The human consequences of economic sanctions

Abstract

PurposeThe use of economic sanctions has grown dramatically in recent decades. Nevertheless, many arguments are presented in the public policy space regarding their effects on target populations. The author presents the first systematic analysis of the effects of sanctions on living conditions in target countries.Design/methodology/approachThis paper provides a comprehensive survey and assessment of the literature on the effects of economic sanctions on living standards in target countries. The author identifies 31 studies that apply quantitative econometric or calibration methods to cross-country and national data to assess the impact of economic sanctions on indicators of human and economic development. The author provides in-depth discussions of three sanctions episodes—Iran, Afghanistan and Venezuela—that illustrate the channels through which sanctions affect living conditions in target countries.FindingsOf the 31 studies, 30 find that sanctions have negative effects on outcomes ranging from per capita income to poverty, inequality, mortality and human rights. The author provides new results showing that 54 countries—27% of all countries and 29% of the world economy— are sanctioned today, up from only 4% of countries in the 1960s. In the three cases discussed, sanctions that restricted the access of governments to foreign exchange limited the ability of states to provide essential public goods and services and generated substantial negative spillovers on private sector and nongovernmental actors.Originality/valueThis is the first literature survey that systematically assesses the quantitative evidence on the effect of sanctions on living conditions in target countries.