The Effectiveness of Sanctions Revisited: An Empirical Analysis Using a Bargaining and Enforcement Framework

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Kwon, Bo Ram
- Affiliation: College of Arts and Sciences, Department of Political Science

Abstract

While extant research on economic sanctions have identified various state-level variables that affect the effectiveness of economic sanctions, this study examines sanctions success by incorporating the role of the firm. I argue that imposing sanctions creates an enforcement dilemma for sanctioning states or senders. Namely, unlike the decision to impose sanctions, senders often have disincentives to enforce their sanctions policies on their firms, given that the restriction on economic transactions with targeted states may undermine their competitiveness. Following a strategic bargaining framework that consists of a sender, its firm and a target state, I propose that sanctions are more likely to succeed when the sender's firm retains a moderate share of the target's market relative to its foreign competitors. Also, I argue that due to strategic interaction, sanctions are more likely to be imposed when the conditions do not favor their success. The detailed case illustration and large-N quantitative analysis support these predictions and suggest that sanctions enforcement is indeed critical in determining sanctions success.

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