Hitting Them Where It Hurts: Financial Integration and Borrowing Costs as Determinants of Economic Sanctions Success Public Deposited

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  • March 20, 2019
  • Parets, Alexander
    • Affiliation: College of Arts and Sciences, Department of Political Science
  • This paper builds off of recent work on the interaction between political economy and economic sanctions and argues that a target government's degree of financial integration and dependence on short-term borrowing directly affects the target's ability to withstand the coercive pressure of sender states. A government's relative level of exposure to and integration with the international financial system increases the impact of economic sanctions by increasing the costs associated with policies that are not in line with those of the system's dominant powers. States with higher levels of financial integration and short-term debt are more likely to require access to international financial markets in order to continue to service their international payments as well as finance the principal and interest on outstanding debt contracts. Increases in potential or realized financial costs will increase the pressure on target governments to acquiesce to sender demands. I use a logistic regression model to test the hypotheses that the target state's degree of financial integration and amount of short-term debt affect the probability of sanctions success with data on sanctions threats and impositions on high politics cases from 1971-2000. The results provide strong statistical support for the hypotheses and provide evidence to support the argument that international financial markets place a strong constraint on the behavior of target governments.
Date of publication
Resource type
Rights statement
  • In Copyright
  • Mosley, Layna
  • Bapat, Navin
  • Crescenzi, Mark J. C.
  • Master of Arts
Degree granting institution
  • University of North Carolina at Chapel Hill Graduate School
Graduation year
  • 2010
  • This item is restricted from public view for 1 year after publication.

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