.1 What is critical, however, is not just the frequency with which economic sanctions are used but their importance. Increasingly, sanctions define or dominate a number of significant relationships and policies.
Sanctions--predominantly economic but also political and military penalties aimed at a state or other entities to alter political and/or military behavior--are employed for a wide range of purposes. Indeed, sanctions are now used by the United States to discourage the proliferation of weapons of mass destruction and ballistic missiles, promote human rights, end support for terrorism, thwart drug trafficking, discourage armed aggression, protect the environment, and replace governments. In any of these areas, the tactical purpose of a given sanction can be to deter, coerce, signal, and/or punish.
Excluded by this definition are sanctions introduced solely for the purpose of ensuring market access or compliance with trade arrangements. Such sanctions are different in several important ways: They are reactions to economic policy and behavior; they are meant to change economic policy or behavior; and they are introduced pursuant to an existing set of rules that govern or at least guide trade. The purpose of this study by contrast is to examine the use of economic sanctions for noneconomic purposes where there is little or no agreed legal or political framework.2
Actual sanctions range across the economic, military, and political spectrums. At various times, sanctions have taken the form of arms embargoes, foreign assistance reductions and cut-offs, export and import limitations, asset blockages and freezes, tariff increases, import quota decreases, revocation of most-favored-nation (MFN) trade status, votes in international organizations, withdrawal of diplomatic relations, visa denials, cancellation of air links, and prohibitions on credit, financing, and investment.
The legal bases for sanctions also have multiplied. A number of sanctions are implemented by the president or his designated representative exercising powers that exist in omnibus federal statutes. U.S. sanctions against individual countries also are codified in public laws passed by Congress and signed by the president; introduced through executive orders introduced by the president alone; and taken pursuant to resolutions of the United Nations Security Council.3 Sanctions are even increasingly the result of measures passed at the state and municipal levels throughout the United States.4
What explains the popularity of sanctions? There is no single cause. There are, however, a number of inspirations and explanations. Sanctions can offer what appears to be a proportional response to a challenge in which the interests at stake are judged to be less than vital. In addition, sanctions are a form of expression, a way to communicate official displeasure with a certain behavior or action. They thus satisfy a domestic political need to do something and can serve to reinforce a commitment to a behavioral norm, such as respect for human rights or opposition to proliferation. In principle, such message-sending has the potential to affect the behavior of uninvolved but observant third parties, possibly deterring them from taking some action for fear of being penalized.
American reluctance to use military force is another motivation--particularly in those instances in which U.S. interests are not deemed sufficiently important to justify casualties and high financial costs. Sanctions provide a visible and less expensive alternative to military intervention at the same time they provide an alternative to doing nothing or limiting the U.S. reaction to rhetoric. Such sentiment captures the conditional support lent to economic sanctions by America's Catholic bishops: "Sanctions can offer a nonmilitary alternative to the terrible options of war or indifference when confronted with aggression or injustice."5 In this sense, sanctions constitute not simply a form of expression but an action, one that appears to involve less risk and cost (be it human, financial, or moral) than using military force.
The great frequency with which sanctions are used is also a result of the increased strength of single-issue constituencies in American politics. Small, organized, focused groups can have an impact far beyond their actual strength, especially (and as is often the case) when no equally focused countervailing force exists. Many vocal constituencies argue that sanctions contributed to the achievement of U.S. policy aims in the past--for example, in helping to bring about an end to communism in the Soviet Union or apartheid in South Africa--and can do so again in different contexts.
The growth of congressional power also helps explain the prevalence of economic sanctions. The Constitution divided the foreign affairs power between Congress and the executive, and over the past quarter century there has been a shift in the pendulum toward Congress. Thus sanctions are introduced regularly by members of Congress--often at the behest of single or special interest groups--through legislation or as amendments to legislation.
The greater reach of media is another factor. The so-called CNN effect can increase the visibility throughout the United States of problems in another country and stimulate a desire on the part of Americans to respond. Sanctions offer a popular and seemingly cost-free way of so doing.
Despite these changes, sanctions are nothing new to the United States. The American Revolution was in part a revolt against British sanctions. Indeed, sanctions occupy an important if not always distinguished place in U.S. history. Sanctions helped trigger the War of 1812, weakened the Confederacy a half century later, and were levied against Spain during the Spanish-American War of 1898.
Sanctions were also an important tool of American statecraft during the Cold War. At times, the target was the behavior of the Soviet Union and its allies. Prominent among such efforts were the linking of most-favored-nation trade status to Soviet emigration practices and the embargo introduced against Cuba soon after the Communist takeover. But the United States also resorted to sanctions against other countries to settle what were viewed as illegal expropriations, to destabilize unfriendly governments, or to penalize foreign countries for their use of military force beyond their borders.6 In the 1970s and 1980s, sanctions also were commonly employed to further U.S. nonproliferation and human rights objectives.7
Sanctions also have been a tool for others throughout the twentieth century. In the 1930s, the League of Nations undermined much of what promise and legitimacy it had with its failure to implement meaningful sanctions against Italy in response to Mussolini's aggression in Abyssinia. Sanctions were the central instrument relied on by the United Kingdom and the international community in the aftermath of Rhodesia's unilateral declaration of independence in 1965. Economic sanctions--the so-called Arab Boycott--were a central element of the Arab world's rejection of Israel.8
Much of the scholarship that focuses on these and other early experiences tends to be relatively harsh in its judgments of the effectiveness of sanctions. By contrast, many advocates of sanctions cite the high-profile South Africa case as evidence that sanctions can work.9 To be sure, sanctions may have contributed to change in that instance. But the rapidity of change within South Africa cannot be connected to any meaningful ratcheting up of sanctions, which suggests that factors other than sanctions mattered as much or more. Moreover, even if sanctions did contribute to political change in South Africa, it is not obvious that all of the specific sanctions did so or did so equally or that they did not have undesirable side effects--for example, in retarding the emergence of a large middle class--along the way.
The South African case highlights a crucial problem for those who study sanctions. It is often impossible to isolate the effect of sanctions as distinct from the many other domestic and international factors at work in a given situation. It is similarly difficult to distinguish between the effect of one sanction and another. Still, it is necessary to try to measure the impact of sanctions--the frequency of their use demands it--even as one acknowledges the difficulty.
The purpose of this volume is to explore the growing importance of economic sanctions as a tool of American foreign policy. No other country uses economic sanctions so frequently--and no other country possesses America's power and influence. The goal is to derive insights and lessons drawn from recent American use of economic sanctions and to suggest guidelines for when and how sanctions should be used by the United States in the future. In so doing, an effort will be made to avoid broad generalizations about whether sanctions "work." (The most influential study thus far published on the subject concludes that economic sanctions have worked to some extent about one-third of the time.)10 As is the case with most any other policy tool, the answer to the question "Do sanctions work?" must necessarily be "It depends." The goal of this volume is to determine just what it is that the impact of economic sanctions most depends on and to make policy-relevant recommendations based on these conclusions.
When assessing the impact of sanctions, it is important to avoid being more demanding of sanctions than of the alternatives. As David Baldwin has usefully pointed out, any judgment of the utility of sanctions should not be made in isolation but compared to what could have been expected from using other policy tools, including private and public diplomacy, covert action, and military intervention. Thus, what is required is not just a weighing of the costs and benefits of a particular sanction but a comparison of the likely costs and benefits that would result from doing something else or nothing at all.11
One priority of this study is to highlight precisely what determines the effectiveness of sanctions, be it the scale of the goals, political and economic characteristics of the target, the nature and severity of the sanctions themselves, the degree of multilateral support, the source of any legal foundation, the duration the sanction was in place, the availability of military enforcement, or something altogether different. Case studies also will endeavor to demonstrate what particular sanctions accomplished--and what costs were experienced by all involved in the process.
Such analysis is not intended to be an end in itself. A second priority of this study is to generate guidelines for the future use of economic sanctions by the United States. In addition, a related aim will be to identify those reforms necessary to increase the ability of the executive branch and Congress to make intelligent decisions about the use of sanctions and to implement such decisions more efficiently.
The decision to focus analysis on a relatively recent period--one can fairly date the end of the Cold War to 1989--reflects the widespread use of sanctions in this period and the changed context.12 The end of the Cold War and the demise of the Soviet Union altered international relations in basic ways. In many cases sanctions can now be introduced without Russian opposition, be it political (where a Russian veto in the Security Council is by no means automatic); economic (Russia has less of a commitment to relationships that would lead it to provide aid and thereby offset any penalty imposed on one of its allies); or military (Russia is less likely than was the Soviet Union to block any Western or U.S. attempt to enforce a trade-related sanction). In this sense at least, the end of the Cold War should make sanctions an instrument of greater potential impact.
The focus on the contemporary era reflects one other factor, namely, changes in the structure of international society. There is a greater number of states and nonstate actors as well as an increase in the volume of world trade and economic activity more generally. At least in theory, this greater degree of globalization (and the somewhat reduced centrality of the nation-state) ought to have an adverse impact overall on the effectiveness of sanctions. A target state now has many more potential suppliers and markets--and a would-be sanctioner has many more entities to enlist before sanctions are likely to be effective.
To help provide a basis for judgments and recommendations, this study draws heavily on eight cases: China, Cuba, Haiti, Iran, Iraq, Libya, Pakistan, and the former Yugoslavia. These eight cases are among the most prominent examples of sanctions used by the United States in the postCold War world. They are also quite different from one another in important aspects, something that is necessary if general propositions are to emerge.
China is a case where the United States introduced sanctions in part because of proliferation-related activity. In addition, sanctions were introduced for human rights reasons following the June 1989 suppression of dissent in Tiananmen Square. The case is useful in adding to what we know about the utility of sanctions in promoting U.S. interests in both these areas--and, perhaps more important, to the utility of introducing sanctions against a major country with whom the United States has a broad range of important or even vital interests.
Cuba is the case in which sanctions have been in effect for the longest period. It is also a case in which the United States stands alone, where Congress and public opinion have played a major role, and where (similarly now to Iran and Libya) U.S. law (the Helms-Burton legislation) would sanction not just Cuba but those countries, firms, and individuals who choose not to comply with U.S. sanctions. It also highlights one of the basic foreign policy questions of our era, namely, whether economic sanctions and policies of denial are more likely to promote desired political and economic changes in a society than policies of constructive, conditional engagement in which political and economic incentives (including the removal of sanctions) also are used to bring about desired reform.
Haiti demonstrates the phenomenon of unintended consequences, in this case, the torrent of refugees who headed for Florida. Haiti, though, is an important case for another reason. It highlights what can be the blunt nature of the sanctions tool. Political leaders and other elites often are able to shield themselves from the worst effects of broad sanctions, something most of the population is unable to do. Haiti also highlights the potential for sanctions to be designed so as to narrow their impact on select individuals or groups in a society.
Iran represents a unilateral, congressionally driven approach to sanctions by the United States. Washington has not been able to persuade most other nations that Iran's behavior, including its support for terrorism, subversion, and opposition to the Middle East peace process, warrants sharp economic penalties. As a result, the effects of sanctions on Iran are less clear-cut, although there have been consequences for U.S. relations with several of its traditional friends in Europe.
Iraq presents an almost archetypical case of "ideal" sanctions. Iraq's 1990 invasion and occupation of Kuwait constituted a clear-cut violation of a widely held international norm. Sanctions were introduced with full U.N. Security Council backing. Iraq's economy was highly dependent on the ability to sell oil. The sanctions were comprehensive and enforced militarily. Still, sanctions proved unable to persuade Saddam Hussein to vacate Kuwait, even when the alternative was war with the United States and a powerful international coalition. This is not the same as saying the sanctions failed completely, however, especially as regards those additional sanctions levied against Iraq in the aftermath of Desert Storm. Sanctions against Iraq have had multiple effects, and the case shows how sanctions can work in some ways even if they do not achieve their stated or maximum objectives.
Libya is one more case of sanctions introduced against an authoritarian, rogue state in the Middle East. Various sanctions were introduced at various times in response to a number of Libyan actions, including support for terrorism, development of chemical weapons, and subversion of its neighbors. In addition, strong evidence of Libyan complicity in the destruction of Pan Am Flight 103 over Lockerbie, Scotland, in 1988 led to additional sanctions. Like those directed toward Iraq, at least some of the sanctions enjoy broad international support. Like those directed toward Iran, though, some are solely American, introduced as a result of congressional initiative, and are causing significant problems for U.S. relations with several of its principal allies who are unwilling to further isolate Libya economically or politically.
Pakistan is a case in which sanctions have been introduced by the United States through legislation as a result of Pakistan's efforts to develop a nuclear weapons capability. Stemming such proliferation is a major goal of American foreign policy. This case offers insights into the utility of sanctions for this purpose--but also into the importance of weighing particular sanctions against the alternatives and how sanctions can adversely affect U.S. interests in a country beyond the policy concerns that prompted their use in the first place.
The former Yugoslavia, like Iraq, is a case in which economic and military sanctions were introduced with broad and formal international support. It offers insight into the potential and limits of sanctions as a coercive tool and as an adjunct to diplomacy and conflict resolution. Just as important, this case is also noteworthy for the phenomenon of unintended consequences, namely, that sanctions--specifically, the arms embargo that hurt Bosnia far more than either Croatia or Serbia--often have effects not anticipated and not necessarily desired by the United States.
- A Catalog of New U.S. Unilateral Economic Sanctions for Foreign Policy Purposes 199396 (Washington, DC: National Association of Manufacturers, 1997).
- Also excluded from this study are general export controls, measures put in place by the U.S. government (often in association with others) to slow or disrupt the efforts of target states to acquire or develop technologies involving selected conventional armaments, chemical, biological and nuclear weapons, and/or advanced delivery systems. Such controls are not linked to altering or punishing particular behavior but are intended to further the foreign policy objective or norm of discouraging the proliferation of potentially destabilizing technologies and weapon systems.
- See report of the President's Export Council, prepared with the assistance of Don Zarin and Meha Shah, U.S. Unilateral Economic Sanctions: A Review of Existing Sanctions and Their Impacts on U.S. Economic Interests with Recommendations for Policy and Process Improvement, Appendix I, Survey of U.S. Unilateral Economic Sanctions (Washington, DC: The President's Export Council, January 11, 1997).
- See Paul Blustein, "Thinking Globally, Punishing Locally," Washington Post, May 16, 1997, pp. G12.
- National Conference of Catholic Bishops, "The Harvest of Justice Is Sown in Peace: A Reflection of the National Conference of Bishops on the Tenth Anniversary of The Challenge to Peace" (Washington, DC: United States Catholic Conference, 1994).
- See, for example, Sidney Weintraub (ed.), Economic Coercion and U.S. Foreign Policy: Implications of Case Studies from the Johnson Administration (Boulder, CO: Westview, 1982).
- For basic background, see Erin Day, Economic Sanctions Imposed by the United States Against Specific Countries: 1979 Through 1992 (Washington, DC: Congressional Research Service, 1992).
- For background, see Margaret P. Doxey, Economic Sanctions and International Enforcement (London: Oxford University Press, 1971); Donald L. Losman, International Economic Sanctions: The Cases of Cuba, Israel and Rhodesia (Albuquerque, NM: University of New Mexico Press, 1979); Johan Galtung, "On the Effects of International Economic Sanctions: With Examples from the Case of Rhodesia," World Politics 19 (April 1967), pp. 378416; and Robin Renwick, Economic Sanctions (Cambridge, MA: Harvard University Center for International Affairs, 1981).
- See, for example, Jennifer Davis, "Squeezing Apartheid," Bulletin of the Atomic Scientists 49, no. 9 (November 1993), pp. 1619. For books that place the effects of sanctions on South Africa in a larger perspective, see Patti Waldmeir, Anatomy of a Miracle: The End of Apartheid and the Birth of a New South Africa (New York: W.W. Norton, 1997), and Allister Sparks, Tomorrow Is Another Country: The Inside Story of South Africa's Road to Change (New York: Hill & Wang, 1995).
- Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott, Economic Sanctions Reconsidered: History and Current Policy, (Washington, DC: Institute for International Economics, 1990, 2nd ed.). This relatively positive assessment is itself hotly disputed on grounds that the authors were overly generous in judging what constitutes "success" and in not properly disaggregating the effects of sanctions from the impact of the threat or use of military force. See Robert A. Pape, "Why Economic Sanctions Still Do Not Work," International Security 22, no. 2 (Fall 1997), pp. 90136. On this general question also see Maki on Amerongen, "Economic Sanctions as a Foreign Policy Tool," International Security 5, no. 2 (Fall 1980), pp. 159167.
- For assessments of recent experience with sanctions, see David Cortright and George A. Lopez (eds.), Economic Sanctions: Panacea or Peacebuilding in a PostCold War World? (Boulder, CO: Westview, 1995); Elizabeth S. Rogers, "Economic Sanctions and Internal Conflict," in Michael E. Brown (ed.), The International Dimensions of Internal Conflict (Cambridge, MA: Center for Science and International Affairs, 1996), pp. 41134; "Sanctions: Do They Work?" Bulletin of the Atomic Scientists 49, no. 9 (November 1993), pp. 1449; John Stremlau, Sharpening International Sanctions: Toward a Stronger Role for the United Nations (New York: Carnegie Corporation, 1996); and Lisa L. Martin and Jeffrey Laurenti, The United Nations and Economic Sanctions: Improving Regime Effectiveness (New York: United Nations Association of the United States of America, 1997). Also see the Hufbauer et. al. volume cited in note 10 above.