Why do we want to measure the effects of sanctions?

In the overall assessment, we may think that the approach to deciding and designing measures against Russia does not necessarily need to resemble a surgical intervention, where precise knowledge of the nerves being touched and the avoidance of specific consequences is crucial. Instead, we may adopt a more robust, "sledgehammer" approach. The primary objective is to inflict maximum damage on the Russian economy, thereby limiting the resources available for sustaining its aggression.

While some may object, asserting the need to consider potential damage to our own economies, such concerns can be reasonably dismissed using an "order of magnitudes" argument. The sanctions-induced damage to Western economies is significantly smaller than the harm inflicted on Russia. Furthermore, it is smaller than the alternative costs of either allowing Russia to proceed with its aggression unchecked, or engaging in direct conflict [source].

However, it's important to acknowledge that the impact of sanctions may vary across different countries within the coalition. Some member countries, firms within the same country, or even third countries may bear disproportionately higher costs. Therefore, one compelling reason to study the effects of sanctions in detail is to establish internal justice in burden-sharing within the coalition. This understanding can be utilized to enhance participation by implementing compensation schemes. Additionally, it serves as a valuable complement to the publicly available rankings on countries' contributions and donations.

Fairness in burden-sharing introduces another crucial consideration. The behavior of firms that continue to export to Russia, whether in violation of sanctions or not, and thereby directly or indirectly contribute to Russia's military capacity, is akin to private gains at the expense of public bailout. The damage caused by Russia, facilitated by these entities, is borne by Ukraine first and foremost, and furthermore by other actors who are adhering to sanctions, as well as by taxpayers in countries that support financially Ukraine for reconstruction. Consequently, assigning monetary values to these gains and losses becomes essential for a more comprehensive understanding of the situation as well as a fairer burden-sharing.