What makes an economic sanction effective?

Abstract

Purpose This paper aims to elucidate the practical and theoretical mechanisms which contribute to the perception of an economic sanction’s effectiveness as a foreign policy tool. Design/methodology/approach This paper is divided into three sections, the first two of which are heavily based on the current academic literature and media presentation of sanctions. The third section is rooted in the empirical approach presented in the first author’s exploratory work, Methods of Money Laundering (2021). Findings Economic sanctions cannot be perceived as effective when the standard for efficacy remains undefined and sanction circumvention remains feasible. The public perception of sanctions is characterized by a series of assumptions as well as conflict foreign policy objectives, which cultivate an economic theory that is benefited by a practical exploration of the routes of circumvention. Originality/value The efficacy of economic sanctions is not a stable equation, but rather the application of an economic tool which is dependent on its context. Paths of sanction circumvention remain open due to weaknesses in compliance regulation. These paths continue to undermine the credibility of sanctions and, ultimately, their efficacy.