June 01, 2023
The Unintended Consequences of Economic Sanctions
Economic sanctions are being used more and more often but also face more questions of effectiveness, especially as they are used on larger and larger targets. The recent anniversary of the 2022 Russian invasion of Ukraine prompted considerable analysis of the effectiveness of economic sanctions. In the Russia case, sanctions are clearly having an economic impact, reducing Russia’s economic and policy choices, resulting in a smaller but more centralized economy that is increasingly reliant on a smaller number of trading partners. However, there are no signs that the war is coming to an end. The Russian sanctions highlight two linked trends—the economic impacts of sanctions may build over time, impairing future investment and growth, while at the same time workarounds develop, creating resiliency. To maintain similar levels of pressure, new sanctions are required, often creating a whack-a-mole situation.
Since 2022, the risks of splintering among developed economies seem to have receded, at least temporarily and with respect to Russia.
While sanctions clearly bring economic stress and political impacts, including potential consolidations of power within the target governments, there is less evidence about their ability to bring behavioral change, as even policymakers like Janet Yellen seem recently to have pondered. Policymakers in the U.S. have begun to shift away from a prior assessment that sanctions are meant to prompt policy change, and more applications seem designed to degrade and limit the access of malign actors to the global economy. Russia is a case in point.
Read the full article from Lawfare.
More from CNAS
-
BONUS: Comparing China Sanctions Under Trump and Biden
Join Emily Kilcrease and researcher Eleanor Hume to discuss the latest edition of CNAS's Sanctions by the Numbers series, examining how the U.S.'s sanctions policy on China ha...
By Emily Kilcrease & Eleanor Hume
-
Sanctions by the Numbers: Comparing the Trump and Biden Administrations’ Sanctions and Export Controls on China
Executive Summary The Biden administration has exceeded the Trump administration in the number of financial sanctions and entity-based export controls placed on Chinese person...
By Eleanor Hume & Rowan Scarpino
-
A Fight Among China Hawks Could Imperil U.S. AI Dominance
Rolling the dice now on partnerships like the G42 deal could be critical to ensuring U.S. dominance....
By Daniel Silverberg & Elena McGovern
-
U.S. Chip Controls and the Future of AI Compute
That escalated quickly! Emily and Geoff discuss why the U.S. aim to deny China access to the computing power necessary for frontier AI capabilities has led to an ever expandin...
By Emily Kilcrease, Geoffrey Gertz & Pablo Chavez