Busted Sanctions: Explaining Why Economic Sanctions Fail

by Bryan Early

Powerful countries like the United States regularly employ economic sanctions as a tool for promoting their foreign policy interests. Yet this foreign policy tool has an uninspiring track record of success, with economic sanctions achieving their goals less than a third of the time they are imposed. The costs of these failed sanctions policies can be significant for the states that impose them, their targets, and the other countries they affect. Explaining economic sanctions' high failure rate therefore constitutes a vital endeavor for academics and policy-makers alike. Busted Sanctions seeks to provide this explanation, and reveals that the primary cause of this failure is third-party spoilers, or sanctions busters, who undercut sanctioning efforts by providing their targets with extensive foreign aid or sanctions-busting trade. In quantitatively and qualitatively analyzing over 60 years of U.S. economic sanctions, Bryan Early reveals that both types of third-party sanctions busters have played a major role in undermining U.S. economic sanctions. Surprisingly, his analysis also reveals that the United States' closest allies are often its sanctions' worst enemies. The book offers the first comprehensive explanation for why different types of sanctions busting occur and reveals the devastating effects it has on economic sanctions' chances of success.

Genres: Economics

288 pages, Paperback

First published February 11, 2015

Reviews

[Frank Stein · Rating 3 out of 5]

This book unfortunately shares with many other political science books a tendency towards over-explanation. The "hypotheses" are laid out in excessive detail, including obvious hypotheses about how nations closer to sanctioned ones tend to trade more. But this book still offers many important lessons about why third-party nations either trade with or aid sanctioned countries.

As the author shows, the biggest "sanctions busters" in terms of increased trade with nations sanctioned by the U.S. are actually close allies like Germany and Japan. The size of their economies means the U.S. has a harder time enforcing its rules extraterritorially on them relative to small nations (as was shown in the Western European pushback to Cuba sanctions in the 1970s and the 1990s) and their alliance with the U.S. actually means other strategic issues will take precedence in the relationship over sanctions busting against small nations. It also shows that nations like the UAE are able to circumvent sanctions with nations like Iran due to long-standing ties (about a fourth of Dubai's population is Persian, which dates to the sheikh of Dubai inviting Persian pearl-divers to the country in the early 20th century, and the existing dhows shipping network there encouraged sanctions busting after 1979). It also shows that aid-based, as opposed to trade-based, sanctions policy is important, in that Cuba was able to survived thanks to tens of billions of dollars of aid, in terms of reduced prices on imports and above-market export prices, from the Soviet Union, and when that stopped both China and then, post-1998, Venezuela stepped up to bolster the regime despite the economic costs. This aid explains much of why sanctions "failed" against the Castro regime.

Despite some tediousness then, this book offers some important lessons on one of the most important issues in sanctions policy, whether and how sanctioned nations can get goods and finance from elsewhere.