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The Sanctions Paradox: Economic Statecraft and International Relations (Cambridge Studies in International Relations, Series Number 65)
The conventional wisdom is that economic sanctions do not work in international affairs. If so, why do countries wield them so often? Daniel Drezner argues that, paradoxically, countries will be most eager to use sanctions under conditions where they will produce the feeblest results. States anticipate frequent conflicts with adversaries, and are therefore more willing to use sanctions. However, precisely because they anticipate more conflicts, sanctioned states will not concede, despite the cost. Economic sanctions are thus far less likely to be effective between adversaries than between allies.
364 pages, Paperback
First published August 26, 1999
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December 5, 2008
Daniel Drezner attempts to shed light on this problem by building a game theoretic model that includes both carrots and sticks as potential options of economic coercion. His goal is to provide this missing overarching framework to the debate – namely when one should apply carrots, sticks, or both to allies and adversaries. His Conflict Expectations Model has two primary assumptions – states are rational actors and states that anticipate future conflicts will be more concerned with reputational and distributional effects (Drezner, p.27). Applying the model, Drezner reaches the conclusion that coercers are more willing to use inducements with allies than adversaries, both carrots and sticks are more likely to work against an ally than an adversary, and that, using both, it is very difficult to successfully coerce an adversary (Drezner, p.28).
At first cut, this conclusion appears to form a coherent picture of under what circumstances and against whom carrots and sticks will be successful. However, closer examination reveals that Drezner’s model has serious limitations that, though not disproving his conclusions, certainly undermine them. The first problem in the model relates to his second assumption concerning future reputational effects. Drezner argues that states do care about reputation when it concerns potential future conflict with adversaries. As he says, ‘Leaders must be concerned that backing down in the present will raise the other state’s expectation of success in later episodes. A state will care about the distribution of payoffs in the present because this will alter its perceived reputation in other states,’ (Drezner, p.32). To fortify this assumption, Drezner remarks on the literature on reputation, specifically work by Jonathan Mercer, saying, ‘Whatever the merits of this argument, it does not affect the theory presented here. A conflict expectations approach argues that reputational concerns are particularly salient because the expected conflicts involve the same actors, as opposed to a diffuse reputational effect for all international interactions,’ (Drezner, p.33). Drezner is correct when he states that this avoids Mercer’s argument but follow-on work based on Mercer’s ideas contradict this notion that reputation matters for states repeatedly engaging each other. In a recent book, Daryl Press argues that even in circumstances where a state repeatedly engages another state in bargaining and conflict situations, reputation does not develop. Though Drezner’s book was written before Press’, if reputation formed in a conflict or crisis does not matter for future conflicts between the same two states, then the validity of the second assumption is shaken considerably.
The remaining leg upon which the assumption stands, that states care about distributional elements in bargaining for future conflict, also does not appear as strong as Drezner argues. His key defense of this part of the assumption is that states with unequal power care just as much about material transfers as states with equal power (Drezner, p.30). Claiming both that some concessions are very expensive and that power is not fungible in the short term, he argues that even great powers will care about these distributional effects. However both of these claims are problematic. The first, that some concessions, such as information on North Korea’s nuclear program, are expensive is undoubtedly true. However that does not mean that a great power like the United States cares as much about the good as a state equal in power to North Korea. This contention stems from the fact that even if the United States did not receive the transfer, it could still act in a way that allows it to achieve its objectives. For example, the United States might not get the information on the nuclear program through sanctions, but because it’s a great power and its end goal is the termination of that nuclear program, it could always resort to other means, such as attacking the North, that could allow it to achieve its goal. In contrast, an equal power does not have that same option because they may not be able to win in an invasion scenario. Thus, the United States can care less about whether, given the end goal of nuclear disarmament, North Korea acquiesces and transfers the information. If material interests are not equally distributed, then in sanctioning situations between unequal powers, which is often the case in international politics, Drezner cannot assume that distributional effects matter in the present or the future for at least one of the states.
Drezner’s second claim, that power is not fungible in the short run and therefore distributional effects are important, seems counterintuitive to his model. Remember that the model is about expectations of future conflict – though there is no timeframe on when future conflict might occur, it could easily be in the distant future and thus the powerful state can transform its power into an applicable form that could be used against the target. This being the case, Drezner’s argument that power is not necessarily fungible in the short term falls apart because we are not necessarily dealing with the short term. If Drezner’s argument about the distributional effects is not strong enough to support the second assumption and the argument about reputational effects is not well founded, it appears that this key assumption does not hold. If it does not hold, the entire basis for future expectations in his conflict model falls apart. If the model falls apart, then it’s not possible to trust the conclusions he reaches.
A variety of other problems exist with Drezner’s model that undercut his conclusions. First, the model relies on a two-player game. However, economic statecraft is never only a two-player game. For example, even when unilateral sanctions are put into place, such as when the United States embargoed Iran, many more actors play a role. In the early 1980s, Iran had to substitute particular goods that it had received from the U.S. Part of the Iranian decision not to acquiesce to U.S. demands relied on their expectations that third party actors would not also cut off their supply of goods. Thus, the expectations of what these actors would do played a significant role in the Iranian decision, yet this dynamic is not captured by Drezner’s model.
Second, the model’s structure, a simplified, turn-based game, is not representative of how bargaining with carrots and sticks operates in international relations. For example, Drezner posits a step-by-step process whereby one state initially makes a carrot offer. If that offer is rejected, then the coercer state makes a demand and the other state decides whether to acquiesce. The states then go through a process of demand making and response. The problem with this model is that carrots are never reintroduced. Such a dynamic is not reflective of reality. For example, in the current progressive sanctions on Iran, carrots were offered to the Iranians for giving up their nuclear program. When those carrots did not work, sanctions were imposed. However, the carrots offer did not magically disappear – there is reason to believe that if the Iranians were now willing to give up their program as a response to the sanctions, at least some of the carrots would still be on the table. Drezner’s model does not allow for this dynamic and therefore does not accurately portray the costs and benefits of each step in the negotiating process. If the values he portrays are not correct, then states might act in a different manner from his conclusions.
Finally, though Drezner’s model is laudable for its attempts to bring together both carrots and sticks into one framework, he seems to suffer from the same problem as Pape – disaggregating economic sanctions from force. His model includes costs of both acquiescing to the demand and of the sanction itself. However, in calculating the cost function of the sanction, Drezner leaves out the cost of the potential use of force. As discussed previously in this paper, force or the threat thereof almost always accompanies the sanction and so not including it into the cost function neglects a key part of the target’s decision calculus. Such a cost could be calculated by multiplying the potential costs of a military strike by the probability of such strike if the target does not acquiesce to the coercer’s demands. By not including this calculation, Drezner underestimates the costs to states of standing firm and predicts that successful coercion is harder than it might actually be.
I've got a significant critique of his empirical section as well, but Goodreads won't allocate me the space for it here.
At first cut, this conclusion appears to form a coherent picture of under what circumstances and against whom carrots and sticks will be successful. However, closer examination reveals that Drezner’s model has serious limitations that, though not disproving his conclusions, certainly undermine them. The first problem in the model relates to his second assumption concerning future reputational effects. Drezner argues that states do care about reputation when it concerns potential future conflict with adversaries. As he says, ‘Leaders must be concerned that backing down in the present will raise the other state’s expectation of success in later episodes. A state will care about the distribution of payoffs in the present because this will alter its perceived reputation in other states,’ (Drezner, p.32). To fortify this assumption, Drezner remarks on the literature on reputation, specifically work by Jonathan Mercer, saying, ‘Whatever the merits of this argument, it does not affect the theory presented here. A conflict expectations approach argues that reputational concerns are particularly salient because the expected conflicts involve the same actors, as opposed to a diffuse reputational effect for all international interactions,’ (Drezner, p.33). Drezner is correct when he states that this avoids Mercer’s argument but follow-on work based on Mercer’s ideas contradict this notion that reputation matters for states repeatedly engaging each other. In a recent book, Daryl Press argues that even in circumstances where a state repeatedly engages another state in bargaining and conflict situations, reputation does not develop. Though Drezner’s book was written before Press’, if reputation formed in a conflict or crisis does not matter for future conflicts between the same two states, then the validity of the second assumption is shaken considerably.
The remaining leg upon which the assumption stands, that states care about distributional elements in bargaining for future conflict, also does not appear as strong as Drezner argues. His key defense of this part of the assumption is that states with unequal power care just as much about material transfers as states with equal power (Drezner, p.30). Claiming both that some concessions are very expensive and that power is not fungible in the short term, he argues that even great powers will care about these distributional effects. However both of these claims are problematic. The first, that some concessions, such as information on North Korea’s nuclear program, are expensive is undoubtedly true. However that does not mean that a great power like the United States cares as much about the good as a state equal in power to North Korea. This contention stems from the fact that even if the United States did not receive the transfer, it could still act in a way that allows it to achieve its objectives. For example, the United States might not get the information on the nuclear program through sanctions, but because it’s a great power and its end goal is the termination of that nuclear program, it could always resort to other means, such as attacking the North, that could allow it to achieve its goal. In contrast, an equal power does not have that same option because they may not be able to win in an invasion scenario. Thus, the United States can care less about whether, given the end goal of nuclear disarmament, North Korea acquiesces and transfers the information. If material interests are not equally distributed, then in sanctioning situations between unequal powers, which is often the case in international politics, Drezner cannot assume that distributional effects matter in the present or the future for at least one of the states.
Drezner’s second claim, that power is not fungible in the short run and therefore distributional effects are important, seems counterintuitive to his model. Remember that the model is about expectations of future conflict – though there is no timeframe on when future conflict might occur, it could easily be in the distant future and thus the powerful state can transform its power into an applicable form that could be used against the target. This being the case, Drezner’s argument that power is not necessarily fungible in the short term falls apart because we are not necessarily dealing with the short term. If Drezner’s argument about the distributional effects is not strong enough to support the second assumption and the argument about reputational effects is not well founded, it appears that this key assumption does not hold. If it does not hold, the entire basis for future expectations in his conflict model falls apart. If the model falls apart, then it’s not possible to trust the conclusions he reaches.
A variety of other problems exist with Drezner’s model that undercut his conclusions. First, the model relies on a two-player game. However, economic statecraft is never only a two-player game. For example, even when unilateral sanctions are put into place, such as when the United States embargoed Iran, many more actors play a role. In the early 1980s, Iran had to substitute particular goods that it had received from the U.S. Part of the Iranian decision not to acquiesce to U.S. demands relied on their expectations that third party actors would not also cut off their supply of goods. Thus, the expectations of what these actors would do played a significant role in the Iranian decision, yet this dynamic is not captured by Drezner’s model.
Second, the model’s structure, a simplified, turn-based game, is not representative of how bargaining with carrots and sticks operates in international relations. For example, Drezner posits a step-by-step process whereby one state initially makes a carrot offer. If that offer is rejected, then the coercer state makes a demand and the other state decides whether to acquiesce. The states then go through a process of demand making and response. The problem with this model is that carrots are never reintroduced. Such a dynamic is not reflective of reality. For example, in the current progressive sanctions on Iran, carrots were offered to the Iranians for giving up their nuclear program. When those carrots did not work, sanctions were imposed. However, the carrots offer did not magically disappear – there is reason to believe that if the Iranians were now willing to give up their program as a response to the sanctions, at least some of the carrots would still be on the table. Drezner’s model does not allow for this dynamic and therefore does not accurately portray the costs and benefits of each step in the negotiating process. If the values he portrays are not correct, then states might act in a different manner from his conclusions.
Finally, though Drezner’s model is laudable for its attempts to bring together both carrots and sticks into one framework, he seems to suffer from the same problem as Pape – disaggregating economic sanctions from force. His model includes costs of both acquiescing to the demand and of the sanction itself. However, in calculating the cost function of the sanction, Drezner leaves out the cost of the potential use of force. As discussed previously in this paper, force or the threat thereof almost always accompanies the sanction and so not including it into the cost function neglects a key part of the target’s decision calculus. Such a cost could be calculated by multiplying the potential costs of a military strike by the probability of such strike if the target does not acquiesce to the coercer’s demands. By not including this calculation, Drezner underestimates the costs to states of standing firm and predicts that successful coercion is harder than it might actually be.
I've got a significant critique of his empirical section as well, but Goodreads won't allocate me the space for it here.
April 3, 2026
Sanctions are symbols; is their effectiveness truly of secondary concern?
Daniel W. Drezner’s "The Sanctions Paradox" is a masterful rebuttal to the idea that economic pressure is merely a "show" for domestic audiences. While many dismiss sanctions as ineffective, Drezner provides a sharp, logical framework proving they are actually a potent tool when applied to the right targets.
If you want to understand how economic power actually translates into political influence, start here!
Daniel W. Drezner’s "The Sanctions Paradox" is a masterful rebuttal to the idea that economic pressure is merely a "show" for domestic audiences. While many dismiss sanctions as ineffective, Drezner provides a sharp, logical framework proving they are actually a potent tool when applied to the right targets.
If you want to understand how economic power actually translates into political influence, start here!
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