Economic sanctions are restrictions on trade with specific countries or groups of individuals. They can be very broad or narrowly targeted and can take many forms including asset freezes, travel bans, and arms embargoes.
Sanctions can be imposed by one country alone or they can be implemented in conjunction with international alliances and intergovernmental organizations such as the North Atlantic Treaty Organization, the United Nations, and the European Union. This multilateral cooperation increases their efficacy, as it is more difficult for the target to circumvent them by trading with other states that are not part of an alliance.
The purpose of economic sanctions is to reduce the capacity of a state or group of people to conduct military attacks or other aggressive acts by making it more expensive to fund them. For example, if a country is attempting to invade another territory it will need to replenish its troops, and that will require money. Sanctions aimed at restricting the sale of military equipment or limiting the transfer of technology will help to cut off this funding and deter it from taking any further actions.
Using statistical models we find that imposing broad or extensive economic sanctions does decrease trade between the sanctioned country and the exporting country. This effect is stronger for countries that have a larger proportion of the world’s population and is also greater when a country is experiencing economic difficulties or is perceived to be an aggressor. Sanctions are also more effective if they can be portrayed as a response to an underlying cause, such as the oppression of a people by a dictator.
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