Kimberly Ann Elliott
After forty years in which it imposed economic sanctions only twice, the United Nations Security Council has approved mandatory economic sanctions on six occasions between 1989 and 1993. Sanctions in most of the post-World War Π period had a distinctly unilateral flavor, often with a Cold War twist. Of 104 sanctions episodes from World War Π through the UN embargo of Iraq, the United States was a key player in two-thirds. In 80 percent of U.S.-imposed sanctions, the policy was pursued with no more than minor cooperation from its allies or international organizations. Since 1990 the United States has imposed new unilateral sanctions in only one case (against Russia and India over a sale of missile technology), and expanded them in another (Cuba). If the trend toward multilateralism continues, this will mark a sharp reversal in the use of economic sanctions for foreign policy goals in the post-World War II period.
Senders usually have multiple goals and targets in mind when they impose sanctions, and coercion is not always at the top of the list. When selecting a sanction, a government or international oiganization should keep in mind the actual, as opposed to formal, primary target. A unilateral sanction may, in fact, be intended to coerce the government of the country against whom sanctions are imposed. Alternatively, there may be no expectation of successfully influencing the apparent target. Instead, the sanctions may be aimed at third countries that the sender hopes to deter from engaging in objectionable behavior; or they may be intended to enhance the sender's credibility among its allies. Finally, the sanctions may be a response to domestic political pressures.
Different types of sanctions, having greater or lesser economic impact, may be appropriate in different circumstances. Sanctions imposed for symbolic or signalling purposes should be just as carefully crafted as those designed for coercive purposes. Although sanctions may be the best or even the only option in some cases where it is necessary to do something, not just any sanction will do. Prudence argues that a nation carefully scrutinize unintended costs and consequences before choosing a particular measure. It makes sense to tailor sanctions carefully to the objective they are genuinely intended to achieve.
The possibility that the formal target may not be the real intended target raises problems for researchers trying to assess the effectiveness of sanctions. Some sanctions maybe judged to be a failure even though they were never intended to succeed in the sense of producing a change in the target's behavior. Nevertheless, in what follows, "success" is judged on the basis of whether sanctions appeared to contribute to the achievement of stated foreign policy goals, including changes in the policies, capabilities, or government of the target country. This can be justified on several grounds. First, it is difficult, if not impossible, to know whether a sanction successfully deterred a third party from taking objectionable actions in most cases. Second, a sanction imposed in response to domestic political pressure is almost by definition a success. Even in those two cases, however, it could be argued that sanctions that fail to influence the formal target will also be unlikely to deter third countries or to satisfy outraged domestic political constituencies. Finally, the United Nations and other international organizations trying to enforce international law are interested not only in punishment of transgressors, but in compliance. In other words, they would usually like to see changes in the behavior of the target country.
The success of an economic sanctions episode, as viewed from the perspective of the sanctioning country, has two parts: the extent to which the foreign policy outcome sought by the sender country was, in fact, achieved; and the contribution made by the sanctions (as opposed to other factors, such as military action). The Hufbauer, Schott, Elliott methodology uses a simple index system to rank each of these elements on a scale from 1 (failed outcome; zero or negative sanctions contribution) to 4 (successful outcome; significant sanctions contribution). By multiplication, the two elements are combined into a "success score" that ranges in value from 1 to 16. We characterize a score of 9 or higher as a "successful" outcome. A score of 9 means that sanctions made a modest contribution to the goal sought by the sender country and that the goal was, in part, realized; a score of 16 means that sanctions made a significant contribution to a successful outcome. By contrast, a score of 1 indicates that the sender country clearly failed to achieve its goals and that sanctions may even have left it worse off than before. In some cases the sender may have achieved some or all of its objectives, but the case will still fall into the failed column if sanctions played only a minor role in the outcome. In fact, this occurred in all of the episodes we scored an 8 and in about a third of those scored a 6.
Since sanctions cannot coerce the surrender of territory as easily as they can free a political prisoner, the first step was to arrange the cases into five categories based on the objective sought: (1) modest, including settling expropriation disputes, improving human rights, and inhibiting nuclear proliferation; (2) destabilization of the target government; (3) disruption of relatively minor military adventures; (4) impairment of the military potential of an adversary; and (5) "other major goals," for example, ending apartheid in South Africa. In addition to the goal, several factors were identified that might be expected to affect the outcome of a sanctions effort. Information on six political and five economic variables was compiled for 115 episodes of foreign policy sanctions beginning with World War I and continuing through 1989.2 Analysis of the cases indicates that sanctions are most effective when:
Although sanctions overall were successful in 34 percent of the 115 cases studied, success has become increasingly elusive in recent years. If one splits the sample of cases roughly in half, into those initiated before 1973 and those begun after that date, a striking difference emerges. Of the sanctions episodes in the pre-1973 period, 44 percent ended successfully, whereas the success rate among cases begun after 1973 was just under 25 percent. Even more striking is the decline in the effectiveness of sanctions imposed in pursuit of modest goals, from 75 percent to 21 percent, most of which are accounted for by the United States.
In the decades following World War II, the United States attempted to impose its will on a wider variety of targets and sought a broader array of objectives than did any other country, including the Soviet Union, which generally confined its use of sanctions to trying to keep rebellious allies in line. Reflecting its roles as economic hegemón and political and military superpower, the United States relied less on international cooperation and, on average, had more distant relations and weaker trade linkages with its targets than was observed with other users of sanctions. In the early 1970s the United States sharply increased its use of sanctions in pursuit of relatively modest goals. Détente with the Soviet Union briefly allowed the United States to tum its attention to other matters, such as human rights violations and nuclear proliferation. Because the targets of these policies were more likely to be found among the developing countries, they tended to be economically weaker and less stable than the average target in earlier years. Détente, together with economic problems at home, made the Soviet Union less and less willing and able to play "the white knight" and provide offsetting assistance to target countries.
All of these factors should have boded well for U.S. sanctions in the 1970s. All too often, however, resort to economic sanctions appears to have been part of an effort to conduct foreign policy "on-the-cheap." After the withdrawal of American troops from Vietnam, U.S. presidents faced strong congressional and public opposition to military intervention, as well as a variety of economic problems, including stagflation, fiscal constraints, and increasing trade deficits. Economic sanctions do not directly put one's own citizens lives at risk and, nearly as important, they are typically off-budget. But effective economic sanctions do not often come cheap. Repeated failure, moreover, erodes the credibility of the sanctioning country or institution, an effect that may have been compounded by the decreased credibility of the U.S. military threat after Vietnam. Equally important, the global economy had changed dramatically. Although U.S. goals were relatively more modest and the targets usually smaller and weaker than before, the United States found that it had less leverage.
In the early years after World War II, the U.S. economy was the reservoir for rebuilding war-devastated countries. It was also the major, if not sole, supplier of a variety of goods and services. Well into the 1960s, the U.S. remained the primary source of economic assistance for developing countries. Since then, however, trade and financial patterns have grown far more diversified, new technology has spread more quickly, and the U.S. foreign aid budget has virtually dried up for all but a few countries. Recovery in Europe and the emergence of Japan have created new, competitive economic superpowers, and economic development has reduced the pool of potentially vulnerable targets. These trends are starkly illustrated by the declining average trade linkage between the United States and its taigets (from 24 percent prior to 1973 to only 17 percent since), the lower costs imposed on targets (1.7 percent of gross national product GNP v. 0.9 percent of GNP), and the fading utility of manipulating aid flows.3 For example, the success rate for financial sanctions used alone (these are usually cases involving reductions of aid to developing countries) declined from nearly 80 percent before 1973 to less than 20 percent since then.4
The Soviet invasion of Afghanistan and the election of Ronald Reagan brought an intensification of the Cold War that restored an East/West flavor to sanctions campaigns. This change in emphasis manifested itself in several differences between the sanctions cases in the 1980s and those in the preceding decade. Only about half of the 1980s cases involved modest goals, down from three-quarters in the 1970s. The incidence of companion policies nearly tripled (although from a low level given the predominance of modest goals in the 1970s); and the average cost imposed on the target doubled. Perhaps in recognition of its declining leverage, the United States also tried to harness more international cooperation. Still, the costs imposed remained below pre-1970 levels, the average trade linkage remained low, the average cost borne by the U.S. economy (although still small) increased, and the overall effectiveness of sanctions continued to decline. In addition to a declining relative economic position, the type of goals pursued with sanctions affected the type of sanction chosen in ways that undermined effectiveness. In the antiterrorism and nuclear nonproliferation cases, denial of key hardware was typically as important as inducing a change in policy, and so selective export controls were the tool of choice. Since the goals were relatively modest in the overall scheme of U.S. foreign policy, broader and more costly sanctions would have seemed like overkill, or in conflict with other more important goals. But because alternative suppliers of the sanctioned goods were usually available, even the denial goal proved elusive.
The type of financial sanction used most frequently also changed. Economic aid was the dominant choice in the earlier period. Military assistance was prominent in the later period, especially in the human rights cases, where military governments were often the target. Again, in some cases, alternative sources of arms and financial assistance were available. Even more important, however, these governments perceived internal dissent to be a greater threat to their longevity than U.S. enmity and sanctions.
The inevitable decline of American postwar hegemony has substantially reduced the utility of unilateral U.S. economic sanctions. The end of the Cold War raises two questions for the future of sanctions. Can the utility of unilateral U.S. sanctions be restored? And does the UN embargo of Iraq presage a new approach to international diplomacy, with multilateral sanctions playing an important role?
The collapse of the Soviet Union provides a geopolitical benefit that partially offsets the negative economic trends facing U.S. policymakers in this area. Evidence from the case studies of recent decades reveals that "offsetting assistance," i.e., compensating aid or trade flows provided by a third party to offset the effects of the sanctions on the target country, was an important factor undermining the effectiveness of some sanctions. Cases involving offsetting assistance most often were embroiled in Cold War politics, with one of the superpowers providing assistance to a target of its rival's sanctions. Perhaps the best example of the importance of offsetting assistance to a target country government is Fidel Castro's Cuba. Estimates of the value of the subsidies provided by the Soviet Union to Cuba over the thirty years of the U.S. embargo typically are in the billions of dollars.5 In 1990 Soviet officials estimated that Soviet assistance to Cuba in recent years might have been as much as $2 billion to $3 billion annually.6 The decline in superpower rivalry, combined with severe economic problems at home, means that the now former Soviet Union is far less likely to play "the white knight" to countries seeking assistance to offset the impact of U.S. sanctions. Although Libya and occasionally sympathetic neighbors (South Africa for Rhodesia and Saudi Arabia for Pakistan) have played this role, the resources and commitment of potential new "white knights" are certain to pale beside those of the former Soviet Union at the height of the Cold War.
While the provision of offsetting assistance, if generous enough, can cause a sanctions effort to fail, its absence does not guarantee success. Other factors, especially the difficulty of the goal and the political as well as economic vulnerability of the target, usually will be decisive. Even if "white knights" are fewer in the 1990s, changes in the international economy in recent decades have reduced the number of targets likely to succumb to unilateral economic coercion, even if "white knights" go the way of dragons. Many potential targets have developed strong and diversified economies that will never again be as vulnerable as they once were. And even relatively weak economies are less vulnerable today as a result of the growth in world trade and the rapid dispersion of technology, which means that most U.S. exports can be replaced at little cost and alternatives, even to the large U.S. import market, can usually be found.
Thus, one by-product of the evolution of the world economy since World War II has been a narrowing of the circumstances in which unilateral economic leverage may be effectively applied. A more interdependent global economy means that the effectiveness of unilateral sanctions increasingly depends on the subtlety, skill, and creativity with which they are imposed—a test the United States has frequently failed.
For many, the reaction to Iraq's invasion of Kuwait provided a vision of a post-Cold War world in which the United Nations, without the superpower rivalries that have hamstrung it in the past, would finally play the dispute-settlement role originally intended for it. Unfortunately, the civil war in the former Yugoslav republics vividly illustrates the difficulties in organizing effective multilateral cooperation. The end of the Cold War opened the door for an unprecedented degree of international cooperation against Iraq; but the real source of that near unanimity was the threat to global prosperity and political stability posed by Saddam's aggression. Had the invasion of Kuwait not placed him in a position to control the second largest oil reserves in the world, with one-half of his million-man army poised on the Saudi Arabian border, it is unlikely that the world would have been so united in confronting; Saddam Hussein.
Even though the formal UN sanctions against Serbia are quite similar to those imposed against Iraq, the embargo of Iraq remains unique among sanctions efforts in this century. The sanctions were imposed quickly, comprehensively, and with an unprecedented degree of support. The economic embargo was agreed to by the UN Security Council less than a week after the invasion of Kuwait. Within a month, it approved the use of naval forces to enforce the sanctions. Within two months, the UN had added an air embargo and authorized secondary boycotts of countries violating the resolutions. Finally, Iraq's economy, geographically isolated and skewed toward oil, is far more vulnerable to economic coercion than other targets of sanctions have been. Because 90 percent of its export revenues come from oil, which could be easily monitored and interdicted, smugglers would have had no incentive to evade the sanctions once Saddam had exhausted both his reserves and whatever he was able to plunder from Kuwait.
By contrast, it was two to three weeks after the outbreak of civil war in Croatia before the European Community and United States embargoed arms, and several months more before they suspended aid flows and trade preferences for Serbia. The greater diversity of the Serbian economy also lessened the economic impact relative to that in Iraq, while the geography of the Balkans makes enforcement much more difficult. Because the former Yugoslavia serves as a land route for Turkey to Eastern and Central Europe, and the Danube River an important transportation route for Eastern and Central Europe to open water, a major loophole in the sanctions allowed for continued transshipment of goods, including petroleum products, through Serbia. Finally, in November 1992, more than a year after the crisis erupted and five months after the sanctions had been mandated, the Security Council approved naval interdiction on theAdriatic Sea to enforce the sanctions, called on Serbia's neighbors to crack down on abuse of the transshipment allowance, and approved the placement of UN personnel on the ground in neighboring countries to monitor enforcement.
Although the sanctions against Serbia were never stringently enforced, even the tightest sanctions usually weaken over time, in part because the high costs to the sender countries themselves erode support for the coercive measures. To counter this tendency during the Middle East crisis, the U.S. and its allies went to extraordinary lengths to ameliorate the costs of removing Iraqi and Kuwaiti oil from the market, especially for the hardest hit. Saudi Arabia and other oil exporters capable of doing so boosted oil production to offset losses from Iraqi and Kuwaiti production. In addition, the United States took the lead in organizing an "economic action plan" to recycle the short-term windfall profits gained by the Saudis and other oil producers, and to encourage Japan, Germany, and others to provide grants and low-cost loans to developing countries hurt by higher oil prices, and lost trade and workers' remittances.7 The International Monetary Fund and World Bank also provided concessional loans to developing countries suffering balance-of-payments stresses because of the sudden jump in oil prices. There is no provision in the Serbian case for secondary sanctions and no compensation scheme for countries severely injured by enforcing the sanctions. Perhaps if both had been in place it would have been easier to control abuse of the transshipment allowance on the Danube.
Although modest sanctions may achieve modest goals, collective security goals are typically ambitious, and the key to success in these cases is the commitment of the sanctioning country or group. The comparison of the Iraq and Yugoslav cases supports the general conclusion that, especially when the goal is ambitious, sanctions should be imposed quickly and comprehensively. To maximize the chances for a successful outcome, the leaders of the sanctioning coalition should also try to even out the distribution of the costs, providing assistance to the hardest hit. They must also be prepared to extend sanctions to member countries that fail to enforce the measures agreed.
The degree of commitment achieved during the Middle East crisis was extraordinary. What a lack of commitment produces is tragically evident in Yugoslavia, where the imposition of comprehensive trade and financial sanctions was too little and, more important, too late. While a credible threat of military action underscored the coalition's determination to enforce the sanctions and ultimately to reverse Iraq's invasion of Kuwait, obvious reluctance to use force weakened the credibility of the coalition in enforcing the sanctions against Yugoslavia. Lack of credibility weakens a sanctions effort in two ways. It encourages greater intransigence on the part of the target country because the target believes the sanctioning coalition cannot hold for long; and it contributes to the perception in third countries that there will be no consequence as a result of breaking the sanctions.
The end of the Cold War removed an important obstacle to the use of economic sanctions as a tool of collective security, but it did not erase all the economic and political interests that divide countries. Nor did it make difficult objectives easy, or strong and stable targets more susceptible to economic pressure. And while increased economic interdependence has reduced potential vulnerability to unilateral sanctions in many cases, it is also a double-edged sword for multilateral sanctions. It may increase the power of broad economic sanctions, because countries are more dependent on trade and financial flows. It also means more countries will need to be involved in a sanctions effort to make it effective, and that there may be more countries capable of undermining the effect of a sanctions effort should they choose to do so.
1. The methodology, examples, and conclusions about economic sanctions generally are based on Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott, Economic Sanctions Reconsidered, 2d ed, (Washington, D.C.: Institute for International Economics, 1990).
2. The UN embargo of Iraq is not included in the database because it was still ongoing at the time the book went to press.
3. Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered, pp. 91-113.
4. Ibid.
5. Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Elliott, Economic Sanctions Reconsidered: Supplemental Case Histories, 2d ed. (Washington, D.C.: Institute for International Economics, 1990), pp. 200-201.
6. Ibid.
7. Hufbauer, Schott, Elliott, Economic Sanctions Reconsidered, pp. 288-9.