Alternatives to Comprehensive Sanctions

Literature › Works

William H. Kaempfer; Anton D. Lowenberg (2000). Alternatives to Comprehensive Sanctions. Discussion Papers in Economics, Working Paper No. 00-17, Center for Economic Analysis, Department of Economics, University of Colorado at Boulder. University of Colorado at Boulder.

Type	working paper
Scope	Comparative and methods
Method	theoretical or conceptual
Period studied	1914–1999
Regions	South Africa, Rhodesia, Iraq, Soviet Union, United States, Cross-national
Themes	sanctions divestment, comparative theory, macro fiscal finance debt, business and state
Citation key	kaempfer2000

Argument

The authors argue that the effectiveness of sanctions depends on the sender's objective (moral signalling, punishment, or policy change) and on how the sanctions are supposed to work. Drawing on their public choice models, they claim the link between economic damage and political change is tenuous. Sanctions work better by weakening supporters of the objectionable policy, or their capacity to pursue it, while strengthening domestic opponents. They therefore favour targeted, symbolic, financial or market-driven measures over comprehensive multilateral sanctions, which they say concentrate sanctions rents in the target and remove foreign firms as a channel of influence. South Africa is a recurring illustration, and they say its transition owed more to self-inflicted domestic costs than to sanctions.

Evidence and method

A conceptual, public-choice argument supported by illustrative cases (South Africa, Rhodesia, Iraq, the Soviet grain embargo, Haiti, Serbia, India/Pakistan) and by secondary empirical literature, chiefly Hufbauer et al. (1990) and Bonetti (1997), plus the authors' earlier work. A cigarette expenditure comparison for South Africa is cited from Berg (1998). No new primary data.

Findings

• Policy makers rarely specify the sanction's objective or how it will work, which undermines assessment. (p. 4)

  there almost never is a clear understanding of the objective of the sanction or of how implementation of the sanction will attain success.

• Economic damage does not clearly produce political change, since the costliest cases often involved military intervention. (p. 8)

  it is not at all clear that it is the damage that links the sanction to the political success of the episode.

• The 1986 US and European anti-apartheid measures were shaped by protectionist and energy-dependence interests. (p. 13)

  the 1986 U.S. legislation, the Comprehensive Anti-Apartheid Act, targeted imports of South African steel, textiles and agricultural products to the advantage of import-competing U.S. industries

• European sanctions exempted South African coal because of energy dependence. (p. 13)

  the equivalent legislation in Europe exempted South African coal on which European countries were quite highly dependent for their energy requirements.

• Multilateral cooperation does not statistically improve sanctions success. (p. 13)

  Rigorous analysis of these data reveals that there is no statistically significant relationship between multilateral cooperation and the success of sanctions (Bonetti, 1997, p. 332).

• Comprehensive multilateral sanctions concentrate sanctions rents in the target, whereas unilateral sanctions disperse them. (p. 15)

  comprehensive multilateral sanctions in fact have the perverse effect of concentrating sanctions rents within the target country, insuring that residents of the target are the prime beneficiaries of the sanctions

• The refusal of private banks to reschedule debt was probably the most effective economic pressure on Pretoria, though a market response rather than a sanctions policy. (p. 17)

  the most effective economic sanction against South Africa in terms of bringing about substantive reform was the private banking community's refusal to reschedule the country's debt

• The 1985 financial crisis put the state's financial footing at risk and made it willing to reform. (p. 17)

  The problem for the South African government during the financial crisis of 1985 was that its very financial footing was at risk if short-term debt could not be rolled over.

• Foreign firms in apartheid South Africa supported black workers via the Sullivan Principles. (p. 19)

  in apartheid-era South Africa foreign firms were among the strongest supporters of black workers. They paid higher wages and promoted black employees actively

• Sanctions were not the main cause of South Africa's transition; self-inflicted domestic costs mattered more. (p. 26)

  there is considerable evidence that sanctions were not the main, or even a major, cause of South Africa's democratic transition.

• Sanctions could be aimed at group consumption differences, e.g. cigarettes in South Africa. (p. 12)

  in South Africa the share of income spent on cigarettes is three times greater for whites than for blacks.