Financial sanctions and foreign policy¶

Literature › Works

Gary Hufbauer; Kimberly Elliott (1988). Financial sanctions and foreign policy. Investment Analysts Journal (Winter 1988). Investment Analysts Society of Southern Africa.


Type	journal article
Scope	Comparative and methods
Method	descriptive quantitative
Period studied	1914–1988
Regions	United States, Global (cross-national sanctions cases)
Themes	sanctions divestment, comparative theory
Citation key	`hufbauer1988`

Argument¶

Drawing on 103 economic sanctions cases from World War I to 1985, the authors argue that financial sanctions, mostly cuts in aid by rich senders to small, weak targets, have worked more often than trade sanctions. They score each case on policy outcome and on the contribution of sanctions, and count a score of 9 or more as a success. They find, however, that effectiveness collapsed after about 1973. They give three reasons: the relative decline of US economic dominance, a shift in goals toward human rights, and a shift from economic to military aid as the lever. They conclude that the 'glory days' will not return, and a postscript on Panama in 1988 illustrates the limits. The article contains no discussion of South Africa.

Evidence and method¶

The authors' own dataset of 103 sanctions case studies (1914-1985) from their Economic Sanctions Reconsidered project, each given a 1-16 success score; a table of 26 financial-sanctions cases; a postscript case on Panama, 1987-88. The text does not give the underlying case sources.

Findings¶

Financial sanctions, alone or with trade measures, featured in most of the 103 cases. (p. 1)

with trade controls in 74 of our 103 cases.
Financial sanctions' success rate fell sharply after 1973, to 15 percent in the later period. (p. 2)

to only 15 percent since then (with the number of cases
First reason for the decline: the relative decline of US economic dominance, since the US was no longer the sole source of aid. (p. 2)

The first is the relative decline of the US position in the world