Economic sanctions

Economic sanctions have become an international relations tool of choice in the post-Cold War era. (Kaempfer, 2000) The number of nations that have become targets of this foreign policy instrument has been growing, as has been the list of those organizations applying the sanctions. (Kaempfer, 2000) Neither is the list of sanctions targets necessarily limited to transgressor nations, but their trade partners are sometime brought under rebuke through the use of secondary sanctions.

(Kaempfer, 2000) This rush to sanction has generated a great deal of criticism in both academic circles and among the multinational firms that are typically the bearers of a large part of the implicit taxation that sanctions represent. (Kaempfer, 2000) It is a reasonable generalization to characterize international economic sanctions as overused, ineffective, and unfair. (Kaempfer, 2000) Sanctions are overused as demonstrated by the unwieldy number of sanctions episodes currently in force.

(Kaempfer, 2000) They are ineffective given the number of seeming failures in sanctions policy. (Kaempfer, 2000) They are unfair not only because of the burden they place on firms and other organizations who would normally expect to freely engage in international commerce, but because of the heavy suffering that they can impose on innocents in target countries. (Kaempfer, 2000) Nevertheless, this characterization of sanctions is a generalization.

In order to more fully understand what should be used and what should not, what is effective and what is not, and what is fair and what is not, a better understanding of what sanctions do is necessary. (Kaempfer, 2000) The most important issue to be resolved before one can make a blanket assessment of the success (or use, or fairness) of sanctions in general, or even of specific types of sanctions, is just what was expected of the sanction.

(Kaempfer, 2000) The critical failure of both the current sanctions policymaking arena, and of assessment of the policies undertaken, is that there almost never is a clear understanding of the objective of the sanction or of how implementation of the sanction will attain success. (Kaempfer, 2000) International economic sanctions are governmental policies, and as such they can be analyzed according to the general principles set forth in public choice economics.

(Kaempfer, 2000) Behind the enactment of any endogenous policy will be a set of interests pressuring for the policy against some resistance to the policy that must be overcome for successful implementation In the case of sanctions, the pressures in favor of the sanctions could come either from interest groups with foreign policy objectives or from interests with more pecuniary objectives. (Kaempfer, 2000). Some examples of this are U. S. sugar producers anxious to keep Cuban sugar off the U. S. market or energy consumers hoping to avoid market disruption from an Iraqi invasion of Kuwait.

(Kaempfer, 2000) Political resistance to sanctions is likely to be based on pecuniary self interest as well. Firms doing business in the intended target well understand that they will bear the brunt of the cost of the sanctions if their business undertakings are interrupted or terminated. (Kaempfer, 2000) Consequently, they will contest the imposition of international economic sanctions that damage their interests regardless of their own ethical position toward the target’s objectionable behavior. (Kaempfer, 2000)

Of more immediate concern are foreign policy interests behind sanctions. (Kaempfer, 2000) The foreign policy interests pressuring for economic sanctions do not always have the same types of objectives given the nature of the target’s offense and the kinds of resistance to the sanctions. (Kaempfer, 2000) Objectives range from taking the moral high ground in response to the target’s offense, to punishing the target for its offense, to attempting to pressure the target to change its offensive action.

(Kaempfer, 2000) Across these objectives, however, the type of sanctions that are appropriate might vary quite a bit in scope and range. (Kaempfer, 2000) Sanctions that take the moral high ground are those sanctions that are designed more to please interests (particularly of the non-pecuniary type) in the sender than to have any impact in the target. (Kaempfer, 2000) The sender adopts a position that, instead of sitting by and acquiescing to the objectionable policy of the target, it would rather take a stand, even if only at very low domestic cost.

(Kaempfer, 2000) An example would be Canada’s banning of landing rights, during the apartheid era, for South African Airways whose flights had never landed in Canada prior to the sanction. (Kaempfer, 2000) While such sanctions typically come at very low cost to the sender as well as to the target, occasionally sanctions designed to take the moral high ground are quite costly to the sender (but not to the target), as in the case of President Carter’s grain export embargo on the Soviet Union.

(Kaempfer, 2000) This sanction imposed huge costs on grain farmers and exporting firms in the U. S. and perhaps politically on Carter himself, while the Soviet Union had plenty of leeway to minimize the damage incurred by seeking out substitute sources of grain. (Kaempfer, 2000) Sanctions are also designed to punish the target country. These punitive sanctions which are typically comprehensive and frequently multilateral in nature are expected to extract a high toll in economic damage to the target by cutting it off from international markets.

(Kaempfer, 2000) Sanctions of this type are frequently in response to a specific act on the part of the target that has already transpired, for instance, Iraq’s invasion of Kuwait or nuclear testing in India and Pakistan. (Kaempfer, 2000) The very nature of the punishment intended by punitive sanctions may interfere with possible policy modification in the target because punitive sanctions tend to cut off other channels of dialog between sender and target.

(Kaempfer, 2000) In addition, punitive sanctions may play into the hands of “hardliners” in the target in a way that less comprehensive sanctions may not. Such an effect would tend to entrench the target’s objectionable policy, not move the target toward compromise. (Kaempfer, 2000) Of course, comprehensive economic sanctions also frequently lead to massive human costs in the target, an outcome that may push the sender a bit off the moral high ground as well.

(Kaempfer, 2000) Finally, sanctions may be aimed at policy modification in the target. If policy modification is, in fact, the primary interest of those pressuring for action in the sanctioning countries, then the exact sanctions policy implemented should be evaluated on grounds of how the sanctions are likely to bring about modification, relative to the costs of implementing the sanctions and the availability and costs of other options toward the end of policy modification in the target.

(Kaempfer, 2000) It is not at all clear that maximum economic dislocation in the target of the type that might follow comprehensive and multilateral sanctions is either likely to bring about the desired policy modification, or is justifiable in light of the domestic and humanitarian costs of such sanctions. (Kaempfer, 2000) . Typically studiers of economic sanctions have divided them into two categories. Sanctions imposed by a single nation upon another are known as unilateral sanctions. If they are imposed by more than one nation, they are known as multilateral sanctions.

(Askari, 31). Multiple studies have indicated that unilateral sanctions imposed by the United States have not been historically effective. (Askari, 34) No country alone, even the United States has sufficient economic power over any other nation to effect policy through economic sanction (Askari, 35) The use of multilateral sanctions by the United Nations has been limited historically. In fact, the UN, since the end of World War Two, has imposed full mandatory sanctions upon only two nations. Since 1990, the United Nations Security Council has imposed sanctions six times.

(Cortright & Lopez, 3) The nature of sanctions has changed since the early 1990s. Sanctions since 1990 have almost always been multilateral and conducted under the auspices of the United Nations. (Cortright & Lopez, 5) There are various reasons for the increased use of multilateral sanctions in the time since the 1990s. (Cortright & Lopez, 6) First, the end of the Cold War has opened up new opportunities for multi-national pacts that include most or all of the major economic powers of the world.

(Cortright & Lopez, 7) Second, the changing nature of the world economy has made multilateral sanctions potentially more effective than earlier attempts. (Cortright & Lopez, 8) Finally, in many countries, sanctions are considered by the populations to be an ethical intermediate step before military actions. (Cortright & Lopez, 9) Despite the advantages of economic sanctions, their main shortcoming seems to be in the area of effectiveness. As the pattern of sanction use against the nation of Iran has demonstrated the ineffectiveness of sanctions as a deterrent.

In 2006, it came to the attention of the United Nations that Iran was engaged in a program to enrich uranium, a step that is integral to the process of producing nuclear weapons. Since the United Nations has been dedicated to the non-proliferation of nuclear weapons, the security counsel demanded that Iran discontinue the enrichment program. In that year, the United Nations passed resolution number 1696, demanding that Iran suspend their program of uranium enrichment. (Res.

1696). The resolution indicated that in order to avoid sanctions, Iran must cease their enrichment program by August of 2006 and submit to inspections, or face sanctions. (Res. 1696) In December of the same year, the UN, having received reports that Iran had not acted to stop it nuclear enrichment program, imposed economic sanctions upon the country. (Res. 1737) At this time, the target of the sanctions was specific to materials related to the enrichment of uranium. (Res.

1737) member nations were required by this resolution not to sell or trade any information, materials, or training related to the enrichment of uranium. (Res. 1737) After nearly a year of continued non-compliance by Iran, the United Nations issued another resolution calling for Iran to suspend its enrichment program. (Res. 1747) In this statement, the United Nations did little more than reiterate the conditions and demands made in the earlier resolutions, noting that existing sanctions would persist until Iran complied with the terms of the original resolution.

(Res. 1747) Iran, as it had done since the issuance of the original resolution, had proceeded as if nothing at all was done. A year later, in March of 2008, the United Nations issued a third resolution. This one came from the Security Counsel. The United Nations Security Counsel issued resolution 1803. This resolution stated that Iran had not been in compliance with the terms of earlier resolutions. (Res. 1803) It demanded that Iran allows inspectors to monitor its nuclear plants for compliance with earlier resolutions’ demands. (Res. 1803)

This pattern of resolutions and non-responses by the Iranian government is indicative of the efficacy of economic sanctions that are aimed specifically at materials related to nuclear proliferation. The only vote in the UN Security Counsel that did not approve the latest resolution was Indonesia. Even that country did not vote against the resolution, only abstained over a quibble with the language. While the UN Security Counsel’s resolution has paved the way for possible military action against Iran, there is little indication from the international community that such action is forthcoming.

As a result, it would appear that sanctions have served the purpose of proving to the international community that the United Nations is helpless to dictate the actions of any nation, regardless of whether or not the nation is complying with treaties, such as the Nuclear Non-Proliferation Treaty. The chain of events involving multilateral sanctions against Iran has been echoed in the case of North Korea. The basis for the United Nation’s activities against Iran was Iran’s alleged repudiation of the Non-Proliferation Treaty (NPT) it signed, along with 186 other nations going back to the 1970s.

(Choe, 38) In contrast, North Korea withdrew from the treaty, making the basis for U. N. actions a little different. (Choe, 39) Even if North Korea were to be held under the terms of the NPT, the treaty itself has no enforcement provisions. (Choe, 40) When enforced upon Iran, the terms of the treaty did nothing to deter Iran’s consistent program of uranium enrichment and plutonium production. (Chloe, 40) In the case of North Korea, the treaty and UN sanctions were even less effective in deterring the development of nuclear technology. The United States was active in getting North Korea to rejoin the NPT in 2002.

(Choe, 42) However, reports continued to come in about North Koreas production of weapons grade uranium, and in early 2003, North Korea withdrew from the NPT for a second time. (Choe, 42) After that point, China, Russia, the United States, Japan and Russia engaged in separate talks with North Korea, which failed as well. The net result of the threat of sanctions in both cases was effectively zero. There are many reasons that sanctions have historically failed to produce results in nations who aspire to become players on the world stage.

In the case of Iran, economic sanctions of any kind would be unlikely in the extreme to affect governmental policy. (Kaempfer & Lowenburg, 24) There are a number of reasons that thin might be the case. The first of these reasons is that the sanctions cannot cause serious harm to Iran’s economy, which is largely predicated upon petroleum exports. (Kaempfer & Lowenburg, 28) This particular fact makes sanctions problematic because the economies of participating nations would be punished more than that of Iran.

As such, the situation makes it impossible for participating nations to inflict punishment without incurring punishment themselves. (Kaempfer & Lowenburg, 29) When nations on one hand condemn the actions of Iran, and on the other hand continue to buy petroleum from them, the signal that is sent to the decision-makers is that the participating nations are not serious about their demands, and that as soon a enforcement becomes inconvenient for the populations, the sanctions will be finessed. (Kaempfer & Lowenburg, 31)

A second reason that sanctions are doomed to fail in nations such as Iran is that the government does not have to respond to the will of the people. (Kaempfer & Lowenburg, 35) As a theocratic government, the powers that be in Iran can count on unconditional support from the people with respect to foreign policy. (Kaempfer & Lowenburg, 62) If that fails, the government does not hesitate to use force to gain the conformity of opinion necessary to weather the negative effects of any sanctions imposed.

(Kaempfer & Lowenburg, 64) In the case of North Korea, the effects of sanctions would be even less apparent outside of the nation. (Kaempfer & Lowenburg, 81) The government of North Korea is a personality cult predicated on the person of Kim Jung Ill. (Kaempfer & Lowenburg, 88) The effects of sanctions may be severe; the population may be unable to eat, but they would also be unable to protest. (Kaempfer & Lowenburg, 93)

While North Korea does not have the natural resources (ie: oil) to sustain itself during a total effort at economic sanction, its leadership has demonstrated a disregard for the wellbeing of its people that would obviate any positive effect sanctions might have on relations with that nation. (Kaempfer & Lowenburg, 98) Works Cited Askari, H. et. al. (2003) Economic Sanctions: Examining Their Philosophy and Efficacy Westport, Connecticut : Praeger Publishing. Cortwright, D. & Lopez, G. (1995) Economic Sanctions: Panacea or Peacebuilding in a Post-Cold War World? Boulder, CO: Westview Press.

Choe, J. (2006) Problems of Enforcement: Iran, North Korea, and the NPT. Harvard International Review, Vol. 28(2) Pg. 38. Kaempfer, W. (2000) Alternatives to Comprehensive Sanctions Retrieved July 20th, 2009 from The University of Colorado website: http://www. colorado. edu/Economics/CEA/papers00/wp00-17. pdf Kaempfer, W. & Lowenburg, A. (1992) International Economic Sanctions: A Public Choice Perspective. Boulder, CO: Westview Press U. N. Resolution # 1696 (2006) Retrieved July 20th, 2009 from Global Policy Forum website: http://www. globalpolicy. org/component/content/article/202/41819.

html U. N. Resolution # 1737 (2006) Retrieved July 20th, 2009 from Global Policy Forum website: http://www. globalpolicy. org/images/pdfs/resolution1737. pdf U. N. Resolution # 1747 (2007) Retrieved July 20th, 2009 from Global Policy Forum website: http://www. globalpolicy. org/images/pdfs/0324resolution. pdf U. N. Resolution # 1803 (2008) Retrieved July 20th, 2009 from Global Policy Forum website: http://www. globalpolicy. org/images/pdfs/0324resolution. pdf Sokolski, H. & Clawson, P. (2004) Checking Iran’s Nuclear Ambitions Carlisle Barracks, PA: Strategic Studies institute.