Economic Sanctions: A deeper dive into a controversial policy

Introduction

Post WWII, America as a superpower has taken a role as a global policeman. In the last century, we’ve cited moral responsibility to intervene wherever needed. We spend more on defense spending than the next 7 countries in the world. Of course, our success in intervention is a question of contention, from propping up dictators in Latin America, fighting 2 ineffective and largely unpopular wars in Korea and Vietnam and launching the widely controversial war on terror. Yet still, the United States wields unprecedented power-not just physically through military might, but also economically. The list of economic tools is exhaustive, with the United States engaging in foreign investment spending to trade embargos to…. economic sanctions. Like other global interventions, our use of such sanctions is widely debated upon. 

What are sanctions?

But of course, before we get into the question over the effectiveness of economic sanctions, it’s important to know what they actually are. But unfortunately, that’s where a small problem arises. See, the unfortunate truth is that among researches and the literature base, there is no actual  lit consensus for what an economic sanction comprises. Throughout the years, researchers have interpreted economic sanction policy in very distinct ways, with certain actions changing status as to whether or not they should be considered a sanction. In her 2009 analysis over the utilization of sanctions as an economic policy in the Pacfic, appropriately titled “American Sanctions in the Asia-Pacific”, Taylor prefaces her study with a acknowledgement about the unfortunate nonconformity of sanction terminology. Taylor notes that one prominent expert, Sidney Weinstraub, argued for a “semantic taste dependent on the predilection of the beholder”. On the other hand, the most prominent sanction author contended the converse; the term sanction is so broadly used that one might as well just avoid its use for sake of confusion. The  disagreement is well embodied by the feud between Robert Pape and Kimberly Ann Elliott- Pape was very critical of a study undertaken by Elliott during the 1980s. The reason? In Pape’s opinion, Elliot’s study employed a far too broad use of the term sanction, and ended up encompassing behaviors and international policy that would normally not be considered sanction-esque. Elliot disagreed however, criticizing Pape for a rigid and inflexible view of sanctions. Yet despite the obvious importance of having a consensus in terminology, the debate over the composition of sanctions continues. 

For the context of this article however, a generic understanding should be sufficient. As it’s generally understood, an economic sanction withdrawal or hold on financial relations and trade for a variety of objectives. Most often, actors have imposed sanctions in an effort to coerce or punish an entity that has violated an international norm, and oftentimes sanctions have specific policy objectives. These foreign policy goals include: counterterrorism, counternarcotics, nonproliferation, cybersecurity, and democratization. Policymakers typically view sanctions as a “lower cost” option in comparison to war, and sanctions are often employed during a period of decision making for international actors. 

Beyond the general definition, most experts agree that there are 4 general types of economic sanctions. Sectoral, Smart, Primary, and Secondary. These 4 classifications represent the wide range and versatility that sanctions can provide, from preventing trade with an entire country, or rather a select individual or industry. However, it is important to understand that due to the flexibility of terminology, functionally similar actions may be grouped into different classifications.  In recent years, sanctions have primarily shifted toward smart/individual sanctions as opposed to primary sanctions, with the Trump administration particularly furthering to shift to targeted sanctions against individual agents, although he has also dipped back into Secondary ones. There is also a distinction between unilateral sanctions and multilateral sanctions-unilateral sanctions are imposed by a single actor, whereas multilateral sanctions are supported by a group effort. Multilateral sanctions have been found to generally have a higher rate of success. 

But where did the popularity of sanctions as an economic policy even come from? The answer is actually quite interesting-the idealist concept of a “sanction” has origins as early as ancient Greece, with Athens. However, the modern day view of sanctions as an international tool was popularized post World War 1, based upon the effectiveness of the British blockade on Germany. In fact, this influence led to Article 16 in the original League of Nations arguing for an “automatic and collective embargo” against nations threatening aggressive war, with a cutoff of “all financial, commercial, or personal intercourse”. Sanction use would only grow more and more popular, with the height of the Cold War, fall of the USSR, and conflicts in the Middle East. 

Unfortunately, the literary consensus among experts is that economic sanctions, despite their noble intentions, are often ineffective in achieving their objective. In a study from Cato Institute conducted by researcher Richard Hanania, Hanania found that only 5 out of 115 cases could stand up to empirical scrutiny in terms of modest political goals. The reason? Private military funding, rival bail outs, the list is exhaustive. I’ll discuss the sanctions debate more later, but for now, this study would seem to indicate that economic sanctions have a success rate of 4.3%. 

Benefits

Justification for sanction imposition is quite straightforward. In the most basic terms, policymakers view sanctions as a bandage to resolve a solution. Two very basic examples of the benefits of economic sanctions can be observed through human rights credibility and terror. 

First, the most prevailing reason behind why the United States utilizes sanctions is for purposes of human rights. Most often, the United States has sanctioned opposing nations under the justification of severe human rights violations, as seen with Iran, Syria, and Venezuela. This is especially significant when viewed under the context of individual sanctions-high ranking officials are often the ones complicit in such horrendous human rights violations, and are thus explicitly targeted through sanctioning. Whether or not sanctions are actually effective in resolving these violations is a topic for contestation, but many argue that an international leader like the United States has the moral responsibility to shun and withdraw financial relations  with countries and actors accused of such actions. 

Another prevailing argument in favor of sanctions is combatting terrorism. The logic is quite simple – placing economic sanctions on countries that support state-sponsored terrorism sets a precedent in opposition of such actions, and decreases the financial capacity for those nations to support terrorist organizations. This argument can be observed with the consequences of sanctions in consideration of Hezbollah – pressure from sanctions on Nicholas Maduro have weakened Hezbollah’s operations, and the relationship between the two actors. 

Harms

There has to be a reason why so many are vehemently opposed to the idea of economic sanctions. In all fairness, there are plenty of very solid arguments as to why sanctions do far more harm than good. Let’s go down the list. 

One very common argument is that most sanctions are imposed on non-western countries, and are thus implemented through racist/orientalist mindsets. Honestly, I don’t mean to interject my opinion, but this is probably not the greatest argument-it’s really not that hard to see why. 

A better point of contention is that sanctions often do the opposite of their original goal – quite unfortunate. Hannia, who we cited earlier, argued that economic coercion is largely doomed to fail. In fact, Hannia found that economic sanctions are empirically correlated with greater levels of repression and mass killings, as governments are desperate to hold on to their power. Furthermore, economic sanctions often reverse democratization efforts, as seen in Iran through the increase in power of the Islamic Revolutionary Guard. 

Additionally, another concern is the chilling of humanitarian aid both through direct actors and third-party organizations. Alice Debarre, a senior policy analyst, found a very blatant chilling effect from the use of sanctions. Most humanitarian groups choose to err on the side of caution against a sanctioned country, out of fear of jeopardizing their operations elsewhere. Even with built in humanitarian exceptions, the sanction stigma has chilled the inflow of humanitarian aid to countries like Somalia and Afghanistan. 

Finally, in pure numbers, sanctions have had… computationally devastating effects. Referencing Hannania’s study once more, economic sanctions killed 500,000 children in Iraq, kill over 1000 children a month in Haiti, and have caused an excess of 40,000 deaths in Venezuela. In a pure aggregate comparison to war, Hanania argues that sanctions over the last two decades have been deadlier than most wars over the same period of time. 

Of course, individuals in favor of economic sanctions will have common refutations to common opposing arguments. I’ve included a few examples, but most arguments generally fall under these 4 principles. 

The first argument often contended is that anti-sanction authors conduct their respective analyses through far too harsh and critical lenses. The base idea is that anti-sanction proponents believe that sanctions should alone be able to resolve the existing issues, when in reality, a combination of factors is needed, especially since sanction’s failures can often be attributed to incompetent implementation. Furthermore, sanctions may produce subtle yet productive shifts in behavior, like easing Iran out of isolationist attitudes. 

Next, there would logically exist a variety of large studies in favor of sanctions, in order to combat those against them. Veteran journalist Mark Tarralo wrote of one such study, citing that a consensus found that sanctions could produce meaningful behavior about 40% of the time. In fact, there are plenty of examples where sanctions have produced substantive changes. Tough sanctions against Haiti gutted the political elite and collapsed support for military leaders. Iraq has complied with US directives to not acquire nuclear weapons. In Yugoslavia, sanctions brought Serbs to the negotiating table for the Dayton Accords. The list goes on. 

The third argument made is that any humanitarian harms brought upon by sanctions would have occurred in either world, though perhaps to a lesser extent. Authoritarian leaders in Iran, Venezuela, North Korea don’t exactly have their people’s best interests in mind. In fact, the United States has imposed sanctions on Iran specifically to end their use of child soldiers. It seems somewhat illogical to blame the entirety of a negative situation on the shoulders of sanctions, when its root cause is quite different. 

Finally, many proponents for sanctions have also advocated for economic sanction reform. The Congressional Oversight of Sanctions Act, HR 5879, advocates for a variety of changes to current sanction policy. The act establishes congressional control over sanction implementation, and requires a joint resolution for new imposition. It reauthorizes humanitarian exceptions for transactions related to infrastructure and humanitarian aid, and further requires the conducting of impact studies to measure the full consequences of sanctions. 

Case study: Iran

Now let’s take a look at a case study: Iran. The Islamic Republic of Iran has had one of the most prolific histories of having sanctions imposed, and for a variety of reasons-from human rights violations to corruption and attempts at nuclear acquisition. In the status quo, the majority of sanctions have been implemented post withdrawal of the Iran Nuclear Deal, of JCPOA. Iran is known to have all 4 major types of economic sanctions, but the most recognizable is perhaps the massive embargo on practically all dealings by the United States. However, I’ll be primarily focusing on the secondary sanctions that have devastated Iran’s medical infrastructure and healthcare system, particularly in the context of COVID-19. I’ll divide this into the harms by Coronavirus, and the harms of economic sanctions on medical care in general. 

To frame the scenario, according to Marc Champion, analyst on international affairs, Iran’s initial response to the pandemic was… disappointing to say the least. The nation failed to quarantine or stop flights and quickly allowed individuals to return to work-all of which has led to a massive surge in cases, hitting record numbers. As a result, the already strained healthcare system has weakened even further from attempting to withstand the full brunt of a global pandemic. Now, that wouldn’t be too much of an issue, as you would expect Iran to simply be able to import in the needed supplies. But that’s where sanctions come into play. See, Vira Ameli, epidemiology expert, argues that traditionally, production efforts of supplies combating a pandemic need to be rapidly increased or “ramped up”. However, Ameli contends that recent economic sanctions have prevented the timely import of Coronavirus test kits, which consequences I shouldn’t need to explain. The Human Rights Watch furthered these findings, arguing that economic sanctions have worsened the government’s incompetency, and have led to a plunge of medical supplies needed for the detection and treatment of the virus. Worryingly, they noted, priorly available waivers for limited transactions were no longer available. Current estimates find the death toll from COVID-19 as high as 3.5 million should immediate action not be taken. 

Even out of the context of the virus, the consequences from economic sanctions haven’t been pretty. The Human Rights Watch notes that sanctions have massively restricted financing and purchasing power, leading to both individuals and the country as the whole being unable to purchase needed supplies and equipment, leading to a spike in inflation by 30%. But that’s not all: worse yet, there are two other crucial factors in play: overcompliance, and counterterror labeling. Normally, humanitarian aid and medical efforts are factored in as exceptions whenever sanctions are considered an imposed. But that’s where the problem arises-overcompliance and counterterror labels either diminish or completely remove these exceptions from play. The Human Rights Watch documents that although such exceptions exist, international banks and companies exercise excess caution when dealing with sanctioned countries, significantly reducing Iran’s access to currency. Worse, independent humanitarian organizations have also had their efforts limited-because they rely upon the same banks that are terrified to engage in financial relations with Iran, many of these organizations have been left completely unable to transfer needed funds. In fact, the report listed that an unnamed European company refused to sell specialized bandages for individuals with epidermolysis bullosa, not because they weren’t technically allowed to, but rather out of simple fear. Finally, vague classifications of the IRGC as an foreign terrorist organization (FTO) could impact up to 11 million Iranians. Medicines protection under sanctions exempted if they enter through a targeted entity, which is precisely what this classification does. Many independent humanitarian organizations have spoken out against this, arguing that governments are unknowingly sabotaging their efforts by failing to properly specify whether an organization’s staff will be in violation of the sanction. Worse, recent classification of the central bank as an FTO means that Iran has lost its last financial institution able to engage in foreign exchange-in short, a humanitarian exception is moot and meaningless. But what has this actually done? The effects are pretty disastrous-although basic medical supplies are still somewhat available, there have been vocaal concerns about the collapse of the entire healthcare system from its current strain. Citizens with specialized medical conditions have been hit the hardest. As mentioned before, individuals with epidermolysis bullosa cannot purchase needed bandages, leading to sepsis and increased risk of bacterial infection. Patients who suffer from epilepsy suffer frequent seizures that can cause permanent brain damage due to lack of access of specialized foreign medication. On a broader level, severe complications have been reported due to use of “non standard anesthesia” from necessity due to the lack of access to higher quality medicine. 

Most importantly however, there is sufficient empirical backing to indicate that a removal of economic sanctions would decrease suffering in the region. Why? Well, the Human Rights Watch notes that historically, sanction implementation and removal by the United States sets international precedents – that is, international trading policy with Iran follows US models. Prior to the JCPOA, Iran faced a similar medical scenario, with widespread disruption of infrastructure and lack of access to medical resources. However, the situation improved with the withdrawal of many sanctions upon the signing of the JCPOA, and degraded once more once Iran and the United States withdrew from the deal. This correlative effect seems to indicate that the United States plays a major role in the quality of life in Iran through it’s sanction policy. 

On the converse, there are plenty of arguments in favor of maintaining sanctions. I’ve isolated the three most frequent – oil, individual targeting, and conditions. 

The Oil scenario is pretty simple to understand. Philip Brown, a specialist in Energy policy, argues that current economic sanctions placed on Iran have pressured oil importers, and reduced Iran’s current oil exports to an all time low, decreasing exports by over 80%. Removal of economic sanctions would lead to the reentry of far more bpd of crude barrel than the 1 million of bpd needed to decrease oil prices. Brown continues his analysis by arguing that OPEC wouldn’t check fully, and the resultant effect would be a massive downward spike in oil prices (which we know would be bad).

The individual targeting argument is that although some economic sanctions are misguided in Iran, there are definitively many individual, or smart sanctions, that have had an important effect. In particular, the individual sanctions placed upon Supreme Leader Khamenei and top military commanders by executive order have been quite effective. Analyst Geneive Abdo noted that as a result of Trump’s aggressive sanctioning, targeted commanders have not only had difficulty conducting business out of the country, but also within. In Khamenei’s particular case, sanctioning has created a stigma that has damaged his public perception and credibility to the people of Iran. Furthermore, economic sanctions have curtailed Khamenei’s access to journalists- a surprisingly large blow, as one of his primary assets to the Islamic republic was Khamenei’s ability to speak fluent english to the press. 

Finally, some moderates on the sanction debate have argued for conditioning sanction removal. In other words, sanctions should be used as physical leverage toward coercing Iran to take a certain action. Last year, the United States, Iran, Germany, France, Britain, Russia, and China all discussed the framing of a new agreement at the UN General Assembly, where Iran would agree to permanently give up on nuclear proliferation in exchange for the United State’s lifting its sanctions. Of course, this begs the question as to why Iran proliferating is even important. The main fear of Iranian proliferation is that of an Israeli lashback and retaliation. Tehran has argued that it has no intention of stopping it’s proliferation efforts, with the threat of enriching uranium up to 60%. That’s problematic – according to an analysis done by Adam Harmon, Israeli leaders believe that a nuclear Iran is an existential threat, and the public agrees. Additionally, the populace has indicated that it is willing to face the repercussions. Past precedent is also worrying – Israel has a history of preemptive strikes and use of force. Although somewhat low, there is a decent risk of a nuclear exchange between these two nations. 

Conclusion

Let’s be real – sanctions aren’t an easy topic to digest, nor will a consensus be reached anytime soon. The terminology is vague, its application is widely contested, and the consequences of such policy actions are intensely debated. Now I won’t tell you how you should side on the economic sanction debate –  I leave that up to you, as the reader, to decide for yourself. What is clear however, is that the debate will continue as to whether sanctions further noble efforts to protect human rights, or harm the very ones that they seek to protect. 

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