Economic sanctions are commercial and financial penalties applied by states or institutions against states, groups, or individuals. Economic sanctions are a form of coercion that attempts to get an actor to change its behavior through disruption in economic exchange. Sanctions can be intended to compel (an attempt to change an actor's behavior) or deterrence (an attempt to stop an actor from certain actions).
Sanctions can target an entire country or they can be more narrowly targeted at individuals or groups; this latter form of sanctions are sometimes called "smart sanctions". Prominent forms of economic sanctions include trade barriers, asset freezes, travel bans, arms embargoes, and restrictions on financial transactions.
The efficacy of sanctions in achieving intended goals is the subject of debate. The humanitarian impact of country-wide sanctions have been a subject of controversy. As a consequence, since the mid-1990s, United Nations Security Council (UNSC) sanctions have tended to target individuals and entities, in contrast to the country-wide sanctions of earlier decades.
History of sanctions
One of the most comprehensive attempts at an embargo occurred during the Napoleonic Wars of 1803–1815. Aiming to cripple the United Kingdom economically, Emperor Napoleon I of France in 1806 promulgated the Continental System—which forbade European nations from trading with the UK. In practice the French Empire could not completely enforce the embargo, which proved as harmful (if not more so) to the continental nations involved as to the British.
World War I and the Interwar period
Sanctions in the form of blockades were prominent during World War I. Debates about implementing sanctions through international organizations, such as the League of Nations, became prominent after the end of World War I. Leaders saw sanctions as a viable alternative to war.
The League Covenant permitted the use of sanctions in five cases:
When Article 10 of the League Covenant is violated
In case of war or threat of war (Article 11) When a League member does not pay an arbitration award (Article 12) When a League member goes to war without submitting the dispute to the League Council or League Assembly (Articles 12–15) When a non-member goes to war against a League member (Article 17)
The Abyssinia Crisis in 1935 resulted in League sanctions against Mussolini's Italy under Article 16 of the Covenant. Oil supplies, however, were not stopped, nor the Suez Canal closed to Italy, and the conquest proceeded. The sanctions were lifted in 1936 and Italy left the League in 1937.
In the lead-up to the Japanese attack on Pearl Harbor in 1941, the United States imposed severe trade restrictions on Japan to discourage further Japanese conquests in East Asia.
From World War II onwards
After World War II, the League was replaced by the more expansive United Nations (UN) in 1945. Throughout the Cold War, the use of sanctions increased gradually. After the end of the Cold War, there was a major increase in economic sanctions.
According to the Global Sanctions Data Base, there have been 1,325 sanctions in the period 1950–2022.
Politics of sanctions
Economic sanctions are used as a tool of foreign policy by many governments. Economic sanctions are usually imposed by a larger country upon a smaller country for one of two reasons: either the latter is a perceived threat to the security of the former nation or that country treats its citizens unfairly. They can be used as a coercive measure for achieving particular policy goals related to trade or for humanitarian violations. Economic sanctions are used as an alternative weapon instead of going to war to achieve desired outcomes.
The Global Sanctions Data Base categorizes nine objectives of sanctions: "changing policy, destabilizing regimes, resolving territorial conflicts, fighting terrorism, preventing war, ending war, restoring and promoting human rights, restoring and promoting democracy, and other objectives."
Effectiveness of economic sanctions
According to a study by Neuenkirch and Neumeier, UN economic sanctions had a statistically significant impact on targeted states by reducing their GDP growth by an average of 2.3–3.5% per year—and more than 5% per year in the case of comprehensive UN embargoes—with the negative effects typically persisting for a period of ten years. By contrast, unilateral US sanctions had a considerably smaller impact on GDP growth, restricting it by 0.5–0.9% per year, with an average duration of seven years.