Effects Of Economic Sanctions Research Articles

Election proximity and the effectiveness of economic sanctions

Election proximity and the effectiveness of economic sanctions

NATURE OF ECONOMIC SANCTIONS AND REASONS FOR THEIR APPLICATION

Economic sanctions are an important tool of international policy aimed at influencing countries that violate international standards or pursue aggressive policy. The essence of economic sanctions is to restrict trade, financial transactions, and investments to stimulate changes in political or economic behavior of the target country. Grounds for the application of economic sanctions may include human rights violations, annexation of territories, military aggression or other actions that contradict international norms. The international community bodies, such as the UN or the European Union, make decisions on the application of sanctions based on a joint assessment of the situation and the desire to preserve world peace and stability. The effectiveness of economic sanctions is a matter of debate, sometimes they can lead to changes in the country's policy, and sometimes they cause suffering to the population. Within the community of nations, it is important to balance the strategies of sanctions and diplomacy to achieve the desired results while maximizing the positive impact on the geopolitical situation.
 At the stage of searching for widely acceptable agreements in global trade and economic relations, mutual consideration of interests becomes especially important. In modern conditions, these spheres have become the object of unprecedented politicization. Considerable attention is paid to the values of free trade, which nowadays often become hostages of trade conflicts and unfair competition. Recently, sanctions have gained an important role in international economic relations. Motives for applying sanctions, including economic ones, can be diverse and depend on various factors, the main of which are political considerations. In most cases, economic sanctions are determined by political goals that are accomplished through economic pressure.
 The very term "sanctions" and their mechanism in the international sphere combine regulatory, political, and economic aspects, forming the interdisciplinary nature of this phenomenon in theoretical terms.

미국의 경제 제재 활용 동인(動因) 연구

The use of economic sanctions has increased significantly, and it is worth noting that the United States is the country that uses them the most. Why does the United States frequently use economic sanctions as a foreign policy tool despite decades of debate over the effectiveness of economic sanctions? This study suggests that the U.S. government's decision to impose economic sanctions is influenced by domestic political and economic factors and not necessarily by external pressures. To this end, economic sanctions against Iraq in 1990 and Iran in 2011 and 2012, both imposed by the United States, were selected as representative cases for comparative analysis. The U.S. administrations used economic sanctions to divert constituencies’ attention during times of election periods and economic downturns, even though they were in different diplomatic environments. In other words, even if tensions between the United States and its targets are high, the need for the United States to implement economic sanctions may not increase if domestic political and economic factors do not work. In this regard, it is necessary to closely observe various domestic factors that can drive the use of U.S. economic sanctions in the face of rising tensions between countries in the global economy and security sector in recent years.

The human consequences of economic sanctions

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.

Understanding Economic Sanctions on Iran: A Survey

Abstract This paper surveys the literature on the economic effects of sanctions on Iran, with a principal focus on those imposed after 2006. We discuss the challenges of isolating the impacts of sanctions and evaluate recent methodological approaches used to measure causal effects. Specifically, we focus on the application of the synthetic control method to disaggregate the exogenous and endogenous factors responsible for economic underperformance in Iran. We review studies on the macroeconomic impacts of Iran sanctions and examine those that focus on the sectoral effects of sanctions. Our survey reveals a large and growing body of literature that remains incomplete. There are significant gaps in the existing research on the impact of sanctions. Iran will likely remain the most important case study as researchers seek to fill those gaps.

China als Sanktionsmacht: eine Abwägung

Abstract The EU’s search for a new China strategy is driven by the fear of economic dependence on China. There are also concerns about reprisals, particularly in the form of economic sanctions. In official statements, China rejects the use of sanctions and historical data show that it has used sanctions very rarely compared to the USA. On closer inspection, however, it becomes apparent that China does leverage its growing economic power to put pressure on other countries, albeit not in the form of officially declared sanctions. Against the background of empirical studies on the effectiveness of economic sanctions, we discuss the prospects of success of this policy. We show that the vulnerability of Western European countries has increased during the past few decades.

The Effects of Economic Sanctions on Targeted Countries’ Stock Markets

The Effects of Economic Sanctions on Targeted Countries’ Stock Markets

Russian Enterprises in the Spring of 2022: Adapting to the New Wave of Sanctions and Views on the ESG Agenda.

The article analyzes the results obtained by a regular survey of Russian enterprises in the real sector conducted by the Institute of Economic Forecasting, Russian Academy of Sciences. The consequences of economic sanctions against Russia for enterprises are assessed. The views of enterprises on the desirable measures of anticrisis policy aimed at countering sanctions are outlined. Methods for adaptation to sanctions that are applied by the enterprises themselves are described. The opinion expressed by enterprises about the role of the state in the economy is presented. The situation with the investment activity of enterprises is considered. Data on the purchases of Russian and foreign equipment are given, as well as comparative assessments of the quality of this equipment. The views of Russian enterprises on the relevance of the climate agenda are presented, as well as their attitude to the ESG principles. The share of Russian enterprises that publish financial statements on risks associated with climate change as well as nonfinancial statements in the field of sustainable development is estimated. The proportion of enterprises that set themselves the goal of reducing their carbon footprint is revealed.

Economic sanctions and global banking flows: The moderating roles of financial market properties and institutional quality

This paper investigates the effects of economic sanctions (ES) on global banking flows (GBF) using 4022 pairs of 207 countries during the period 1995­2018. We use a structural gravity model combined with the rich Global Sanction DataBase introduced by Felbermayr et al. ES include various forms of sanction, including arms, military, trade, financial, travel, and other sanctions, whereas GBF reflect cross-border lending. Our empirical results show a negative association between ES and GBF. The heterogeneous effects of ES on GBF depend on the types of sanctions. Furthermore, both properties of financial markets and the institutional quality of the target country play a decisive role in moderating the ES-GBF nexus. Specifically, the consequences of ES become more severe when target countries feature a high level of financial market development, more open financial markets, poor credit information sharing, a more competitive banking market, and a high degree of financial openness, while better institutional quality limits the adverse impact of sanctions.

The Effects of Economic Sanctions on Foreign Asset Expropriation

Studies suggest that home countries impose economic sanctions following host state expropriation of home firms. However, and not addressed in the empirical literature, is the possibility that sanctions lead targeted countries to nationalize firms from sender countries. Using bilateral expropriation data from 1985 to 2010, and controlling for endogeneity issues, we find that sanctions significantly increase expropriation risk, encouraging targeted states to inflict pain in a reciprocal manner on sender countries. Expropriations also enable targeted nations to acquire economic assets from foreign firms, undermining the restricting goals of sanctioning states, and provide opportunities for leaders to show political resolve at home by standing up to senders. Our results are robust using monadic or dyadic data and different statistical methods, indicating another sanction-busting strategy used by targeted countries.

Consequences of economic sanctions on minority groups in the sanctioned states

AbstractThis study explores the effects of economic sanctions on vulnerable groups within target states. When a state uses economic sanctions to realize its foreign policy goals, the government in the sanctioned state usually pursues harsh domestic policies against its ethnic minority groups by employing rally around the flag effect policies. Resultant domestic policies work by casting members of minority groups as traitors and then scapegoating them as the cause underlying the sanctions. Many cases have resulted in the mistreatment and death of innocent people due to the target state governments' counter‐sanctions policies at the domestic level. In this paper, I analyze the negative effects of economic sanctions on minority groups with a focus on the economic, political, and social discrimination of minority groups within sanctioned states. I argue that comprehensive sanctions are more harmful than targeted sanctions on the minority groups in sanctioned states. By using panel data and logit regression models, I demonstrate that economic sanctions cause target states to enact policies that are discriminatory against members of minority groups. This study contributes to the literature by identifying the effects of comprehensive and targeted sanctions on minority groups in terms of political, economic, and societal dimensions.

Сучасні тенденції гармонізації ПДВ у країнах Європейського Союзу

Introduction. Socio-economic realities related to VAT fiscal losses, the spread of the 2008 global financial crisis and the economic crisis caused by quarantine restrictions due to the spread of COVID-19 and the consequences of economic sanctions in response to Russia's military aggression against Ukraine have slowed VAT harmonization in the EU countries. Problem Statement. The study is devoted to the issue of establishing preconditions and assessing prospects for new initiatives related to VAT harmonization in the EU countries. Purpose. Coverage of retrospectives, current trends and assessment of prospects for further harmonization of VAT in the EU countries. Materials and Methods. The following general and special methods were used in the research process: analysis, synthesis, grouping, description, comparison, theoretical generalization and abstract-logical. Results. The legislative features of regulating VAT harmonization based on the EU Council Directives are emphasized. The directions of coordination of the VAT administration policy at the Community level are systematized. Retrospectives of forming approaches to establishing the principle of VAT collection, according to which trade in the EU countries should take place, are analyzed as well as indicators of gaps in VAT revenues in the EU countries. The essence of the finalized system of VAT administration in the EU, based on the principle of the destination country, is revealed and the prospects of its implementation are assessed. The peculiarities of the new rules of VAT collection on cross-border e-commerce transactions between business and consumers (B2C) are considered. The current trends in setting VAT rates in the EU countries are highlighted and the prospects for their further harmonization are outlined. Conclusions. The final decision on the introduction of a finalized VAT system for intra-EU trade depends on the effectiveness of VAT on cross-border e-commerce between business and consumers (B2C), which was introduced on 1 July 2021 and is determined by the impact of economic sanctions on the EU market concerning the Russian Federation. Changes in the taxation of e-commerce in the EU may cause the rejection of online marketplace customers from the goods of Ukrainian sellers, and the reorientation to European goods.

How Do Economic Sanctions Affect Public Opinion and Consumer Behavior in Target States? Evidence from China's Economic Sanctions on South Korea

Abstract Previous research shows that economic sanctions affect three facets of public opinion in target states: support for the policy at issue, support for the target government, and hostility toward the sanctioner. We explore the dynamics between the facets of opinion and link them to consumer behavior. How do supportive opinions of the policy and the target government lead to hostility? How does this hostility affect consumers’ propensity to buy the sanctioner's branded products? We examine a case in which China imposed economic sanctions on South Korea in opposition to South Korea's decision to deploy Terminal High Altitude Area Defense. We collect comments from relevant newspaper articles and conduct attitude analysis using machine learning. We conduct difference-in-differences analyses using barcode-level data regarding monthly beer sales, for which we argue boycotts are more likely to occur. We find that a backlash effect in public opinion occurred with respect to two facets of opinion. However, despite the public antagonism, we observe no significant backlash in consumer behavior. These findings imply that effects of economic sanctions in target states are multidimensional and thus it is too simplistic to assess the effectiveness of economic sanctions only by looking at public opinion in target states.

Assessing the extraterritorial consequences of the application of economic sanctions in international trade

The article is devoted to the analysis of the consequences of the application of economic sanctions at the present stage of development of international trade. International practice shows that a significant burden of sanctions falls on the target countries, which leads to a significant reduction in their foreign trade with third countries. Paradoxically, at the same time, for sending countries, there may be an increase in their trade with third countries. The net effect of the imposition of sanctions on international trade is difficult to estimate, since it depends both on the size of the target country of the sending country, as well as on their foreign trade relations with third countries. In the course of our study, it was found that there was no unified theory of economic sanctions, but the practice of their application is possible only when there are economic interactions and interdependence in trade and investment between sending and target countries. At the same time, in recent years, the number of forms and mechanisms for applying economic sanctions has increased. Sanctions have an ambiguous effect on the development of international trade, since they can either increase or decrease the country’s importance in international exchange. As new important lines of research that can better understand the nature and consequences of modern economic sanctions, we note: assessing the impact of sanctions at the microeconomic level; comparison of complex and targeted sanctions, the study of mutual trade and foreign direct investment between sending countries, target countries of sanctions and third countries; analysis of extraterritorial (secondary) effects of economic sanctions. It has also been shown that more significant indirect negative effects of sanctions on the sending country are counter-sanctions of the target country, disruptions in some industries, as well as reorientation of trade to less preferred markets and the need to adapt to new trading partners.

Central Banks policy under sanctions: critical assessment of the Central Bank of the Russian Federation experience

The article provides a critical assessment of The Central Bank of the Russian Federation policy in response to the sanctions of the US, the EU, the UK, Switzerland, Japan, South Korea and a number of other countries. The effect of sanctions on the Russian economy and its financial market is viewed through the prism of credit, interest rate, and currency risk, and the risk of a decline in business activity. Special attention is paid to the inflationary component and inflationary expectations of the Russian Federation, as well as to the forecasts for a decline in business activity in Russia. A critical assessment is given to the actions of the Central Bank of the Russian Federation and the economic bloc of the government of the Russian Federation as a whole in response to the sanctions of the civilized world, which disable the normal existence of the economy and the main purpose of which is not to destroy the economy of the Russian Federation but to ensure the end of hostilities on the European continent. The results of our study will be useful to everyone who studies the problems of the effect of economic sanctions on the resource-based economy and the processes of stimulating political decisions by economic methods.

The Effect of Economic Sanctions on Iran's Formal and Informal Economy

The Effect of Economic Sanctions on Iran's Formal and Informal Economy

The effect of economic sanctions on per capita GDP in the Iranian economy using the Synthetic control method

The effect of economic sanctions on per capita GDP in the Iranian economy using the Synthetic control method

Partial Effects for Binary Outcome Models with Unobserved Heterogeneity

Unobserved heterogeneity is ubiquitous in empirical research. In this article, I propose a method for estimating binary outcome models with panel data in the presence of unobserved heterogeneity, called the Penalized Flexible Correlated Random Effects (PF-CRE) estimator. I show that this estimator produces consistent and efficient estimates of the model parameters. PF-CRE also provides consistent estimates of partial effects, which cannot be calculated with existing consistent estimators. Using Monte Carlo simulations, I show that PF-CRE performs well in finite samples. I also illustrate the performance of PF-CRE in two real-data applications: a small T study on party contacts and tactical voting during the 2015 UK general election and a large T panel dealing with the effect of economic sanctions on government stability. In both cases I find that PF-CRE is a valid approach that reduces bias or generates efficiency gains in the estimation.

Typology and effects of economic sanctions on foreign trade

Economic sanctions are defined in the dictionary of economics, in general, as ,,prohibitive economic measures applied by the international community on the export and/ or import of material goods, services, resources, etc. to or from a particular country”. The types of sanctions range from personal restrictions to almost total bans on international trade with one or more countries, which can be extended even to restrictions on legal rights such as trademark protection and other intellectual property. Sometimes sanctions can be included as part of protectionist measures representing behaviors designed to increase wealth without creating wealth, the most famous cases being attempts to force a country's authorities into desirable political action. Usually, these attempts target political and economic leaders, businesses and assets that are considered vulnerable to external pressures. Although some doubt the effectiveness of sanctions, the prevailing opinion is slightly in their favor.

Rusya'ya Karşı Uygulanan Batı Yaptırımları Hakkında Rus Ekonomistlerin Görüşleri

In March 2014, in response to Russia’s annexation of Crimea and military actions in Eastern Ukraine, the European Council decided to implement sanctions against Russia. The EU criticized Russia’s actions against Ukraine’s sovereignty and independence. In response to the EU’s sanctions, in August 2014 Russia introduced a food embargo on agricultural products from Western countries. The most frequently discussed topic regarding these sanctions is their effectiveness and their impact on the Russian economy. In other words, the experts aimed to identify evidence that Western sanctions do work against Russia and to estimate their effect on the Russian economy. This article discusses the views of Russian economists and political analysts on Western sanctions against Russia. The goal of the article is to present the opinions, analyses, and forecasts of leading Russian experts living in Russia and abroad and who are working for the government and/or in the academic field. The views of several experts were investigated regarding the situation resulting immediately after the imposing of sanctions and regarding perspectives of future development in Russia under the influence of sanctions. This article addresses the impact of some of these Western sanctions on different economic sectors and discusses the overall effect of sanctions on the Russian economy. In particular, the article covers the opinions of Russian economists and political experts concerning financial sanctions and its impact on the Russian banking sector; impact on direct foreign investments; impact on economic and political stability; and the effect from the introduction of Russian agricultural embargo on Western import. One section is focused on the views of economists on effectiveness of sanctions as political tool, and the last section summarizes the main political and economic effects of sanctions on Russia since 2014.