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# What is the effect of sanctions?

Free economic relations and the pursuit of as large a market as possible are undeniably advantageous. However, a range of underlying motivations may at times compel a country to impose restrictions to these, commonly known as economic sanctions, upon another nation. These sanctions are a response to a specific action or a series of actions that have raised concerns or objections.

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Country A may employ sanctions with various objectives in mind. Firstly, it may seek to dissuade or deter Country B from initiating or continuing the objectionable action. Secondly, it might aim at inflicting costs on Country B for engaging in the undesirable behavior, either purely to penalize it, or as a means to limit Country B’s resources in the pursuit of that behavior, for example military expenditures. Lastly, Country A may intend to disassociate itself from the problematic actions of Country B, signaling that such behavior is unacceptable within the international community.

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The effectiveness of sanctions becomes apparent in the following scenarios:&#x20;

1\. If Country B refrains from initiating the objectionable action due to the credible threat of sanctions from Country A, the sanctions have a deterrent effect. In this case, sanctions need not be implemented to achieve the desired result.

2\. If Country B ceases the objectionable action after sanctions have been imposed, the sanctions have an enforcement effect. The implementation of sanctions has effectively altered the cost-benefit calculus for Country B, leading to a change in their behavior.

In both cases, there is a clear effect, and the difference is simply the point in time when the course of action is reversed, and whether sanctions are actually imposed or merely threatened. This might depend on the extent to which the associated costs can be anticipated, and whether the implementation of sanctions is deemed credible by both parties.&#x20;



The cases of such clear effects are though rare (Add reference). More often, the costs imposed on the receiving country may not be substantial enough to outweigh the perceived benefits of the objectionable action, or these costs may accumulate more slowly over time. There may be costs for the sender as well, and in some cases the receiving country may continue its course of action, speculating that the costs will accumulate faster for the sending country and discourage the implementation of sanctions.&#x20;

On the other hand,  the application of sanctions may also yield other benefits to the sender than the interruption of the objectionable action. By imposing sanctions, the sender distances itself from the objectionable action, achieving its goal of signaling disapproval within the international community. This effect of signaling remains irrespective of whether the receiving country alters its behavior or not.



All in all, sanctions do produce _some_ effect in any case for both the sender (Country A) and the receiver (Country B). Therefore, discussing the effect of sanctions is more complex than answering the close-ended question: do sanctions work? This is due to conceptual reasons, exposed above, but also to practical reasons of data availability and identification methods (i.e. the possibility of comparing realised outcomes to a valid and relevant counterfactual scenario). Nevertheless, this discussion is essential, to inform and support the correct design and continued implementation of sanction policies.&#x20;

One further complicating factor in this analysis is that the normal risks of confirmation bias (analysts leaning systematically towards pieces of evidence that are in line with their preconceived interpretation, on either side [ref](https://www.ponarseurasia.org/are-sanctions-on-russia-effective-how-not-to-inform-the-debate%EF%BF%BC/)) is compounded when narratives are self-fulfilling. In this case, accumulating evidence that sanctions have a meaningful impact will sustain popular support and a broad participation in the sanction regime, which  in turn bolsters its impact ([ref](https://cepr.org/voxeu/columns/strength-unity-economic-cost-trade-restrictions-russia)). However the opposite is also true: the perception that sanctions do not affect the target country’s decisions and might even backfire might lead to defections from the sanction regime, creating holes which in themselves undermine the effectiveness of the restrictions and favor the target country.

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